Legislature(2003 - 2004)

02/10/2003 05:04 PM EDT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
        HOUSE SPECIAL COMMITTEE ON ECONOMIC DEVELOPMENT,                                                                      
                INTERNATIONAL TRADE AND TOURISM                                                                               
                       February 10, 2003                                                                                        
                           5:04 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Cheryll Heinze, Chair                                                                                            
Representative Lesil McGuire, Vice Chair                                                                                        
Representative Pete Kott                                                                                                        
Representative Carl Morgan                                                                                                      
Representative Vic Kohring                                                                                                      
Representative Sharon Cissna (via teleconference)                                                                               
Representative Harry Crawford                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
ORGANIZATIONAL MEETING                                                                                                          
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
TESTIMONY ON PROPOSED COMMITTEE BILL [what became HB 95]                                                                        
                                                                                                                                
     - HEARD BUT NOT SCHEDULED                                                                                                  
                                                                                                                                
PREVIOUS ACTION                                                                                                               
                                                                                                                                
No previous action to record                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
PAUL FUHS, Lobbyist                                                                                                             
for Alaska Trademark Shellfish                                                                                                  
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:  Testified on a proposed committee bill                                                                     
[later introduced as HB 95] and answered questions.                                                                             
                                                                                                                                
RONDA THOMPSON, Staff                                                                                                           
to Representative Cheryll Heinze                                                                                                
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Spoke  briefly  during  second portion  of                                                               
organizational meeting.                                                                                                         
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
TAPE 03-1, SIDE A                                                                                                             
Number 0001                                                                                                                     
                                                                                                                                
CHAIR  CHERYLL  HEINZE  called the  House  Special  Committee  on                                                             
Economic Development, International Trade  and Tourism meeting to                                                               
order  at 5:04  p.m.   Representatives Heinze,  McGuire, Kohring,                                                               
Morgan,  and  Crawford  were  present   at  the  call  to  order.                                                               
Representatives Kott  and Cissna (via teleconference)  joined the                                                               
meeting as it was in progress.                                                                                                  
                                                                                                                                
ORGANIZATIONAL MEETING                                                                                                        
                                                                                                                                
Number 0074                                                                                                                     
                                                                                                                                
CHAIR HEINZE  inquired whether  members had  passports, requested                                                               
that a photograph  be provided to the committee aide  in order to                                                               
obtain  visas,  and asked  members  to  fill out  an  information                                                               
sheet.  Drawing  attention to a booklet provided  to members, she                                                               
asked members  to look  at five  pages relating  to international                                                               
trade.                                                                                                                          
                                                                                                                                
Number 0239                                                                                                                     
                                                                                                                                
CHAIR HEINZE  pointed out  the "Mission"  portion of  the printed                                                               
agenda  for the  meeting,  which listed  the  following:   Assist                                                               
Alaska  companies  to sell  their  goods  and services  overseas;                                                               
provide information;  advance government-to-government relations;                                                               
recruit business  and investment into Alaska;  and promote Alaska                                                               
as a location for film projects.   She asked that members provide                                                               
any further ideas by the next meeting.                                                                                          
                                                                                                                                
Number 0335                                                                                                                     
                                                                                                                                
CHAIR  HEINZE   asked  whether  members   had  heard   the  press                                                               
conference  that  morning  about BP's  $4-billion  investment  in                                                               
Russia;  she suggested  the need  to find  out details.   Calling                                                               
attention to a memorandum of  cooperation and describing the Duma                                                               
as the  legislative arm in  Russia, she  indicated Representative                                                               
Pete Kott, Speaker of the House,  has invited members of the Duma                                                               
to  visit, at  which time  a  memorandum of  cooperation will  be                                                               
signed.  Alluding to a handout  titled "With $25 Billion at stake                                                               
Ignorance is  not bliss," she  remarked, "When we find  out where                                                               
BP is going  with their $4 billion,  then we need to  set up some                                                               
protocols there with wherever they're going."                                                                                   
                                                                                                                                
TESTIMONY ON PROPOSED COMMITTEE BILL [what became HB 95]                                                                      
                                                                                                                                
Number 0463                                                                                                                     
                                                                                                                                
CHAIR HEINZE turned attention to  a proposed committee bill.  [In                                                               
packets  was a  work draft  for an  unnumbered bill,  labeled 23-                                                               
LS0407\D,  Utermohle, 2/7/03,  "An  Act relating  to permits  for                                                               
aquatic farming  of geoducks."]   She asked  Paul Fuhs,  whom she                                                               
characterized as a big force behind the bill, to talk about it.                                                                 
                                                                                                                                
