Legislature(1995 - 1996)
03/18/1996 05:03 PM FSH
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON FISHERIES March 18, 1996 5:03 p.m. MEMBERS PRESENT Representative Alan Austerman, Chairman Representative Carl Moses, Vice Chairman Representative Scott Ogan Representative Gary Davis Representative Kim Elton MEMBERS ABSENT All members were present. OTHER HOUSE MEMBERS PRESENT Representative Eldon Mulder COMMITTEE CALENDAR HOUSE BILL NO. 514 "An Act repealing the ban against finfish farming." - PASSED CSHB 514(FSH) OUT OF COMMITTEE PREVIOUS ACTION BILL: HB 514 SHORT TITLE: REPEAL BAN ON FINFISH FARMING SPONSOR(S): REPRESENTATIVE(S) MULDER, Kelly JRN-DATE JRN-DATE ACTION 02/12/96 2729 (H) READ THE FIRST TIME - REFERRAL(S) 02/12/96 2729 (H) FSH, RESOURCES, FINANCE 03/13/96 (H) FSH AT 5:00 PM CAPITOL 124 03/13/96 (H) MINUTE(FSH) 03/18/96 (H) FSH AT 5:00 PM CAPITOL 124 WITNESS REGISTER KARL OHLS, Resources Development Specialist Division of Trade and Development Department of Commerce and Economic Development P.O. Box 110804 Juneau, Alaska 99811-0804 Telephone: (907) 465-5467 POSITION STATEMENT: Provided department's position and answered questions regarding HB 514. JERRY McCUNE, President and Lobbyist United Fishermen of Alaska 211 Fourth Street, Suite 112 Juneau, Alaska 99801 Telephone: (907) 586-2820 POSITION STATEMENT: Testified on HB 514. GERON BRUCE, Legislative Liaison Office of the Commissioner Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99811-5526 Telephone: (907) 465-6143 POSITION STATEMENT: Provided department's position and answered questions regarding HB 514. JAMES O. COCHRAN, Mariculture Coordinator Division of Commercial Fisheries Management and Development Department of Fish and Game P.O. Box 25526 Juneau, Alaska 99802-5526 Telephone: (907) 465-6150 POSITION STATEMENT: Answered questions regarding HB 514. JANICE ADAIR, Director Division of Environmental Health Department of Environmental Conservation 555 Cordova Street Anchorage, Alaska 99501 Telephone: (907) 269-7644 POSITION STATEMENT: Provided department's position and proposed amendments on HB 514. ACTION NARRATIVE TAPE 96-14, SIDE A Number 0001 CHAIRMAN ALAN AUSTERMAN called the House Special Committee on Fisheries meeting to order at 5:03 p.m. Members present at the call to order were Representatives Austerman, Ogan and Davis. Members absent were Representatives Moses and Elton. HB 514 - REPEAL BAN ON FINFISH FARMING Number 0041 CHAIRMAN AUSTERMAN noted that the new version of HB 514, as amended the previous meeting, was before the committee. Number 0150 KARL OHLS, Resources Development Specialist, Division of Trade and Development, Department of Commerce and Economic Development (DCED), noted that he had provided written testimony. He testified that DCED generally supported new, creative ideas and ventures in the seafood industry. However, he was offering cautions based on experience with the existing seafood industry. "We found that just setting up a system for the industry to obtain its permits and start operating is not enough," he said, adding that the seafood industry was highly volatile for a number of reasons. Currently, DCED spent a lot of time trying to help the salmon industry with the international market, value-added products and competing in the global marketplace. "Even with a very mature industry like the Alaska salmon industry," he said, "you can get hit from outside by forces you might not see for some time. And you have to be prepared to put considerable government resources into backing up that industry, especially when there's already a lot of investment and a lot of constituents who are working in that industry." MR. OHLS believed oyster farming could have used additional support. "They've had to struggle to find markets, technical support on how to design their facilities, on trying to keep up with new developments in the industry, trying to find a way to market their products," he said. "This has all been left to them." He thought there was a better way, where the state could participate and help. He believed some of those lessons could be used for finfish farming. MR. OHLS briefly discussed salmon hatcheries, which had struggled as well. He emphasized the need for planning. Markets, value- added products and technical support needed to be considered for a new industry, he said. Number 0451 JERRY McCUNE, President and Lobbyist, United Fishermen of Alaska, testified that he opposed using non-native