Legislature(2021 - 2022)BUTROVICH 205
04/23/2021 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| HB115 | |
| SB44 | |
| Presentation: Susitna Watana Hydroelectric Project | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 44 | TELECONFERENCED | |
| + | HB 10 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | HB 115 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 115-AQUATIC FARMING & HATCHERY SITE LEASES
3:36:55 PM
CHAIR REVAK announced the consideration of HOUSE BILL NO. 115 am
"An Act relating to aquatic farming and hatchery site leases;
and requiring the director of the division of lands to provide
the legislature with an annual report relating to aquatic
farming and hatchery site leases."
3:37:11 PM
REPRESENTATIVE ANDI STORY, Alaska State Legislature, Juneau,
Alaska, sponsor of HB 115, introduced the legislation
paraphrasing the following sponsor statement:
[Original punctuation provided.]
House Bill 115 simplifies the Department of Natural
Resources (DNR) lease renewal process for aquatic
farms to support Alaska's aquaculture sector while
reducing administrative overhead. Examples of aquatic
farm products include oysters, kelp, and other
shellfish. HB115 makes the aquatic farm lease renewal
process consistent with the renewal process for other
DNR leases such as agricultural grazing, cabins and
lodges, fish processing docks, and hydroelectric
facilities. HB 115 does not affect salmon hatchery
leases.
If enacted, HB115 would expedite the lease renewal
process lowering the risk for businesses investment
and reducing the workload of an overstretched state
agency.
Current statute requires DNR to approve both initial
and renewal aquatic farm leases using the same
process, called a "945 authorization" (referring to
the adjudication process found in AS 38.05.945), which
takes around 200 days. HB115 would allow aquatic farm
or hatchery renewals to be renewed in the same manner
as most DNR leases like those listed above. This
optional process allows the Director of the Division
of Mining, Land and Water to renew a lease for a
business in good standing and takes around 90 days.
Applied to aquatic businesses, this option
significantly shortens the renewal process while
continuing appropriate regulatory oversight and public
engagement.
HB115 also requires DNR to submit an initial report on
the backlog of pending aquatic farm and hatchery site
lease applications, estimate economic impacts of
pending leases, and provide recommendations for
streamlining the lease approval process. Subsequent
annual reports would detail the application backlog
and list the number of leases renewals that underwent
the time-intensive lease renewal process.
This bill makes clear ecotourism and educational use
of sites is allowed, and explicitly prohibits DNR from
charging additional fees for persons using, or
traversing, land leased for aquatic farms and hatchery
sites.
I respectfully ask for your support in the passage of
HB115
REPRESENTATIVE STORY advised that the House floor amendment
specified that the required reports must be delivered
electronically. She expressed appreciation for the efficient and
cost-saving measure. She highlighted that DNR brought forward
two issues after the bill passed the House, both of which are
addressed in the proposed Senate committee substitute. She said
her staff would present the proposed changes.
3:41:08 PM
GREG SMITH, Staff, Representative Andi Story, Alaska State
Legislature, Juneau, Alaska, explained that the issues DNR
brought forward have to do with the term "ecotourism" and the
prohibition of fees in subsection (h). Because ecotourism is not
defined in statute the plain meaning is used, and that includes
"tourism directed towards exotic or threatened natural
environments." The concern was that aquatic farm sites may not
be considered exotic or threatened and therefore the allowance
in subsection (h) would not stick.
The second change appears in the prohibition of fees section.
The concern was that the previous language was too broad and
would have prevented the department from charging fees for
several things they currently charge for, including amendments
or changes to leases, subleases, or transfers of leases. The CS
narrows the prohibition on fees that the department can charge
to not allowing fees for tourism enterprises or educational
purposes. The sponsor understood that was the original intent
when it was added in Senate Finance last year. He offered his
understanding that people in the industry do not object to the
proposed changes in version O.
CHAIR REVAK asked for a motion to adopt the Senate CS.
3:43:12 PM
SENATOR MICCICHE moved to adopt the work draft [Senate] CS for
HB 115, work order 32-LS0299\O.
3:43:26 PM
CHAIR REVAK found no objection and the Senate committee
substitute, version O, was adopted.
CHAIR REVAK announced invited testimony.
3:43:48 PM
HEATHER MCCARTY, Chair, Alaska Mariculture Task Force (AMTF),
Juneau, Alaska, stated strong support for the [Senate] CS for HB
115. She said AMTF believes this legislation is an important
part of the larger plan to fully develop the mariculture
industry in Alaska. AMTF also believes this industry can play an
important role in Alaska's economic recovery from COVID-19, and
HB 115 is central to realize that potential.
MS. MCCARTY related that when the task force was created in
2016, Governor Walker appointed a wide range of stakeholders as
members. In 2018 the task force completed the comprehensive
Alaska Mariculture Development Plan that specifically focused
on: education and outreach, science and research, marketing and
processing, and regulatory and statutory changes that might be
necessary to remove obstacles to the development of mariculture.
Several DNR issues were identified in the process and HB 115 is
the result of some of the findings in the strategic plan. By the
end of 2019, the task force released a five-year action plan and
that too recognized the need for both regulatory and statutory
changes to remove obstacles to the development of mariculture.
She highlighted that Governor Dunleavy continued the task force
when he was elected because he shares the vision of the
important role mariculture could play in the state.
3:47:02 PM
MS. MCCARTY informed the committee that HB 115, including the
[Senate] committee substitute, has broad stakeholder support as
an important step in developing the mariculture industry. In
summary, the bill will align the lease renewal process for
aquatic farms and hatcheries to the renewal process for most
other types of state leases. This will simplify and shorten the
current process, reduce the workload on DNR staff, and provide
added certainty for mariculture/aquaculture businesses. The
simpler reporting requirements for DNR will allow the
legislature to better track and understand the industry, and it
establishes in statute that tourism and educational activities
are allowed on aquatic farm and hatchery sites.
