Legislature(2003 - 2004)

05/08/2004 09:04 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                                                                                                                                
     HOUSE BILL NO. 341                                                                                                         
     "An Act relating to the dive fishery management assessment."                                                               
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken explained  that  this bill  would  affect the  Dive                                                            
Fishery  management   assessment   in  that  it  would  finalize   a                                                            
compromise   between  Alaska   shellfish   growers  and   commercial                                                            
fishermen    and   would    additionally    address   long-standing                                                             
controversies regarding  the State's management of geoduck clams and                                                            
other shellfish  stocks on  aquatic farm sites.  He noted that  were                                                            
the Finance  committee substitute,  Version 23-LS1280\I,  adopted by                                                            
the Committee,  a title change  would be  required. In addition,  he                                                            
noted that a Department  of Revenue zero fiscal note accompanies the                                                            
bill.                                                                                                                           
                                                                                                                                
Co-Chair Green  moved to adopt the Version "I" committee  substitute                                                            
as the working document.                                                                                                        
                                                                                                                                
There being no  objection, the Version "I" committee  substitute was                                                            
ADOPTED as the working document.                                                                                                
                                                                                                                                
TIM  BARRY,  Staff  to  Representative  Bill  Williams,  the  bill's                                                            
sponsor, explained  that this bill was introduced  at the request of                                                            
the Southeast  Alaska Regional Dive Fisheries Association  (SARDFA).                                                            
He noted that  the original bill incorporated "fairly  mild changes"                                                            
to existing statutes  governing the manner in which  SARDFA assesses                                                            
its dive fishermen,  Southeast Alaska communities,  and dive fishery                                                            
processor  members.  He explained  that  the Association,  which  is                                                            
funded by either  a one, three, five, or seven percent  tax assessed                                                            
on its members,  works with the Department of Fish  and Game and the                                                            
Department of  Environmental Conservation to manage  and develop the                                                            
dive fishery  in Southeast  Alaska. This  bill, he recounted,  would                                                            
allow  the Association's  tax mechanism  to be  expanded to  include                                                            
two, four, or six percent assessments.                                                                                          
                                                                                                                                
Mr. Barry stated  that the bill was  recently amended to  address an                                                            
April  2004  State  Supreme  Court   ruling  that  resulted  in  the                                                            
Department  of Fish  and  Game issuing  cease-harvesting  orders  to                                                            
several   geoduck  farmers.   Consequently,   he  stated  that   the                                                            
Association,   shellfish  farmers,   the  Department  of   Law,  the                                                            
Department of  Fish and Game, the Governor's Office  and others have                                                            
reached  an agreement  on statutory  language that  would allow  the                                                            
shellfish  farmers to  continue to  farm shellfish.  He pointed  out                                                            
that  this  language  is  included  in  the  Version  "I"  committee                                                            
substitute  before the Committee.  He affirmed that this  agreement,                                                            
which  has  the  support  of  the  aforementioned   entities,  would                                                            
institute a title change.                                                                                                       
                                                                                                                                
Senator Dyson recalled  that as this dive fishery industry was being                                                            
developed,  it asked  the Legislature  to adopt  regulations,  which                                                            
would allow the industry  to levy sufficient tax assessments through                                                            
which  to administer  and supervise  operations.  He stated that  he                                                            
"was charmed"  by the fact that the industry was willing  to pay for                                                            
this  endeavor. In  that vein,  he  asked whether  this legislation                                                             
would negatively affect "the bottom line for the State."                                                                        
                                                                                                                                
Mr. Barry replied  that this legislation would not  affect the State                                                            
"in any way."  Continuing, he stated that enabling  SARDFA to assess                                                            
a two,  four, or  six-percent tax  would allow  the Association  "to                                                            
more effectively pay their own way."                                                                                            
                                                                                                                                
Senator Bunde stated that  the bill has changed since he heard it in                                                            
the Senate  Labor  & Commerce Committee.  Continuing,  he asked  for                                                            
further  information regarding  the standing  stock language  in the                                                            
bill;  specifically  how designating  aquatic  farm  sites in  areas                                                            
where  no shellfish  naturally  exist  would benefit  the  shellfish                                                            
farming industry,  as he contested  that were the site suitable  for                                                            
the species,  the shellfish would  be naturally occurring  there. He                                                            
also asked for  further information regarding the  grandfathering in                                                            
of current  farms and the  "common property"  stock that existed  on                                                            
the site before the farm began.                                                                                                 
                                                                                                                                