stocks. Neither did he think it would be good to move Arctic char or other species into areas where they were not native. He suggested there would be conflicts over water use. In Prince William Sound, for example, in areas where farms would be appropriate, with tide and flush-out areas, there would be conflicts with boats during summer, he indicated. Number 0599 REPRESENTATIVE SCOTT OGAN asked if Mr. McCune thought, in retrospect, that it had been wise to oppose fish farming five or six years ago. MR. McCUNE believed it was. "Number one, if we're talking about wild stocks, which grow real slow because this is cold water and the feed that you have to transport, I think we made a wise move, because in Canada, where you can drive to the farms, half the people that applied for farms are broke," he said, indicating those farms no longer existed. The farther from the marketplace a farm was, the higher transportation and other costs would be. "The processors are looking at that to compete in the world market now," he said. "The farms in Canada are right next to the market. I don't know how we would compete with that. And also, in Norway, they're subsidized, and in Chile, they have real low labor costs. So, right now, in the world global market, the Norwegian government has ordered them to cut back on the farmed fish, because it's too many fish." He noted that in Chile, Japanese farms had ordered their farmers to cut back. "In Canada, it's already weeded itself out," he said, indicating the stronger farms had formed alliances to survive. MR. McCUNE suggested that success in fish farming was in Atlantic stocks, a brown trout. He mentioned that in Norway, escapees had taken over the wild stocks, necessitating a gene pool to try to re- establish the wild stocks. "I think we made a wise choice," he reiterated, "looking at the glut of salmon on the market today." Number 0744 REPRESENTATIVE GARY DAVIS indicated he was looking to see if the bill discussed exemption of non-native species or relocation of species from one area of the state to another. MR. McCUNE referred to Title 16 and said, to his knowledge, that non-native stocks could not be imported into the state. "We can't move eggs from one area to another that are not native to that particular area," he said. "We cannot sell eggs, such as they did in Washington; they sold a lot of those eggs to make money, to other countries. And all those things are prohibited, if I remember right, under Title 16." Number 0823 REPRESENTATIVE DAVIS asked if Mr. McCune was saying they were already addressed in statute and exempted from participating. MR. McCUNE replied, "As far as I remember, and I didn't look it up today." REPRESENTATIVE DAVIS indicated he thought that was the intent of sponsor. REPRESENTATIVE MULDER, sponsor of the bill, concurred. Number 0867 GERON BRUCE, Legislative Liaison, Office of the Commissioner, Department of Fish and Game (ADF&G), said that since the previous committee meeting, ADF&G had reviewed the committee substitute and submitted a new fiscal note, dated 3/18/96. Mr. Bruce explained he was not addressing economic development or public policy concerns. Rather, he would outline ADF&G's responsibilities and address what ADF&G would have to undertake to ensure that development did not harm wild stocks nor contribute to disease problems in the state. They needed to ensure any resulting industry was well managed, well regulated and healthy. Number 0965 MR. BRUCE pointed out that in net-pen technology, fish could escape and mix with wild stocks or transmit disease. He stressed the importance of ADF&G taking steps to protect genetic integrity of wild stocks. "These animals have evolved, over long periods of time, a particular genetic make-up that enables them to survive in the particular environment in which they find themselves," he explained, adding that changes to that genetic make-up could result in less success for wild stocks. Number 1030 MR. BRUCE suggested the shellfish farming industry could give an idea of challenges facing the state in starting a new industry. Shellfish farming had depended primarily on entrepreneurs to pioneer it and was struggling. For example, shellfish farmers needed a hatchery to provide brood stock, as oysters did not naturally reproduce in Alaska and farmers had to import brood stock from out-of-state oyster farms. Although funds had been obtained from the Exxon Valdez settlement to construct a shellfish hatchery and mariculture