Number 0510                                                                                                                     
                                                                                                                                
PAUL FUHS,  Lobbyist for Alaska Trademark  Shellfish, highlighted                                                               
the   tremendous  potential   for  geoducks   if  grown   through                                                               
mariculture,  noting  that  now   there  is  a  small  commercial                                                               
fishery.    He  told  members  that  last  year  legislation  was                                                               
introduced  by   Representative  McGuire,  then  chair   of  this                                                               
committee;  this year's  potential bill  begins where  that prior                                                               
legislation left off.                                                                                                           
                                                                                                                                
MR. FUHS provided  some history.  He said people  wanting to farm                                                               
[geoducks]  had gone  through the  coastal zone  management (CZM)                                                               
process  and  the  DNR [Department  of  Natural  Resources]  best                                                               
interest finding, and  had "followed all the rules"  put in front                                                               
of  them by  [the Alaska  Department of]  Fish and  Game (ADF&G).                                                               
However,  the department  put provisions  on the  geoduck permits                                                               
that  made  it impossible  to  operate  - including  a  five-year                                                               
lease, although the  time to maturity is five to  seven years.  A                                                               
lawsuit  was filed,  and the  court said  it was  illegal to  put                                                               
those provisions on [the permits].   When the applicants returned                                                               
to the  department following that [decision],  however, they were                                                               
told   that  technically   they'd  been   turned  down   [by  the                                                               
department] and therefore had to  start from scratch again.  That                                                               
is the reason for the legislation, he said.                                                                                     
                                                                                                                                
Number 0630                                                                                                                     
                                                                                                                                
MR. FUHS noted that Representative  McGuire [who also had chaired                                                               
the Joint  Committee on  Administrative Regulation  Review during                                                               
the  previous legislature]  had reviewed  this situation  and had                                                               
written some letters.  He  offered his opinion that the situation                                                               
arose in part  because of departmental bias, but  said there also                                                               
were  real issues  with regard  to sustained-yield  management of                                                               
the   resource  and   the  "common   property"   clause  of   the                                                               
constitution.  He pointed out that  there was an amendment to the                                                               
common property  clause [in order to  accommodate] limited entry.                                                               
He alluded  to the  fact that  Article VIII,  Section 15,  of the                                                               
state constitution reads as follows:                                                                                            
                                                                                                                                
     SECTION  15.    No   Exclusive  Right  of  Fishery.  No                                                                    
     exclusive right  or special privilege of  fishery shall                                                                    
     be created or  authorized in the natural  waters of the                                                                    
     State.   This section  does not  restrict the  power of                                                                    
     the State to limit entry  into any fishery for purposes                                                                    
     of resource conservation,  to prevent economic distress                                                                    
     among  fishermen and  those dependent  upon them  for a                                                                    
     livelihood and to promote  the efficient development of                                                                    
     aquaculture in the State.                                                                                                  
                                                                                                                                
MR.  FUHS  observed that  although  legislation  has been  passed                                                               
about the meaning  and management of limited entry,  it has never                                                               
given meaning to the phase  "promote the efficient development of                                                               
aquaculture in the State."                                                                                                      
                                                                                                                                
Number 0704                                                                                                                     
                                                                                                                                
MR.  FUHS  indicated the  proposed  legislation  says that  after                                                               
someone  has been  through coastal  zone management  and the  DNR                                                               
best interest findings  - if no other conflicts are  found and if                                                               
there is no commercial fishery on  the site - the department must                                                               
issue  the permit  within 90  days.   To  preclude harvesting  of                                                               
large amounts  of animals  where abundant,  a person  cannot take                                                               
more than  20 percent a  year, and  then must replant  and reseed                                                               
100  percent  of  what  was  taken.   After  the  department  has                                                               
certified the replanting,  the person may move on to  the next 20                                                               
percent.  At the end of  five years there would be mature animals                                                               
coming on line and the ability to "really operate it as a farm."                                                                
                                                                                                                                
MR. FUHS reported, however, that  the department had objected [to                                                               
the  previous legislation],  saying that  harvesting where  there                                                               
are lots  of animals violates  the common property  [clause], and                                                               
that  people  can  only  plant and  harvest  where  there  aren't                                                               
[geoducks] already.  Mr. Fuhs  remarked, "Well, obviously, that's                                                               
poor habitat for them; they're going  to be where they can grow."                                                               
He said that  is a conflict that this legislation  is intended to                                                               
address.   Reiterating  that  there is  "millions  of dollars  of                                                               
potential for  this industry  if we  can just  get it  going," he                                                               
requested the  committee's support in  putting this forward  as a                                                               
bill.     He  asked  that  Representative   McGuire  provide  any                                                               
necessary clarification or correction.                                                                                          
                                                                                                                                
