02/02/2007 08:30 AM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Ocean Beauty Seafoods, Incorporated, Products and Marketing | |
| Overview: Department of Labor & Workforce Development – Fisherman's Fund | |
| HB26 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 26 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
February 2, 2007
8:36 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Kyle Johansen
Representative Gabrielle LeDoux
Representative Peggy Wilson
Representative Bryce Edgmon
Representative Lindsey Holmes
MEMBERS ABSENT
Representative John Harris
COMMITTEE CALENDAR
OVERVIEW(S):
OCEAN BEAUTY SEAFOODS, INCORPORATED, PRODUCTS AND MARKETING
- HEARD
DEPARTMENT OF LABOR & WORKFORCE DEVELOPMENT - FISHERMAN'S FUND
- HEARD
HOUSE BILL NO. 26
"An Act relating to aquatic farm permitting involving geoducks
and to geoduck seed transfers between certified hatcheries and
aquatic farms."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 26
SHORT TITLE: GEODUCK AQUATIC FARMING EXEMPTION
SPONSOR(s): REPRESENTATIVE(s) SEATON
01/16/07 (H) PREFILE RELEASED 1/5/07
01/16/07 (H) READ THE FIRST TIME - REFERRALS
01/16/07 (H) FSH, RES
02/02/07 (H) FSH AT 8:30 AM CAPITOL 124
WITNESS REGISTER
MARK PALMER, President
Ocean Beauty Seafoods, Incorporated
Seattle, Washington
POSITION STATEMENT: Provided an overview of Ocean Beauty
Seafoods, Incorporated.
TOM SUNDERLAND, Director
of Marketing
Ocean Beauty Seafoods, Incorporated
Seattle, Washington
POSITION STATEMENT: Provided an overview of Ocean Beauty
Seafoods, Incorporated.
PAUL LISANKIE, Director
Division of Workers' Compensation
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Provided an overview of the Fisherman's
Fund.
MIKE MONAGLE, Administrator
Fishermen's Fund Advisory & Appeals Council
Division of Workers' Compensation
Department of Labor & Workforce Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the overview of
the Fishermen's Fund.
ACTION NARRATIVE
CHAIR PAUL SEATON called the House Special Committee on
Fisheries meeting to order at 8:36:50 AM. Representatives
Johansen and Edgmon were present at the call to order.
Representatives LeDoux, Holmes, and Wilson arrived as the
meeting was in progress.
^OVERVIEW: OCEAN BEAUTY SEAFOODS, INCORPORATED, PRODUCTS AND
MARKETING
8:37:06 AM
CHAIR SEATON announced that the first order of business would be
a presentation regarding Alaska seafood from Ocean Beauty
Seafoods, Incorporated.
8:37:51 AM
MARK PALMER, President, Ocean Beauty Seafoods, Incorporated
(Ocean Beauty), informed the committee that Ocean Beauty has
seven shore-based processing facilities located throughout
Alaska. Over the last five years, Ocean Beauty has focused on
modernizing those shore-based facilities. Mr. Palmer recalled
the passage of Senate Bill 164, a value-added salmon tax credit,
that has been in place for four years. That tax credit was a
catalyst for starting more value-added processing in the state.
Ocean Beauty has utilized that tax credit every year it has been
in existence. In fact, last year Ocean Beauty added another $2
million worth of value-added capacity to the facilities in
Southeast and Kodiak. The aforementioned has resulted in
additional jobs. He relayed that last year 60 new processing
jobs directly related to the value-added processing were
created. Furthermore, Ocean Beauty had approximately $900,000
in additional payroll and purchased about 3 million more pounds
of salmon.
8:41:07 AM
MR. PALMER related that several years ago the state offered low
interest loans to fishermen for the purpose of adding
refrigerated sea water (RSW) onboard the vessels. However, the
amount of response exhausted those funds within two days, he
recalled. The aforementioned, he suggested, illustrates that if
the opportunity is available, fishermen are interested in
modernizing their fleet. Mr. Palmer encouraged the state to
support any program that offers incentives to upgrade the
vessels because many vessels within the state still don't have
the ability to chill their catch after harvest. Mr. Palmer also
encouraged the state to make the aforementioned available to all
permit holders. He then related that this summer Ocean Beauty
will begin a pilot program out of Bristol Bay for the handling
of sockeye. One of the most limiting factors in that area of
the state is the availability of ice, he noted. He suggested
that the state consider additional ice barges in areas of the
more remote fisheries where there isn't the ability to service
the fleet. Mr. Palmer explained that once the fish is taken out
of the water, the marketing effort has to increase the amount of
high quality raw material in order to support product
development.