center, proposed for Seward, the state was struggling with the financial realities of trying to operate that facility in an era of declining budgets, Mr. Bruce said. He thought many shellfish farmers would bemoan the lack of regulatory and technical support from the state in developing their industry, as they were having a difficult time going it alone. MR. BRUCE thought similar concerns applied to finfish farming. "You are going to need some way to get brood stock, for example," he said. "You probably are going to require hatcheries. It's not going to be practical for farmers to go back to the wild each and every time they want to get more eggs for whatever species they're working with. They're going to be looking for some cultured source of eggs." Mr. Bruce asked where the hatchery infrastructure would come from for fish farming in Alaska. "We're having a devil of a time getting together one just for the shellfish industry," he said, "and that's working with a species that has a lot of things going for it in terms of the market. It's a high-value product. It's very well-known and there's a lot of demand for it." He suggested ADF&G would have responsibility for regulating, and possibly providing, brood stock acquisition for finfish farming. Number 1230 MR. BRUCE indicated James Cochran, program manager for ADF&G's shellfish program, could discuss shellfish as a model for starting up a new industry in the state. He acknowledged the sponsor's intent to have this be an industry-supported program. He referred to the fiscal note and said there would be no industry the first year. "We'd be promulgating regulations and just getting things in place," Mr. Bruce said. "So, the very first year there, we show a straight general fund funding source. And then, in subsequent years, it switches over to program receipts, as the sponsor envisioned." Mr. Bruce added that ADF&G assumed there would be 50 farm applications the first year. Number 1333 CHAIRMAN AUSTERMAN referred to an earlier question about non-native stocks and moving fish to other parts of the state. He understood that to be prohibited currently under Title 16. MR. BRUCE replied, "I don't believe the importation of non-native stocks is prohibited in statute. The sale of eggs is prohibited in statute. But I think we have procedures to allow non-native stocks into the state. For example, the oyster farming ... is using a non-native stock." He said as a general policy, ADF&G discouraged such importation and had grave concerns about it. "You can look all over the world and see the consequences of the importation of non-native stocks into a situation and then having that situation get out of control," he said. "So, when we do allow it, we do exercise great control." Number 1413 CHAIRMAN AUSTERMAN asked about the current perceived problem with pike that had been introduced into the state. MR. BRUCE responded, "There definitely is more than a perceived problem. There's no question that pike are a ferocious predator and have gotten into some waterways that we would very much like to get them out of." He added, "And that's a good example of the kind of thing that we would be very keen to prevent in the future." CHAIRMAN AUSTERMAN noted that he had just reread AS 16.41.30 and said, "it speaks to the importation of aquatic plants or shellfish. It doesn't speak to finfish. And 16.41.40 does talk about the limitations of transfers of stock by permit only." Number 1465 MR. BRUCE said, "Right. We do have a system where any transfer, native or non-native, has to receive a permit and be approved and go through a process of screening." CHAIRMAN AUSTERMAN responded, "So, if we wanted to exclude the importation of non-native stocks of finfish, then we need to address that in this bill somehow." MR. BRUCE said, "I believe so. I haven't researched that specific question, but to the best of my recollection, I don't think there is a specific prohibition in statute to that effect." He suggested he would like to research it before giving a final answer. Number 1497 REPRESENTATIVE ELDON MULDER asked Mr. Bruce if he envisioned ADF&G issuing a permit for importation of non-native stock. MR. BRUCE said, "Well, just because we have the situation with oysters, I can imagine a situation that would develop where you would. I think it would be unlikely." He suggested one reason for allowing oysters may have been that the water here was too cold for oysters to reproduce naturally. They