CHAIR REVAK thanked her and requested her testimony in writing.
MS. MCCARTY agreed to provide it.
3:48:45 PM
ERIC WYATT, President, Alaska Shellfish Growers Association
(ASGA), Tokeen Cove, Alaska, stated ASGA is primarily made up of
oyster farms from Homer to Ketchikan. He related he was a
longtime member of the Alaska Mariculture Task Force and the
director of Oceans Alaska Science Center Shellfish Hatchery in
Ketchikan. He has been aquatic farming for nearly 20 years, and
as such has been involved in lease renewals, initial leases, and
all types of lease modification.
MR. WYATT described HB 115 as a worthwhile means to responsibly
improve the aquatic farming lease program. On behalf of ASGA he
stated support for HB 115 and encouraged the committee to pass
it.
CHAIR REVAK requested he submit his testimony in writing to
sres@akleg.gov.
3:51:04 PM
PAUL FUHS, representative, Alaska Long Neck Farms, Anchorage,
Alaska, stated that for the last 15 years he has been a
commercial diver in the Geoduck mariculture industry, and he
holds a lease site near Ketchikan. He said HB 115 is a good
bill, but it would be very helpful to the Geoduck industry if it
were amended to accommodate the specific nature of the biology
of geoducks. He explained that this large clam grows to a
kilogram in size, reaches maturity approximately seven years
after it is planted, and can sell for $20-$30 apiece, primarily
in the Chinese markets. The issue is that once the lease is
issued, DNR requires the commercial entity to sell $15,000 worth
of product a year. This is not possible in the first seven years
for Geoduck farms, and in later years there are a number of
reasons a Geoduck would not be harvested. Some of these reasons
are the farm may have paralytic shellfish poisoning, there may
be a trade war with China, and COVID-19. Fortunately, the
biology of geoducks does not require annual harvesting. If a
geoduck is not harvested one year, it is left in the ground to
get larger. He noted these large clams live up to 150 years.
MR. FUHS said the DNR lease requirement is a major impediment to
investment because failure to sell $15,000 of product a year is
grounds for lease revocation. The department has said this
requirement would be selectively enforced, but that is not
sufficient assurance for some investors. He said Alaska Long
Neck Farms requests the committee amend HB 115 to say proof of
the use of the lease is the planting of the Geoduck seed, not
the arbitrary dollar amount of sales.
3:55:11 PM
MR. FUHS described a separate issue that leases can only be
renewed once, and again requested the committee amend the bill
as he previously described.
CHAIR REVAK asked Ms. Colles to respond to Mr. Fuhs' request for
an amendment to bind the lease to planting the Geoduck seed.
3:57:22 PM
CHRISTY COLLES, Chief of Operations, Division of Mining, Land,
and Water, Department of Natural Resources, Anchorage, Alaska,
acknowledged the regulations were out of date and said, "It is
something that we recognize needs to be addressed when we redo
our regulations." She noted both that current regulations allow
the department to account for factors that might cause a farmer
to fail to sell their product, and that the department has not
denied or revoked any leases based on the inability to meet the
commercial use requirement.
3:58:41 PM
SENATOR VON IMHOF asked when the department expects to review
those regulations.
MS. COLLES estimated it would be another year before the
department started to work on aquatic farm regulations.
SENATOR VON IMHOF asked if the regulations address the issue of
just one lease renewal.
MS. COLLES replied, HB 115 would allow renewal for an additional
term without repeating the initial process that involves a best
interest finding, public comment, and a decision. After that, a
second decision process would be necessary.
SENATOR VON IMHOF summarized her understanding of what the bill
would provide in terms of a lease renewal and that after 20
years Mr. Fuhs would need make a new application and potentially
pay $40,000. She asked if that was correct.
MS. COLLES answered no; Mr. Fuhs would not need to do the survey
or appraisal unless he wanted to pursue a lease with a term
longer than 10 years. The statute allows the department to issue
leases for up to 55 years, but after 10 years an appraisal is
required for that lease. She added, "He would have to reapply
after he got another renewal; we would have to adjudicate and if
he wanted to remain at a 10-year lease he would not be required
to get a survey or an appraisal."
4:01:31 PM
SENATOR VON IMHOF asked if a leaseholder could be fairly
confident they could get three 10-year lease renewals in a row,
thereby avoiding the need for an appraisal and the other
requirements.
MS. COLLES answered that is correct; the leaseholder can
continue to request the lease be renewed after 10 years and they
would not be required to pay the fees. Furthermore, as long as
the leaseholder is not in default and the lease is found to be
in the best interest of the state, the department could renew
the lease for any number of terms. There is a decision process
at the end of the first renewal of similar term to allow the
public to comment and perhaps cause the department to decide to
go in a different direction. However, she said that has not
happened in the 15 years she has been in her current position.
4:02:46 PM
SENATOR VON IMHOF asked if the department allows bidding wars.
MS. COLLES answered no. There could be a competing application,
but that has not happened for an aquatic farm.
4:03:18 PM
SENATOR KIEHL noted that Section 4 removes the ability for the
commissioner to deny an application to renew a lease for good
cause. He asked if the department retains that ability elsewhere
in the statute.
MS. COLLES answered yes; the department has the ability to
review the lease and case file to ensure it is in good standing,
and a renewal may be denied for good cause. DNR may also choose
to not renew a lease through the expedited process if there is
reason to believe a full review and decision process is
necessary. At the end of this process there is always the
ability for the farmer or public to appeal.
4:05:00 PM
CHAIR REVAK asked Mr. Fuhs to work with the sponsor. He
announced he would hold HB 115 in committee.