Mr.  Barry voiced  the understanding  that  the standing  stock  and                                                            
shellfish farmer  issue has been a topic of discussion  in excess of                                                            
five years.  He stated that the agreement  reflected in the  Version                                                            
"I"  committee  substitute   "would  define  what  significant   and                                                            
insignificant  standing stock are."  Furthermore, he stated  that in                                                            
those cases  in which a farmer  has a site  designated as having  an                                                            
insignificant  amount of standing  stocks, the farmer could  harvest                                                            
the insignificant  standing  stock and  sell it  to a processor.  He                                                            
noted that the any proceeds  generated by standing stock, beyond the                                                            
insignificant stock, would be remitted to the State.                                                                            
                                                                                                                                
JULIE  DECKER, Executive  Director,  Southeast  Alaska Dive  Fishery                                                            
Association,  testified via teleconference  from an offnet  site and                                                            
informed  the Committee  that  geoducks are  able to  grow in  areas                                                            
where they are  not currently present or do not naturally  grow such                                                            
as shallow inter-tidal  areas. However, she noted that it is unknown                                                            
as to whether  they would grow as well in these areas  as they would                                                            
in a natural habitat area.  Therefore, she attested that, to attract                                                            
and encourage  the growth of the "somewhat risky"  shellfish farming                                                            
industry,  it would  behoove  the State  to make  available  natural                                                            
habitat  sites,  as they  would  provide  natural feed  and  quicker                                                            
growth. She stated that  the primary on-going issue in this industry                                                            
involves  standing stock.  She shared that  the Alaska Court  System                                                            
has ruled  that areas  with insignificant  geoduck  clams should  be                                                            
available  as aquatic farm  sites, but that  areas with significant                                                             
amounts  of standing  stock  should be  regarded  as common  fishery                                                            
sites. This issue,  she disclosed has been heard by  the Lower Court                                                            
and appealed  to both  the Superior  and Supreme  Court. She  stated                                                            
that the  Supreme Court has  determined that  State statutes  do not                                                            
currently  allow the Department  of Fish and  Game to designate  any                                                            
amount  of  standing  stock,  significant  or  insignificant,  to  a                                                            
farmer. This  legislation, she contended,  supports the Lower  Court                                                            
ruling that would  change State Statute to allow farmers  to harvest                                                            
an area with  insignificant amounts  of wild stock. She stated  that                                                            
an agreement  has been reached specifying  that a harvest  of 12,000                                                            
pounds or less  would be regarded  as insignificant wild  stock. She                                                            
noted that  the net proceeds  of a harvest  exceeding that  poundage                                                            
would be remitted  to the State. She reiterated that  this issue has                                                            
been addressed  for a long time and that the ability  of the various                                                            
entities to reach this agreement was "quite an accomplishment."                                                                 
                                                                                                                                
Senator   Bunde  stated   that  this  legislation   involves   "some                                                            
interesting  common property issues."  He asked whether Legislative                                                             
Legal  Services  has developed  a  position  regarding  this  common                                                            
property stock issue.                                                                                                           
                                                                                                                                
Co-Chair  Wilken  understood  that  a  Constitutional   concern  has                                                            
recently arisen regarding this legislation.                                                                                     
                                                                                                                                
Mr. Barry  explained  that George  Utermohle,  Legislative  Counsel,                                                            
Legislative  Legal  Services,  has  written a  memorandum  [copy  on                                                            
file],  dated May  4, 2004 to  Representative  Williams,  indicating                                                            
that the agreement presented  in this legislation would change State                                                            
statutes.  Furthermore,  he stated  that  while the  recent  Supreme                                                            
Court ruling specified  that aquatic farmers should  not continue to                                                            
harvest common  stock, the Court did not address any  Constitutional                                                            
issues.  However,  he allowed  that  Constitutional  questions  have                                                            
arisen during  the years of dispute  involving this issue,  and that                                                            
the entities involved in  the development of this agreement "are all                                                            
aware" that there may be some unresolved Constitutional issues."                                                                
                                                                                                                                
Co-Chair  Wilken asked  that the  memorandum be  distributed to  the                                                            
Members for review.                                                                                                             
                                                                                                                                
Mr. Barry concurred.                                                                                                            
                                                                                                                                
Senator Olson  asked whether  there has been  any opposition  to the                                                            
bill.                                                                                                                           
                                                                                                                                
Mr. Barry replied in the negative.                                                                                              
                                                                                                                                
Co-Chair Wilken  stated that the bill would be HELD  in Committee in                                                            
order  to further  clarify,  with Legislative  Legal  Services,  the                                                            
Constitutional issues being raised.                                                                                             
                                                                                                                                
AT EASE 9:37 AM / 9:38 AM                                                                                                       
                                                                                                                                

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