Number 0809                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE offered her  belief that the testimony and                                                               
letter [a  document in packets, "Status  of Shellfish Mariculture                                                               
Development,"  prepared  by  Mr.  Fuhs  on  behalf  of  shellfish                                                               
growers involved the lawsuit against  the ADF&G] are fairly self-                                                               
explanatory.  She  suggested that committee members  focus on the                                                               
fact that the  purview of the committee  is economic development,                                                               
looking  at ways  to  help Alaskans  to  develop livelihoods  for                                                               
themselves,  particularly  in  Southeast Alaska  because  of  the                                                               
declining  timber industry,  so  that people  can  live in  their                                                               
communities and earn enough to support their families.                                                                          
                                                                                                                                
REPRESENTATIVE McGUIRE  alluded to [Article VIII,  Section 15, of                                                               
the state  constitution], emphasizing that it  speaks with regard                                                               
to promoting  the efficient development of  aquaculture, and that                                                               
voters  had weighed  in  on that  constitutional  amendment.   In                                                               
1984,  she noted,  the legislature  also passed  an aquatic  farm                                                               
Act, "further outlining its policy to  go forth with some kind of                                                               
mariculture industry."   Pointing out that there  is a moratorium                                                               
on finfish  farming, she  cautioned that it  is a  separate issue                                                               
that shouldn't  be confused  with this.   With regard  to aquatic                                                               
shellfish, she offered her belief that it is a really good idea.                                                                
                                                                                                                                
REPRESENTATIVE McGUIRE  told members, "Representative  Scalzi and                                                               
I spent  some time  trying to  figure out  exactly how  you could                                                               
come at it, because  it's a type of farming that  is more akin to                                                               
planting  trees than  it is  anything  else, and  yet you're  ...                                                               
looking at  aquaculture."   Calling it  an interesting  idea, she                                                               
offered her  belief that taking  no more  than 20 percent  of the                                                               
biomass is consistent with sustained yield.  She added:                                                                         
                                                                                                                                
     I  think  the  responsibility is  incumbent  upon  that                                                                    
     person who  ... gets  that permit  to then  replant 100                                                                    
     percent of what  they have taken from  the biomass, and                                                                    
     I think  that's how  we do responsible  development, as                                                                    
     opposed to  allowing people to  have access  to permits                                                                    
     and  come in  and  sort  of clean  out  the very,  very                                                                    
     lucrative  geoduck, and  market them  off ...  to Asia,                                                                    
     and ... never come back in and replant.                                                                                    
                                                                                                                                
Number 0972                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE  indicated Mr.  Fuhs and  Alaska Trademark                                                               
Shellfish have done  a lot of work on this,  and that many others                                                               
have done hard work as well,  looking at the constitution and the                                                               
legislature's previous  statements.  She offered  her belief that                                                               
this  industry has  viability in  Alaska, and  asked what  better                                                               
committee  exists than  this  to  give it  a  boost  and get  the                                                               
discussion  going.   She  also  offered  comments from  a  former                                                               
teacher of  hers who runs an  oyster farm in Kachemak  Bay, who'd                                                               
indicated her belief  that those earning their  livelihood from a                                                               
resource  will necessarily  be good  stewards  of that  resource.                                                               
Noting  that   there  is  a   tremendous  market   for  geoducks,                                                               
particularly in Asia, she announced support for this.                                                                           
                                                                                                                                
Number 1091                                                                                                                     
                                                                                                                                
MR. FUHS, in response to  a question from Chair Heinze, explained                                                               
that  geoducks are  large, longneck  clams that  can weigh  up to                                                               
three or four pounds.  They  dig themselves up to three feet down                                                               
in sandy substrate  and are filter feeders.  All  that sticks out                                                               
is the neck.   They take in plankton and so  forth that floats by                                                               
and thus  are habitat-dependent.   If a  predator tries to  eat a                                                               
geoduck, the geoduck pulls its neck back in.                                                                                    
                                                                                                                                
Number 1129                                                                                                                     
                                                                                                                                
MR.  FUHS,  noting  that  the lawsuit  he'd  mentioned  is  still                                                               
"outstanding  before the  Alaska  Supreme Court"  with regard  to                                                               
constitutional  issues, told  members,  "We've  indicated to  the                                                               
Alaska attorney general  and we would indicate to you  now - that                                                               
if  we  can  resolve  this   through  legislation  and  put  this                                                               
management regime in place, ...  we will drop those lawsuits, and                                                               
we can quit wasting our money on lawyers [and] can go to work."                                                                 
                                                                                                                                
