Legislature(1993 - 1994)
03/07/1994 08:15 AM House RES
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 448 - Waste & Use Of Salmon; Hatcheries CHAIRMAN WILLIAMS advised there is a draft committee substitute in committee members folders which adds two words that were unintentionally omitted from the Fisheries Committee CS when it was amended in that committee. GERON BRUCE, LEGISLATIVE LIAISON, ALASKA DEPARTMENT OF FISH AND GAME (ADF&G), said on page 3, line 12, the words "from wild stock" were left out of the Fisheries Committee version. This language is to carry forward the original intent of this section of the statute, which was to ensure that when hatcheries are being established and eggs are being taken from wild stock, there is some balance between the sustained yield needs of the wild stock, the hatchery egg takes, and the opportunities of the common property users to continue to harvest those resources. Once the eggs are in the hatcheries, the hatchery has established its own brood stock and is operating off of its own brood stock, it is a different situation. This language was to clarify the original intent. MR. BRUCE stated HB 448 provides for an exemption to the statutory requirement that the carcass of a salmon be utilized when it is harvested. He explained the hatchery program begins with the most important decision made in hatchery development, which is the siting of the hatchery. When a hatchery is given a permit by ADF&G, two things are looked at when siting the facility. First, the hatchery is sited in a location where it will contribute significantly to the common property fisheries. These are fisheries which are mixed in nature and are composed of a number of wild stocks. Once the hatchery is on-line, the hatchery stocks will also be present in that fishery. The second consideration is that the hatchery has a terminal harvest area relatively free of wild stock so the hatchery operator or fishermen operating in the area can go in and harvest the hatchery's run completely without jeopardizing the sustained yield of any wild stock. Number 240 MR. BRUCE said in managing the harvests of hatchery stocks as they pass through the mixed wild stock/common property fisheries, the hatchery harvests have to be restricted to the level at which the wild stocks will support. A certain percentage of the hatchery run has to get back to the hatchery to provide brood stock for subsequent returns and also to provide cost recovery to the hatchery operator. He stressed in the private nonprofit hatchery programs, the major premise of the program is that a significant portion of the costs of the program will be covered by the harvest of returning fish produced by the hatchery. MR. BRUCE pointed out that in most situations, approximately 60 percent of the hatchery returns statewide are harvested in common property fisheries by commercial, sport, and personal use fishermen. In many cases, a high percentage of the fish returning to the terminal harvest area are suitable for utilization in some manner. However, at a certain point in the run, the salmon deteriorate to the point they are not suitable for value-added products. He said it is important to consider the biology of salmon. MR. BRUCE stated as salmon return to fresh water and get ready to spawn, they stop feeding and begin consuming their stored body fats and proteins for their own survival and for conversion into roe. The animal is headed for death, it is consuming its own energy sources for other purposes and consequently reduces the value of the flesh. He stressed at some point the fish becomes unsuitable. It is not unwholesome. A person could eat it, but very few people do because it is very mushy, has no color, etc. MR. BRUCE explained in order to more fully utilize the returns coming back to the hatcheries, both for the seafood industry and the hatchery operators, and in trying to recover all of the revenue which can be received from the returns, HB 448 will provide an exemption for the tail end of the run when the fish are not suitable for any other purpose, but still contain a valuable product. He noted that salmon roe is an extremely valuable product. In 1993, the value of frozen red salmon exported from Alaska was $627.5 million and the value of salmon roe was $177 million. He added that roe has steadily been increasing in value over the last five years. REPRESENTATIVE MULDER asked if that was value of the salmon roe exported or just the value of salmon roe to the hatcheries. MR. BRUCE replied the figure is for the salmon roe exported as a finished product. Number 311 MR. BRUCE continued that the exemption in HB 448 is permissive and has to be applied for, it is not automatically granted. In order to receive the permit, three criteria will need to be met: 1) the fish will have to be demonstrated to be from a hatchery program; 2) the fish will have to have returned to a terminal area; and 3) they will have to be determined by the commissioner of ADF&G to be unsuitable for human consumption. Once the three criteria are satisfied, the commissioner can issue a permit allowing the taking of salmon in a specific area for the harvest of roe and the carcasses will be discarded in accordance with the Department of Environmental Conservation's (DEC) requirements. MR. BRUCE said many people ask the question, how does this fit with other state policies regarding the harvest of roe and the discard of carcasses. He stated most people are aware of the controversy on pollack roe stripping which occurred in the North Pacific by factory trawlers. He said there are several differences which