would not proliferate out of control and affect the natural environment. "But that could be the case with some other species, as well," he added. He thought it would be more likely that Alaskans would look to native stocks for this kind of endeavor. REPRESENTATIVE MULDER said that was his point. He thought the problem was more perceived than real. "Certainly, the department is not going to allow or issue a permit for a non-native stock that's going to endanger a native wild stock," he said. Number 1574 REPRESENTATIVE DAVIS asked whether halibut bred in Alaska waters. MR. BRUCE replied, "Generally, we don't know a lot about what the halibut do," and deferred to James Cochran. JAMES O. COCHRAN, Mariculture Coordinator, Division of Commercial Fisheries Management and Development, Department of Fish and Game, indicated little was known about the natural spawning habits of halibut. He explained, "Halibut are deep-water spawners, probably mid-winter. They spawn offshore, as far as we know." Reports did suggest that halibut larvae were picked up in the open ocean in the spring. In addition, halibut could spawn in a hatchery environment, he said. Atlantic halibut had been spawned commercially, while Pacific halibut had been spawned experimentally. Number 1698 CHAIRMAN AUSTERMAN noted that the non-native stock issue had arisen several times and said it would be simple to add language to the bill to address that. Number 1730 REPRESENTATIVE MULDER said, "My only consideration about that limitation is when you're introducing it to a semi-wild environment, rivers, waterways, what have you, in terms of the farming, that there is an industry that is developing where the farming is actually done just in tanks, a secure environment, which doesn't pose a risk to the wild stocks at all." He suggested retaining flexibility for tank farming and added, "but beyond that, I haven't got a problem." CHAIRMAN AUSTERMAN said, "This statute, if we added finfish into it, the last part of it says, `unless authorized by a regulation of the Board of Fisheries', so the Board of Fisheries would have the option of going back through by regulations...." REPRESENTATIVE MULDER said, "It seems to me, through previous testimony, that the Board of Fish[eries] was not really desirous of having too large of a role in this process. They basically viewed themselves as an allocative body, as opposed to a policy body." He suggested regulation would be left up to ADF&G to provide security for wild stocks and yet allow the potential of tank farming. He asked Mr. Bruce if that was his interpretation. Number 1805 MR. BRUCE replied, "Certainly, I think the department would provide our best information about the risks and how to manage any risks that might be associated. But I think the policy call should be made by some entity other than the staff for the department, either the legislature or the board." REPRESENTATIVE MULDER concurred and added that he supported the legislature not trying to endanger wild stocks. "We have the policy ability here to just make the statement as long as it is not endangering wild stocks, that on a permit basis, the department could issue a permit if it was determined by the department it was not going to endanger a wild stock." He indicated he was not sure how that fit with the amendment being considered. Number 1882 CHAIRMAN AUSTERMAN stated he was thinking more about the pike situation and the need for protection if, for example, pike were to be farmed in a river system. REPRESENTATIVE MULDER said he was advocating the potential window of allowance for tank farming, if that would be economically viable. He offered to work with the committee on an amendment. MR. BRUCE indicated ADF&G would like to be included in working on that amendment. "We want to make sure the process is consistent," he said. "And for the existing fish transport permits, they are developed under regulations promulgated by the Board of Fisheries. And the way we read this statute, these would be promulgated under the commissioner's authority; and we just want to make sure that if we're not doing it the same way, there's a good reason to do it in a different way." CHAIRMAN AUSTERMAN said that would be fine. He indicated he, Representative Mulder and ADF&G would have something drafted up for the House Resources Committee, the bill's next committee of referral. Number 1964 JANICE ADAIR, Director, Division of Environmental Health, Department of Environmental