Number 1169                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOTT  pointed  out   that  backup  materials  say                                                               
geoducks  can weigh  up to  twenty pounds,  whereas Mr.  Fuhs had                                                               
mentioned two  to three pounds.   He asked about  the discrepancy                                                               
and whether the twenty pounds is huge for a geoduck.                                                                            
                                                                                                                                
MR.  FUHS answered  that  it  depends on  the  area.   Generally,                                                               
mature animals farmed  at five to seven years would  weigh two to                                                               
three pounds.  However, they can grow up to three feet long.                                                                    
                                                                                                                                
Number 1204                                                                                                                     
                                                                                                                                
CHAIR HEINZE added that a grid  is set and the necks are counted,                                                               
which is  how someone can tell  the number of pounds  of geoducks                                                               
in a particular bay; only 20  percent of those could be harvested                                                               
[under the proposed  bill], followed by replanting.   In response                                                               
to Representative Crawford, she said it is a dive fishery.                                                                      
                                                                                                                                
MR. FUHS  affirmed that it  is exclusively  a dive fishery.   The                                                               
geoducks are in 20 to 60 feet [of  water], so no nets are seen on                                                               
the surface, although  four buoys with markers on  them will [lie                                                               
outside]  the  limits of  the  lease  site.    In response  to  a                                                               
question from  Chair Heinze  as to  whether divers  both maintain                                                               
and harvest the  geoducks, Mr. Fuhs answered  in the affirmative.                                                               
Noting that there  are some commercial fisheries,  he pointed out                                                               
that  under the  legislation  someone  must be  in  an area  that                                                               
doesn't have a commercial fishery.  He continued:                                                                               
                                                                                                                                
     Some  of these  areas are  just  too far  away for  the                                                                    
     commercial  divers to  go.   Their fishery  lasts about                                                                    
     two  weeks  up  here,  and they  don't  really  replant                                                                    
     anything.   So these  are fairly  long-growing animals,                                                                    
     so they basically  move from one site to  the next, ...                                                                    
     pretty much  stripping them  down.   And that's  why we                                                                    
     thought  this  was an  even  higher  level of  resource                                                                    
     management  than the  commercial dive  fishery, because                                                                    
     we ... would be replacing 100 percent of them.                                                                             
                                                                                                                                
     Now,  we planted  something  like  40,000 animals  last                                                                    
     year,  just pretty  much  as  a test  to  see what  the                                                                    
     survivability would  be, and 70 percent  survived.  So,                                                                    
     you took your  20 percent out; you'd go  back and you'd                                                                    
     plant 130 or 140 percent  of the number of animals that                                                                    
     you took  out, to  make sure  that after  your survival                                                                    
     rate  you'd replaced  100 percent  -  although all  the                                                                    
     farmers  say  they'll  plant  even  denser  than  that,                                                                    
     because  you ...  can plant  them  denser than  they'll                                                                    
     occur naturally.                                                                                                           
                                                                                                                                
Number 1316                                                                                                                     
                                                                                                                                
REPRESENTATIVE  KOHRING suggested  looking at  changing the  name                                                               
to something more marketable once  large numbers are being farmed                                                               
and harvested.   He  pointed out  that spider  crab was  far less                                                               
marketable until the name was changed to snow crab.                                                                             
                                                                                                                                
Number 1346                                                                                                                     
                                                                                                                                
REPRESENTATIVE   McGUIRE  mentioned   oyster  farmers   as  well,                                                               
emphasizing  that the  market  exists  and won't  go  away.   The                                                               
question, she suggested, is whether Alaska wants to participate.                                                                
                                                                                                                                
Number 1371                                                                                                                     
                                                                                                                                
MR.  FUHS,  in  response  to Representative  Crawford  and  Chair                                                               
Heinze,  explained  that  brood  stock is  taken  from  sites  in                                                               
Southeast Alaska and sent to a hatchery in Seward.  He added:                                                                   
                                                                                                                                
     They're very  successful at hatching them.   Their main                                                                    
     problems are  financial.  The  state spent,  I believe,                                                                    
     $2.3  million to  build  that  shellfish hatchery,  and                                                                    
     since  all the  permits  have been  blocked  to do  it,                                                                    
     they're  in deep  financial trouble  and that  hatchery                                                                    
     needs ... this  type of thing to go  forward if they're                                                                    
     going to economically survive.                                                                                             
                                                                                                                                