MR. PALMER turned attention to manufacturing efficiencies. He
explained that there are a variety of customers who are pushing
initiatives for more efficiency in the use of energy, packaging,
and transportation. He mentioned Wal-Mart's initiatives and
characterized it as good business. He opined that what was once
referred to as infrastructure will in the future be referred to
as marketing. He then turned over the presentation to Mr.
Sunderland.
8:44:58 AM
TOM SUNDERLAND, Director of Marketing, Ocean Beauty Seafoods,
Incorporated, began by discussing the market-driven
environmental initiatives such as the one being promoted by Wal-
Mart. He explained that formal score cards are published in
regard to how [companies] are to behave [with regard to
efficiencies]. [Wal-Mart's packaging scorecard] went into
effect yesterday and companies will have one year to [implement
policies and procedures to address efficiencies]. The first
grade will be published February 1, 2008, at which time the
managers purchasing the product within Wal-Mart will have
incentives to [purchase] the product of those with good scores.
He noted that other stores, such as Safeway are using similar
score card methods. Mr. Sunderland highlighted that 15 percent
of Wal-Mart's score card is based on comparative green house gas
CO production. The aforementioned isn't something over which
2
Ocean Beauty, as a manufacturer, has control. Furthermore, the
score card indicates environmental responsibility that will
represent 20 percent of the score in which Alaska seafood
manufacturers will be compared to each other as well as to food
manufacturers. Businesses in Alaska will have to compete with
businesses that are much more streamlined and have a much easier
manufacturing environment. Mr. Sunderland opined that
[businesses in Alaska] are facing a large change in regard to
how the world views Alaska's manufacturing processes. He
further opined that individual business owners will have a very
difficult time succeeding without assistance.
8:48:45 AM
MR. PALMER informed the committee that the amount of waste that
the seafood system puts back in the sea could be recaptured for
use in fuels and other possibilities. When economically viable,
such as with the Kodiak fish meal plant, the waste is recaptured
and marketable products are produced. In that situation, the
value for the fishermen in the region is increased. However,
those plants don't exist elsewhere primarily because such plants
aren't economically viable. For instance, in Cordova there
isn't any pollock production because there isn't the ability to
deal with the waste. Mr. Palmer opined that industry isn't
going to come forward and do things that aren't economically
viable but rather will wait for regulatory pressures. Moreover,
some parts of the state are aligned well to address
[environmental initiatives], such as those areas that utilize
hydropower energy, while other areas aren't. Mr. Palmer said he
didn't want the situation to become one in which sections of the
state are seen as producing good Alaska fish and others not.
8:51:26 AM
MR. PALMER related that traditionally marketing has included
brands, advertising, trade promotion, and new product
development. The state, he opined, has done an outstanding job
supporting such efforts via the Alaska Seafood Marketing
Institute (ASMI) and various grant programs. A fair amount of
new products have been created, which has resulted in a fair
amount of modernization in the facilities creating those
products. The largest concern at this point is having the
ability to acquire enough high quality raw material to support
the growth [of these new products] because there is a finite
amount of top quality fish from the state. He mentioned the
need to concentrate efforts on the under utilized species. He
then related his belief that it's important to place initiatives
before the vessels. However, the [environmental initiatives
with respect to marketing] are new pressures.
8:52:40 AM
MR. PALMER then turned to transportation and pointed out that
fuel and air costs have limited access to some areas of the
state. One such area is Cordova. He highlighted the success of
the Copper River story and the value of its fish, which is
largely dependent upon the fish being fresh. The value drops by
half when the fish is frozen. If limited transportation limits
moving the product, the value of the fishery is placed at risk.