are a basis for distinguishing between the two issues. Salmon returning to hatcheries are not part of the biological basis for sustained yield. They are not needed for spawning, they are supplemental production, and they are intended by the producers and the state to be totally utilized for either common property harvest, brood stock, or cost recovery. MR. BRUCE explained salmon are within a week or two of dying. If HB 448 is not in place to allow salmon to be harvested for their roe, they will die with the roe still in them, they will not spawn successfully, they will not contribute at all to a sustained yield and a very valuable byproduct will go unutilized. He said another difference is that pollack are not going to die upon spawning, pollack are not nearing death, and pollack flesh does not deteriorate to the point that the quality is such that people would not want to eat it. In the case of pollack, it is an economic decision. The market value of the flesh is low enough that factory trawlers chose not to process it because the cost of producing the product exceeded the price they could get in the market for it. That is not the case with salmon. He stressed the salmon being discussed have zero value in the marketplace and are not desirable. MR. BRUCE stated the public and private players in the private nonprofit salmon program have significant investments in salmon. In many cases, the hatcheries are operating under loans from the state, the fishermen are paying a salmon enhancement tax in many areas of the state to support the hatcheries, there are significant private and public investments which have been made to produce these fish and its wise management to try to recover all possible revenue from returning fish, especially if there is no reason not to. MR. BRUCE gave an example of a situation which could have been bettered if HB 448 had been in place. Runs come in, a significant percentage is harvested in the common property fishery and the remainder in the terminal area are cleaned up without getting below the threshold. He noted there are circumstances in which either the runs behave unusually or in the case of a very large run, the process or capacity gets plugged and the process is not able to get to the fish, so the fish sit in the water in the terminal area and deteriorate. He stressed in that case, a matter of a few days makes a significant difference. Number 385 MR. BRUCE described the situation which occurred in Prince William Sound in 1991. The Prince William Sound Aquaculture Association had to get a permit from ADF&G to dump three million pounds of pink salmon out in the open Sound because those fish came into the terminal harvest area, deteriorated in quality, there was no market for them, the processors were unable to get to them, and therefore the fish were dumped. He stressed no value was recovered from the fish whatsoever, and pointed out that if HB 448 had been in place, the Aquaculture Association would have been able to recover the value of the roe which would have paid the costs for dumping them with money probably left over. As it was, the state paid the costs of dumping the fish. The circumstances which led to the dumping of the fish were that in 1991, for some reason the pink salmon held off very late in entering the Sound and when they did enter, it was a very large run, there were low wild stocks, there was limited opportunity to fish in the mixed common property areas, and a very large number of fish returned to the terminal area and swamped everything. Number 415 REPRESENTATIVE CARNEY asked why was it more of a crime to take the roe before the fish were dumped than it was just to dump the fish. MR. BRUCE replied it would have been the most desirable circumstance to have harvested the fish and utilized the carcass and the roe. In this instance, that was not possible because of the circumstances surrounding that year's return. It would have been less of a crime in the sense, that at least some value could have been extracted from the fish. REPRESENTATIVE CARNEY said Mr. Bruce was still not answering his question. He asked if it was legal to dump fish. MR. BRUCE replied a permit is required. He said the fish were taken out to the Sound to dump because in a shallow bay, if all of those fish would have been allowed to die, they would have caused significant environmental problems. REPRESENTATIVE CARNEY asked why were the roe not taken before the fish were dumped. MR. BRUCE replied it would have been illegal. There is no provision in statute to allow for the removal of the roe if the carcass was not utilized. In current law, the carcass has to be utilized in some way. REPRESENTATIVE CARNEY said a permit was issued from the commissioner to dump the fish and asked if the commissioner could have also given permission to take the roe. MR. BRUCE said not without the law being proposed. Number 471 REPRESENTATIVE MULDER stated it would seem like the commissioner would have the authority under emergency regulation to be able to issue that kind of permit. MR. BRUCE replied the commissioner might have been able to stretch his discretionary authority in the law, but it would have been an unusual call and one which would have not been subject to policy approval through the legislative body. REPRESENTATIVE MULDER asked if ADF&G has explored options to try and limit bycatch or incidental catch. MR. BRUCE responded yes in specific fisheries, the department has made efforts to do that. He noted the fisheries having the most excessive discard are not managed by the department. Therefore, the role of the department is to