CHAIR  HEINZE  remarked  that  she'd   briefly  spoken  with  the                                                               
governor, who'd conveyed  that this is a wonderful  idea and that                                                               
he would be supportive.  She  shared her own excitement about the                                                               
bill.  [End of discussion of what became HB 95.]                                                                                
                                                                                                                                
ORGANIZATIONAL MEETING                                                                                                        
                                                                                                                                
Number 1450                                                                                                                     
                                                                                                                                
CHAIR   HEINZE  returned   the  committee's   attention  to   the                                                               
organizational portion  of the meeting and  discussed sections of                                                               
the extensive handout she'd provided.   She then asked members to                                                               
outline their reasons for wanting to be on the committee.                                                                       
                                                                                                                                
Number 1640                                                                                                                     
                                                                                                                                
REPRESENTATIVE  CRAWFORD  discussed  his interest  in  developing                                                               
hydrogen  fuel.   He also  mentioned alternative  energy such  as                                                               
geothermal,  tidal, and  wind power,  but pointed  out that  with                                                               
most  alternative energy,  there is  no way  to store  the energy                                                               
generated, whereas hydrogen fuel could be transported.                                                                          
                                                                                                                                
Number 1717                                                                                                                     
                                                                                                                                
REPRESENTATIVE KOHRING  responded that  Representative Crawford's                                                               
were good  ideas, but said  it is mostly  undeveloped technology.                                                               
He  discussed  the  idea  of   geothermal  energy  briefly.    He                                                               
emphasized  his  desire  to  look   at  oil  and  gas,  including                                                               
liquefied natural gas (LNG).                                                                                                    
                                                                                                                                
CHAIR  HEINZE brought  up  Sakhalin Island,  where  she said  350                                                               
Alaskan citizens work.                                                                                                          
                                                                                                                                
Number 1790                                                                                                                     
                                                                                                                                
RONDA THOMPSON,  Staff to  Representative Cheryll  Heinze, Alaska                                                               
State Legislature, added to the discussion.                                                                                     
                                                                                                                                
Number 1835                                                                                                                     
                                                                                                                                
REPRESENTATIVE  DAHLSTROM  referred to  Representative  Kohring's                                                               
remarks  and expressed  her own  interest  in developing  natural                                                               
gas.                                                                                                                            
                                                                                                                                
Number 1850                                                                                                                     
                                                                                                                                
REPRESENTATIVE McGUIRE  highlighted her  interest in  seafood and                                                               
mariculture,  in particular,  noting  that Korea  is an  existing                                                               
market.                                                                                                                         
                                                                                                                                
Number 2011                                                                                                                     
                                                                                                                                
REPRESENTATIVE CISSNA  discussed her interest in  two industries:                                                               
health and education.                                                                                                           
                                                                                                                                
REPRESENTATIVE CRAWFORD  followed up by noting  that in Louisiana                                                               
money has gone toward educational  facilities and the university,                                                               
which have been an "economic engine" there.                                                                                     
                                                                                                                                
Number 2253                                                                                                                     
                                                                                                                                
CHAIR  HEINZE briefly  discussed filming  in Alaska  and tourism.                                                               
She asked  members to  be thinking  of ideas.   She  mentioned an                                                               
upcoming fish exposition  at the World Trade  Center in Anchorage                                                               
on March 4-5.                                                                                                                   
                                                                                                                                
TAPE 03-1, SIDE B                                                                                                             
Number 2384                                                                                                                     
                                                                                                                              
CHAIR HEINZE mentioned the PAC COM [Pacific Rim  Construction Oil                                                               
Mining] Expo as well.                                                                                                           
                                                                                                                                
MS. THOMPSON highlighted the "Canada Gala"  to be held March 8 in                                                               
Anchorage.                                                                                                                      
                                                                                                                              
CHAIR HEINZE informed members that  a trip would be planned, with                                                               
the destination to be determined later.                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
Number 2284                                                                                                                     
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Economic Development,  International Trade                                                               
and Tourism meeting was adjourned at 5:53.                                                                                      
                                                                                                                                
NOTE:  The  meeting was recorded.   A copy of the  tape(s) may be                                                               
obtained  by  contacting  the  House   Records  Office  at  State                                                               
Capitol, Room  3, Juneau, Alaska  99801 (mailing  address), (907)                                                               
465-2214,  and after  adjournment of  the second  session of  the                                                               
Twenty-Third  Alaska State  Legislature this  information may  be                                                               
obtained  by  contacting  the Legislative  Reference  Library  at                                                               
(907) 465-3808.                                                                                                                 

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