He said that he would like to coordinate more with
transportation issues because there are few transportation
options out of Cordova. By having the ferry arrive earlier in
the season and stay later Cordova is provided a huge opportunity
to utilize ground transportation where air transportation is
lacking.
8:55:01 AM
REPRESENTATIVE LEDOUX asked if any of the boats deliver to
Valdez rather than Cordova.
MR. PALMER acknowledged that Cordova and Valdez are close in
proximity. Although Valdez has access to ground transportation
through trucking, it doesn't service the fleet and processors in
Cordova. The largest percentage of the fish are landed in
Cordova.
8:55:49 AM
MR. PALMER continued his presentation by reiterating that Ocean
Beauty has focused its efforts on under utilized species such as
pink, chum, and Bristol Bay sockeye. Those species represent
85 percent of the production in pounds last year and the lowest
value in each species. Therefore, Ocean Beauty has focused its
efforts to raise the bar in that arena in order to make a
difference to shore-side communities, the fishermen, and the
value of the state's fisheries overall. Mr. Palmer thanked the
state for the support it has provided in the form of marketing
grants, but suggested that the state needs to address some of
the basic infrastructure, production, and manufacturing issues
that exist.
8:57:01 AM
MR. SUNDERLAND explained that with marketing, there are a few
things to keep in mind during product development. First, the
byproduct is addressed. The remaining matters to address are
the product itself and how to increase its value while
addressing new forms of the product. As Ocean Beauty has
succeeded with some products, the biggest issue has become
obtaining enough high quality raw material to raise the value of
the product. Ocean Beauty feels that basic product quality, how
the fish comes out of the water, is where Ocean Beauty could use
some assistance from the state.
8:59:40 AM
REPRESENTATIVE JOHANSEN opined that the traditional battle
between processors and fishermen must cause difficulties.
Therefore, he asked if Ocean Beauty feels it's making progress.
MR. PALMER pointed out that the harvester would like to see the
prices of raw materials increase each year. The consumer would
like to know why the price has increased. He explained that
Ocean Beauty would like to know what improvements were made to
justify a higher price for the product. He acknowledged
increased fuel and insurance prices. To make real incremental
improvement, something different has to occur at the boat level.
In fact, this last year Ocean Beauty invited two fishermen from
different gear types from each part of the state to educate them
through financial transparency. He opined that many fishermen
understand that in order to "raise the bar" they will have to
coordinate their efforts with the processors.
9:03:25 AM
CHAIR SEATON, speaking as a fisherman, opined that financial
transparency makes a lot of difference. Chair Seaton then
recalled that the state could assist by providing ice barges in
Bristol Bay.
MR. PALMER acknowledged that not every fishery needs the same
assistance and thus it would require some research to determine
which areas of the state could utilize ice bled handling
programs.
9:05:22 AM
CHAIR SEATON indicated interest in Mr. Palmer forwarding the
committee any information he acquires regarding the specific
items needed in specific regions. He then asked if the score
card is proprietary. He also recalled Mr. Palmer expressing
interest in the Cordova to Whittier ferry runs.
MR. PALMER said that a score card is included in the committee
packet. Mr. Palmer noted that another way in which the state
could provide support for the environmental initiatives is
through low interest loans for harvesters to modernize their
vessels. He also mentioned that there should be review of
private and public partnerships for community fish meal
facilities to address waste and ways in which to reincorporate
the proteins and pharmaceutical and nutraceutical products. Mr.
Palmer said that he would provide the committee with more detail
with regard to the specifics of the energy audits and score card
process.
9:08:01 AM
REPRESENTATIVE EDGMON mentioned that a chef in Seattle,
Washington, is opening a restaurant in New York with the name,
"Wild Salmon." He inquired as to Ocean Beauty's perspective in
terms of market penetration and potential opportunity with such
an effort.
MR. SUNDERLAND related his understanding that the "Wild Salmon"
restaurant will operate under the concept of regional cuisine of
Alaska and the remainder of the Pacific Northwest. This
restaurant is an opportunity to build the Alaska brand and the
idea of what Alaska seafood really is. Mr. Sunderland
highlighted the power of the New York press, which presents a
much larger opportunity than merely how much fish is sold to the
restaurant. The restaurateurs backing this restaurant, he
related, are also restaurateurs in Europe.