try and influence the federal managers to take action. REPRESENTATIVE HUDSON asked what is the value to be derived from extracting roe from salmon. MR. BRUCE stated he did not know because there is nothing to base the figure on, except what egg sales have taken place in hatcheries as a result of and ancillary to the utilization of a portion of the brood stock they do not need. In 1993, the sales were less than $500,000 statewide. He said the roe market is very large and healthy and he guessed the figure would probably be in the tens of millions of dollars. He added that a hatchery might have a one million dollar budget and if it can recover an extra $200,000, it is a very significant percentage of its total costs. Number 547 REPRESENTATIVE FINKELSTEIN felt HB 448 is a good bill. He said there has been use of carcasses and mentioned a nonprofit agency which has received funding to distribute excess carcasses to get them into the hands of poor people. He asked if there is any way to require hatcheries, without cost to them, to make the carcasses available. MR. BRUCE stated there is a market incentive to do that already, because there is a cost associated with disposing of the carcasses. Hatcheries have to conform with DEC requirements which require carcasses to be either ground and disposed of or transported out to deep water. He pointed out that if someone is willing to come to the hatchery door and take the carcasses, the hatchery avoids a cost. REPRESENTATIVE FINKELSTEIN commented there is also some disincentive because the hatcheries might not want to put inferior salmon out into the market for fear of hurting their reputation. REPRESENTATIVE DAVIES asked what the original purpose in the law was in preventing the taking of eggs. He wondered if it was to eliminate the situation where people destroy fish just for the roe. MR. BRUCE said he cannot answer the question. He stated the roe market is a recent development and he did not know what date the statute originates. He said he would research the answer and get back to the committee. REPRESENTATIVE BUNDE said hatcheries in Unalakeet just break even on processing the flesh and make their money on the eggs. He noted there are unsubstantiated rumors that people along the Yukon catch fish, throw the fish away, keep the eggs and make $125 a pound. He asked if there is any danger that the rumored egg take could be legitimized through HB 448. MR. BRUCE replied there is an existing roe fishery on the Yukon River which is in a specific drainage. Under current law, people are required to utilize the carcass in some way and it is usually dried. He said ADF&G's best information is that compliance with the law is good there and no significant abuse is occurring. He explained there is an authorized roe fishery and it is operated under a guideline harvest by the department. There are so many pounds of roe which are allowed to be harvested under that fishery and it is managed on a sustained yield basis. He stressed that is a different situation than what HB 448 will authorize because HB 448 involves hatchery fish and the utilization of the carcass is not required. MR. BRUCE said there have also been reports of salmon being harvested by subsistence users and the roe being sold. He stated there have been arrests and convictions. TAPE 94-27, SIDE A Number 000 RAY GILLESPIE, REPRESENTATIVE, ASSOCIATION OF AQUACULTURE ASSOCIATIONS, expressed all four organizations he represents support HB 448 and the proposed amendment. DON AMEND, REPRESENTATIVE, SOUTHERN SOUTHEAST REGIONAL AQUACULTURE ASSOCIATION (SSRAA), testified via teleconference and stated SSRAA supports HB 448. He noted there have been instances where fish have had to be dumped without being able to recover some of the value in the form of eggs. Number 039 TOM MEARS, EXECUTIVE DIRECTOR, COOK INLET AQUACULTURE ASSOCIATION (CIAA), testified via teleconference and stated CIAA supports HB 448. Extracting some value from otherwise low grade fish is a good idea. In answer to a question asked earlier regarding CIAA's current position of refusing to provide fish for the free salmon giveaways, CIAA chooses not to participate based on the advice of legal counsel. He stated CIAA has letters in their files from state and federal regulatory agencies telling them that brood stock taken in remote hatcheries are unfit for human consumption. He explained CIAA's lawyers worry about the legal liability of giving away something which is unfit for human consumption even though there is a law in place which might protect or exempt them when giving fish to a food bank. REPRESENTATIVE FINKELSTEIN asked if there is a law in place which addresses a hatchery's liability in giving away fish. MR. MEARS responded there is a current law which allows for a general exemption from liability for people who give food to a food bank. However, he is not sure how the Association would defend themselves when they knowingly gave away fish which were deemed to be unfit for human consumption. REPRESENTATIVE FINKELSTEIN said he would do some research to determine if there is any way to resolve that issue. If the legislature is going to allow the taking of the valuable part of the fish, he felt the carcasses should also be made available to serve a public interest. MR. MEARS said CIAA would be happy to make fish available if they could be assured there will be no legal repercussions to them. REPRESENTATIVE DAVIES said earlier testimony indicated there is a difference in the quality of fish as the run progresses. He asked Mr. Mears to comment on that statement. MR. MEARS replied that at most