Legislature(1995 - 1996)

03/18/1996 05:03 PM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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                  
 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            
 REPRESENTATIVE DAVIS indicated he thought that was the intent of              
 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                          
 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                   
 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                       
 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                     
 There being no further business to conduct, CHAIRMAN AUSTERMAN                
 adjourned the House Special Committee on Fisheries meeting at                 

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