9:11:31 AM
REPRESENTATIVE LEDOUX inquired as to how the score card program
works.
MR. SUNDERLAND explained that all suppliers will be scored and
it will be a public score published within Wal-Mart. This score
along with price will be the primary measure [for deciding from
whom to buy products]. He reiterated earlier testimony that
Wal-Mart views this score card as a way in which it can provide
low prices in the future. Wal-Mart views this score card
program as an opportunity to become more efficient.
Furthermore, Wal-Mart sees itself as better at efficiency than
others and thus it will be better at this than others. He
emphasized that this score card program is enormous.
9:14:15 AM
REPRESENTATIVE LEDOUX asked whether it's Wal-Mart's intent to
get ahead of the eventual regulations because she didn't view it
as really helping Wal-Mart's efficiency.
MR. SUNDERLAND noted his agreement with Representative LeDoux
regarding that Wal-Mart sees this score card program as
providing a public relations component and getting ahead of
potential laws. However, all that Wal-Mart has stated is that
if it can reduce the amount of fuel used, packaging being
disposed of, and minimize carbon emission, it will all provide a
more efficient product that will reduce the price to the
consumer.
9:16:10 AM
REPRESENTATIVE LEDOUX inquired as to who has access to these
scores from the Wal-Mart score card.
MR. SUNDERLAND said that he didn't know, although he said he
would be surprised if the score card was transparent through to
the public.
9:16:43 AM
REPRESENTATIVE WILSON inquired as to the percentage of the
market Ocean Beauty has in Alaska.
MR. PALMER specified that in 2006 Ocean Beauty processed 17
percent of all the salmon in the state. In further response to
Representative Wilson, Mr. Palmer related his understanding that
the aforementioned was the largest single percentage of salmon
by a single processor. He reminded the committee that Ocean
Beauty is primarily a shore-based salmon processing facility,
which employs nearly 2,000 people in the state to run those
salmon operations. During the last nine years the salmon market
has been a difficult market, although it's now beginning to turn
around. Ocean Beauty has found a balance between its position
in the market, product development, and variety of products
which has resulted in the company being a survivor in the salmon
industry.
^OVERVIEW: DEPARTMENT OF LABOR & WORKFORCE DEVELOPMENT -
FISHERMAN'S FUND
9:20:22 AM
CHAIR SEATON then announced that the next order of business
would be the overview from the Department of Labor & Workforce
Development regarding the Alaska Commercial Fishermen's Fund.
9:21:01 AM
PAUL LISANKIE, Director, Division of Workers' Compensation,
Department of Labor & Workforce Development (DLWD), explained
that the Alaska Commercial Fishermen's Fund ("Fishermen's Fund")
was established in 1951. The Fishermen's Fund was established
as a dedicated fund and was grandfathered in after statehood in
Article IX of the Alaska State Constitution. The revenue stream
of the fund comes from 39 percent of all money paid to the state
for commercial fishing licenses and limited entry permits. The
cap is $50 per individual. In 2006 the revenue stream paid in
was just under $982,000. Over the last four years, the revenue
stream for the Fishermen's Fund has amounted to about $1 million
per year. Mr. Lisankie explained that although the fund is
administered within DLWD, the Department of Revenue is the
custodian of the funds. Through very careful stewardship over
many years, the Fishermen's Fund has been able to develop a
balance that is carried forward each year and invested by the
Division of Treasury. Up to 50 percent of the interest earned
on that balance can be appropriated for statewide marine safety
training and education programs. Mr. Lisankie informed the
committee that beyond the legislature and the House Special
Committee on Fisheries, the Fishermen's Fund is also overseen by
the Fishermen's Fund Advisory & Appeals Council. Members of the
council are appointed by the governor and serve five-year
staggered terms. The members are from one of the five fishing
districts of the state, he noted.
