Legislature(2003 - 2004)
02/10/2003 05:04 PM House EDT
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* first hearing in first committee of referral
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+ 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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