Conservation (DEC), testified via teleconference from Anchorage. She referred to page 3, line 30, and said DEC recommended that subsection 10 be deleted. She referred to page 4, line 3, Section 3, which DEC also recommended be deleted. "The rationale here is that Section 10 deals with the national shellfish sanitation program," she said, "and that ... has no standards applicable to finfish farming." Instead, DEC recommended that a new subparagraph (c) be added to page 3, Section9, to read, "and for finfish farms, water quality". Ms. Adair explained that water quality was a concern the department would have in pen-rearing areas. She said in order to deal with the deletion of Section 3 on page 10, DEC recommended, on line 18, that finfish farm products be added to the definition of fish or fisheries products. "I think we get to the same place in a little big neater and cleaner fashion," she said. Ms. Adair specified she was working from version C of the bill, dated 3/11/96. CHAIRMAN AUSTERMAN asked her to go back over her recommendations. Number 2125 MS. ADAIR referred to subsection 10 on page 3, starting on line 30, and said DEC recommended deleting that paragraph in its entirety. On page 4, starting at line 3, Section 3, DEC recommended deleting that paragraph in its entirety. CHAIRMAN AUSTERMAN indicated that would omit Section 3 altogether. MS. ADAIR affirmed that. She referred to page 3, line 25, paragraph 9, and said 9 had two subparagraphs, (a) and (b); DEC recommended adding a subparagraph (c) that would read, "and for fish farms, water quality". She said that would mean the department would establish standards and conditions for the operation and siting of aquatic farms and related hatcheries and of finfish farms, including water quality. She referred to page 4, line 18, the definitions section for fish or fisheries products; DEC recommended that on line 18, after "parts of those plants", the words "finfish farm products" be added. "That way, they become what a fish or fisheries product is and subject to the same and special requirements," she said, indicating that would accomplish the intent of Section 3 that DEC had recommended deleting. CHAIRMAN AUSTERMAN asked Ms. Adair to fax her amendment recommendations. Number 2207 REPRESENTATIVE OGAN asked Ms. Adair why she recommended the deletion of the whole paragraph from the existing statute. MS. ADAIR clarified, "All I meant was to delete it from this bill. So, including finfish farms or finfish farm products, there on page3 in subparagraph 10, that doesn't make any sense because that section deals with the national shellfish sanitation program and only shellfish. It has no bearing on finfish. So, that amendment need not be made to that section. And the same on page 4, Section3; I mean only to delete this from this bill, which would simply delete the amendment that was being proposed. The amendment that we're suggesting for the definition of fish or fisheries products gets us to the same place." CHAIRMAN AUSTERMAN asked if there were any problems with those amendments or further suggestions. REPRESENTATIVE MULDER replied, "I have no problem if you would adopt a conceptual amendment to include that language." REPRESENTATIVE OGAN said, "So moved." There being no objection, it was so ordered. CHAIRMAN AUSTERMAN, noting that the conceptual amendment had been adopted, indicated it would be put in writing and added to the bill before being passed on to the next committee. Number 2326 REPRESENTATIVE DAVIS expressed appreciation that Chairman Austerman would carry concerns over non-native species to the House Resources Committee, as it was a valid concern that was not specified in the referenced statutes. He noted that the sponsor agreed. Number 2340 REPRESENTATIVE DAVIS moved that the committee adopt work draft F, dated 3/14/96. There being no objection, it was so ordered. Representative Davis then moved that the committee adopt the conceptual amendments offered by DEC to the work draft copy. There being no objection, it was so ordered. CHAIRMAN AUSTERMAN noted that work draft F, as amended, was before the committee. REPRESENTATIVE DAVIS moved that CSHB 514(FSH) move from committee with the conceptual amendment, attached fiscal notes and individual recommendations. There being no objection, it moved from committee. ADJOURNMENT There being no further business to conduct, CHAIRMAN AUSTERMAN adjourned the House Special Committee on Fisheries meeting at 5:48p.m.