9:25:09 AM
MR. LISANKIE turned to the daily activities of the staff
administering the fund. The staff consists of two full-time
technicians and an administrator. The administrator manages
both the Fishermen's Fund and the Second Injury Fund, and
therefore the Fishermen's Fund pays a pro-rated amount of his
salary. The division's administrative manager and director also
provide assistance to the fund. Mr. Lisankie then turned to the
benefits and procedures for payment. He explained that the
benefit is the health care costs that are reimbursed to
providers for health care that is given to licensed commercial
fishermen for injuries and certain occupational diseases, which
are listed in statute. The aforementioned must be directly
connected with commercial fishing activities either on-shore or
in Alaska waters. In terms of this statute, Alaska waters are
defined broadly to include the entire 200-mile limit for payment
of this fund. The cap on what can be paid out under this
statute is $2,500, with a one-year duration of benefits.
However, the statute provides for an individual to request an
extension of the duration of benefits or an extension of the
amount of benefits. The statute specifies that the extension
may be granted for "compelling reasons," which is fairly broad
language. Mr. Lisankie noted that there are no payments for any
costs covered by any other insurance. The Fishermen's Fund is
essentially a "payer of last resort" and is designed to provide
commercial fishermen some limited amount of support when there
is no other source of payment for health care. He offered to
provide the committee with a booklet that summarizes the
requirements and procedures as well as a claim form.
9:28:57 AM
REPRESENTATIVE WILSON inquired as to the diseases covered by the
Fishermen's Fund. She pointed out that the language specifies
that the [fund] covers arthritis, heart disease, and diabetes.
However, she questioned whether those directly result from
fishing.
MR. LISANKIE commented that those diseases are the most
difficult conditions for the council to address. He indicated
that [the council] provides the individual [fisherman] the
opportunity to describe how the aforementioned conditions have
accelerated, been aggravated, or made worse. The council is
left to determine whether the conditions truly fit within the
statutory prescription.
9:29:56 AM
REPRESENTATIVE LEDOUX began by relating her belief that the
Fishermen's Fund is a great program. However, she expressed
concern with the crew members being charged, through the
license, for the program because under maritime law a vessel
owner is held responsible for any injury incurred or manifested
during the course of a crew member's employment on the vessel.
Therefore, charging the crew member seems to shift the
responsibility.
MR. LISANKIE acknowledged Representative LeDoux's concern.
REPRESENTATIVE LEDOUX pointed out that maritime law goes back to
Roman times. She characterized the maritime law as a salt water
variety of workers' compensation since she said she understood
that the crew members [aren't covered] under the Workers'
Compensation Act.
MR. LISANKIE noted his agreement that commercial fishermen
aren't covered under the Workers' Compensation Act.
9:31:47 AM
MIKE MONAGLE, Administrator, Fishermen's Fund Advisory & Appeals
Council, Division of Workers' Compensation, Department of Labor
& Workforce Development, related that most of the vessel owners
carry insurance, although they aren't required to do so by law.
Furthermore, most polices for protection and indemnity have high
deductibles and don't cover the permit holder or the skipper.
The Fishermen's Fund, he opined, takes the crew member out of
the position of trying to collect the cost for medical treatment
from the skipper when the skipper is paying out of pocket. Upon
a review last year, it was discovered that about 90 percent of
the claims were less than $2,500 and thus very few claims are
for severe [injuries] in excess of $2,500. He acknowledged that
there are private means of coverage. He then pointed out that
many of the claims are from the skippers who aren't covered by a
protection and indemnity policy.
9:33:13 AM
MR. LISANKIE continued his presentation by noting that most of
the materials [related to the Fishermen's Fund] are available on
the website. The Internet is also being used for consultations
with the Fishermen's Fund Advisory & Appeals Council in order to
avoid the expense of transportation and the logistics of getting
all parties in one location at the same time. Mr. Lisankie
explained that a claimant who is unhappy with his/her complaint
to the Fishermen's Fund Advisory & Appeals Council can appeal to
the commissioner of DLWD. He said he suspected that an
individual wishing to take it further could go to court.