facilities, fish early in the run are in excellent condition and can be marketed on the value of their flesh quality. As time passes, particularly in the last ten percent of fish coming in, the flesh has little or no value, but eggs may provide an opportunity to still get value. REPRESENTATIVE DAVIES clarified the only concern of CIAA for giving fish away is the legal circumstance that somehow fish are defined as unfit, whereas it may be that some of the fish are fit for human consumption. MR. MEARS stated fish harvested in the round and taken off to a processor are always deemed fit for human consumption. He said the specific incidence he is referring to is fish which are in a normal course of events at a hatchery, collected for brood stock, and eggs are collected for the spawning process. Those fish, because they are cut open in conditions not approved by DEC nor can be approved, are by definition adulterated and by definition are unfit for human consumption. Number 116 PETE ESQUIRO, REPRESENTATIVE, NORTHERN SOUTHEAST REGIONAL AQUACULTURE ASSOCIATION (NSRAA), testified via teleconference and expressed support of HB 448. He stated NSRAA still sees its mission as trying to harvest the highest quality fish possible and the committee should note that fish being discussed in HB 448 are fish NSRAA cannot make fit into the high quality category. He felt as HB 448 is approved and implemented, it is important for the commissioner to meet with representatives of the industry who can help in defining unsuitable for human consumption. He thought that definition is a critical element. REPRESENTATIVE HUDSON asked Mr. Esquiro what the approximate value of what is being wasted in his region by not being able to harvest the eggs. MR. ESQUIRO replied last year, NSRAA marketed $160,000 worth of surplus eggs. He said the eggs resulted primarily from overestimates made in the available brood stock. REPRESENTATIVE BUNDE asked if there is an assumption being made that there is an unlimited market for eggs, because eggs taken at the hatchery level compete with eggs available from privately caught fish. MR. ESQUIRO stated over the next few years, a better estimate of the egg market will be determined. He said many of the eggs NSRAA sold this past year were used to produce trout bait. REPRESENTATIVE BUNDE noted there are different qualities of eggs taken at different times and stated his concern is the possibility of over supplying the market and destroying the already low price of salmon. REPRESENTATIVE HUDSON felt the market has not been saturated and the market capacity is there. DONALD TAYLOR, VALDEZ, testified via teleconference and stated he is working with hatcheries in his area to develop byproducts utilizing carcasses. He stressed timing and correct handling in the taking of eggs is very critical. He expressed support of HB 448. LAWRENCE MCCUBBINS, HOMER, testified via teleconference and expressed support for HB 448. He referred to lines 16 and 17 on page 4, "rearing and sale of ornamental finfish for aquariums or ornamental ponds provided that the fish are not reared in or released..." and asked if fish are not to be reared in state waters, what kind of waters will the fish be reared in. REPRESENTATIVE FINKELSTEIN said that is a section of existing law and is not affected by HB 448. MR. MCCUBBINS asked if fish can be reared or cannot be reared. REPRESENTATIVE FINKELSTEIN responded it is not a part of HB 448 and the reason it is stated because the part which is amended is in the same section. He said ornamental fish can be reared in ponds or aquariums. MR. MCCUBBINS stated it reads "not reared in". He commented on the issue of permit and asked if that permit is issued by the area biologist or does it go to the commissioner. If it goes to the commissioner, he wondered what the timetable is. MR. BRUCE responded the power can be delegated by the commissioner. ADF&G anticipates that if HB 448 passes, a group representing hatchery operators, processors, fishermen, etc., will be formed for the purpose of developing procedures for the implementation of HB 448. He stressed ADF&G does recognize there is a time factor and there will be a need for a balance between controlling the situation and being able to react quickly to circumstances as they develop. MR. MCCUBBINS noted the word "identify" was mentioned and asked how fish will be identified. MR. BRUCE replied fish in a terminal harvest area will be identified by their location and the trigger at which point the fish are deemed unsuitable. He said the Alaska Seafood Marketing Institute has developed a color chart showing the stages which salmon go through as they go from ocean to a fully water marked fish and at some location in that chain, a certain point can be selected to be the trigger. MR. MCCUBBINS said his specific question is will the deviation between wild stock and hatchery stock be identified. MR. BRUCE stated HB 448 only applies to hatchery stock and those fish are identified by the fact they have returned to a terminal hatchery area. HB 448 will not necessarily require all hatchery fish be marked although it is the department's preference that there is some method of identifying hatchery fish. Number 320 REPRESENTATIVE MULDER made a MOTION to ADOPT CSHB 448(RES). CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. REPRESENTATIVE MULDER made a MOTION to MOVE CSHB 448(RES) with zero fiscal notes out of committee with INDIVIDUAL RECOMMENDATIONS. CHAIRMAN WILLIAMS asked if there were any objections. Hearing none, the MOTION PASSED. Number 334
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