9:35:09 AM
MR. LISANKIE then turned to the fiscal environment of the
Fishermen's Fund. He explained that over the last few years the
revenue stream of the Fishermen's Fund has been on a downward
arc. From fiscal year 1987-1996, the revenue of the Fishermen's
Fund was about $1.5 million per year while from 1997-2006 the
fund's revenue decreased to about $1.1 million. Mr. Lisankie
opined that the aforementioned trend reflects that fewer
licenses were being sold. During the last 10 years, the
Fishermen's Fund has made payments on 795 claims, totaling about
$591,000 year. After the cost of administration [has been
deducted], the Fishermen's Fund has on average been left with a
surplus each year of $280,000. This last year was the first
year in perhaps 15 years in which the Fishermen's Fund operated
with a deficit of about $250,000 due to a large spike in the
benefits paid out and administrative costs related to computers.
Mr. Lisankie relayed that he and Mr. Monagle discussed the
aforementioned with members of the Fishermen's Fund Advisory &
Appeals Council and assured them that the intention is to return
the expenses to their prior level as the computer expenses were
a one-time cost.
9:38:31 AM
MR. LISANKIE addressed the short-term crew member licenses. He
informed the committee that in 2006 about 512 short-term crew
member licenses were sold. Part of the aforementioned computer
change was to monitor claims activity by the short-term crew
member license. The holders of those short-term crew members'
licenses didn't submit any claims. Therefore, in 2006 there was
no negative effect to the health of the Fishermen's Fund and
thus the revenues from the short-term crew member licenses were
utilized to support full-time license holders. He noted that
the aforementioned license and its impact on the fund will
continue to be monitored.
9:39:40 AM
CHAIR SEATON recalled that part of the concern with short-term
crew member licenses is the possibility of purchasing multiple
licenses rather than a full out-of-state commercial fishing
license. Chair Seaton expressed interest in whether there is a
downward trend in full price nonresident commercial fishing
licenses.
HB 26-GEODUCK AQUATIC FARMING EXEMPTION
9:40:28 AM
CHAIR SEATON announced that the final order of business would be
HOUSE BILL NO. 26, "An Act relating to aquatic farm permitting
involving geoducks and to geoduck seed transfers between
certified hatcheries and aquatic farms."
9:40:54 AM
CHAIR SEATON passed the gavel to Representative Johansen.
9:41:22 AM
REPRESENTATIVE SEATON, speaking as the prime sponsor of HB 26,
explained that HB 26 says that an aquatic farm permit or
transfer permit can't be denied merely because geoducks aren't
in the area or aren't wild in the area a farm or transfer permit
is requested. Representative Seaton informed the committee that
no one has approached him requesting such legislation nor has he
ever applied for a mariculture permit and doesn't intend to do
so. He further informed the committee of his various
educational degrees and 30 years as a commercial fisherman.
Representative Seaton opined that he knows what is happening in
the state's fisheries and the volatility of the industry, and
therefore as a representative of the state he is looking at
alternative economic opportunities for the state's coastal
communities. Mariculture, if it can be done well, seems to be a
logical choice for [coastal areas in Alaska]. Representative
Seaton noted that he fought salmon farming in Alaska because it
has many negatives, such as genetic problems and escapees.
However, geoduck clams are a unique animal and in fact, once
geoducks are out of the larval stage they sit in one spot [and
aren't located] in high energy beach areas. Furthermore, there
are no known infectious diseases with geoducks, which have been
intensively studied in Puget Sound. Geoduck farming is taking
place in Washington and British Columbia, he related.
9:47:17 AM
REPRESENTATIVE SEATON, in response to Representative LeDoux,
explained that a high energy beach is a beach that would have a
fairly large amount of wave action or strong tidal currents that
move the sediment. The geoduck, he further explained, doesn't
dig down out of the way as a razor clam would. Geoducks aren't
mobile and sit in one spot for their entire life.
9:48:05 AM
REPRESENTATIVE WILSON asked whether geoducks could be seeded and
thrive in areas that have never had this species.
REPRESENTATIVE SEATON informed the committee that in Seward, the
location of the single mariculture hatchery, geoducks are placed
in the water without heating it. The geoducks seem to do fine.
In fact, the temperature is raised to encourage the geoducks to
spawn. There is no knowledge as to whether geoducks would ever
spawn in the wild in areas such as Kodiak. He reminded the
committee that geoducks are filter feeders and won't require any
food. Furthermore, nothing has been identified as a competitor
of geoducks. Thus far, he said he has only heard that geoducks
might displace some polykete worms. However, Puget Sound
studies have shown that after harvesting the geoducks there was
a slightly higher number of polykete worms. Representative
Seaton related that in Puget Sound geoducks are intertidal,
which wouldn't occur in Alaska because of Alaska's winters.
Geoducks in Alaska would be located in 20-30 feet of water and a
jet hose is utilized to loosen the substrate and harvest the
geoduck. With regard to the issue of contamination, he said,
"We don't have to worry about that, we're already taking the
geoducks here from Southeastern up there; there are no geoducks
up there and so we don't have to worry about contamination
between wild stock and the other."
REPRESENTATIVE SEATON then addressed the geoduck controversies,
which revolved around having a wild stock that commercial
fishermen gathered versus farmers who wanted to farm in the same
area. The farming was desired in those areas because there
would be standing stock that could support the farm. The other
dispute was if [a farmer] takes the area where geoducks are
growing, that area is taken from the commercial harvester. The
aforementioned isn't a problem if the geoduck farming takes
place in Kodiak, Sand Point, or the outer Kenai Peninsula. He
highlighted that the state has established the Seward
mariculture hatchery and its business plan calls for supplying
stock. However, oysters, which are cheap, can be imported and
thus it won't support the hatchery operations. Therefore, the
business plan relies on geoducks, for which the first purchase
has materialized. Representative Seaton opined that [the
legislature] needs to determine whether to subsidize the
hatchery forever, provide a diversity of buyers or abandon the
industry. He further opined that HB 26 provides a good
alternative. However, the current policy prohibits the farming
of geoducks outside Southeast Alaska because that's the only
wild location of geoducks.
9:55:04 AM
REPRESENTATIVE WILSON recalled that those interested in geoduck
farming in Southeast had to wait for the department to identify
sites available for farming. However, one individual who isn't
an Alaskan applied for a number of the sites. Therefore, she
asked if the sponsor would be amenable to limiting the number of
farming sites he/she could lease at one time.
REPRESENTATIVE SEATON characterized those as regulatory issues
with which he didn't have a problem. He related his presumption
that local people would apply for the farms because one would
need to be in the area to work the farms. Therefore, he
suggested that there could be a point system for having a work
force. He pointed out that the permit requires identification
of the workforce. The aforementioned may prove difficult for
someone from New York applying for a geoduck farm.
Representative Seaton said that he didn't have a problem with
some such mechanism, but he pointed out that it isn't necessary
in HB 26.
9:58:09 AM
REPRESENTATIVE SEATON, in response to Representative Wilson,
related his understanding that without a jet wand to loosen the
substrate, it would be difficult to harvest the geoducks. He
noted that marine mammals will eat geoducks. He also commented
that geoducks must lead a fairly good life as some live to be up
to 140-168 years.
9:59:14 AM
REPRESENTATIVE LEDOUX asked if the geoduck farms are similar to
set net sites in which the permit holder must be on the site, or
can a permit holder hire others to run the site.
REPRESENTATIVE SEATON related his understanding that geoduck
[permit holders], unlike commercial fishing permit [holders],
don't have to be present to operate a site. He suggested that
the committee receive clarification from the department.
10:01:03 AM
REPRESENTATIVE HOLMES recalled the sponsor saying that under
current law, geoducks cannot be farmed in areas where they
aren't currently found in the wild.
REPRESENTATIVE SEATON explained that statute specifies that
"aquatic farming sites for on bottom culture of shellfish must
be located in areas where ... an indigenous population of
shellfish species to be cultivated is not present ...." The
second portion of the statute goes on to refer to those areas
where there are indigenous shellfish, wild stock. The
regulations that have been adopted are a policy call saying
there is no desire to have any shellfish where they aren't
naturally present within the larval drift zone.
10:03:21 AM
REPRESENTATIVE SEATON, in response to Representative Holmes,
confirmed that the committee packet should include the policies
and procedures. He expressed the need for members to read the
policies and procedures carefully because it says that the
policy is present to prevent genetic contamination or
interaction with wild stocks. Therefore, the rationale for the
policy decision doesn't follow the reality of the sites.
10:04:14 AM
REPRESENTATIVE JOHANSEN announced that HB 26 would be held over.
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 10:04
a.m.
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