Legislature(2005 - 2006)CAPITOL 124

03/18/2005 08:30 AM FISHERIES

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08:34:37 AM Start
08:35:08 AM HB198
09:06:20 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 198(FSH) Out of Committee
Bills Previously Heard/Scheduled
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                         March 18, 2005                                                                                         
                           8:34 a.m.                                                                                            
MEMBERS PRESENT                                                                                                               
Representative Bill Thomas, Co-Chair                                                                                            
Representative Jim Elkins                                                                                                       
Representative Peggy Wilson                                                                                                     
Representative Mary Kapsner                                                                                                     
Representative John Harris                                                                                                      
MEMBERS ABSENT                                                                                                                
Representative Gabrielle LeDoux, Co-Chair                                                                                     
Representative Woodie Salmon                                                                                                    
COMMITTEE CALENDAR                                                                                                            
HOUSE BILL NO. 198                                                                                                              
"An Act relating to aquatic farming; and providing for an                                                                       
effective date."                                                                                                                
     - MOVED CSHB 198(FSH) OUT OF COMMITTEE                                                                                     
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 198                                                                                                                  
SHORT TITLE: AQUATIC FARMING                                                                                                    
SPONSOR(S): REPRESENTATIVE(S) ELKINS                                                                                            
03/04/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
03/04/05       (H)       FSH, RES                                                                                               
03/18/05       (H)       FSH AT 8:30 AM CAPITOL 124                                                                             
WITNESS REGISTER                                                                                                              
JOS GOVARS, Staff                                                                                                               
to Representative Jim Elkins                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented HB 198 on behalf of Representative                                                                
Elkins, sponsor.                                                                                                                
PAUL FUHS, Lobbyist                                                                                                             
for PAC Alaska, LLC.                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 198.                                                                             
STEVE LACROIX                                                                                                                   
PAC Alaska, LLC.                                                                                                                
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Commented on HB 198.                                                                                        
JULIE DECKER, Executive Director                                                                                                
Southeast Alaska Regional Dive Fisheries Association (SARDFA)                                                                   
Wrangell, Alaska                                                                                                                
POSITION STATEMENT: Testified in support of HB 198.                                                                             
JOHN MALOUF, President                                                                                                          
Southeast Alaska Regional Dive Fisheries Association (SARDFA)                                                                   
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Testified in support of HB 198.                                                                             
DAVID BEDFORD, Deputy Commissioner                                                                                              
Office of the Commissioner                                                                                                      
Alaska Department of Fish & Game (ADF&G)                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 198 and answered                                                                 
questions regarding the bill.                                                                                                   
BOB HARTLEY, President                                                                                                          
Alaskan Shellfish Growers Association (ASGA)                                                                                    
(No address provided)                                                                                                           
POSITION STATEMENT: Testified in support of HB 198.                                                                             
ROGER PAINTER, Vice President                                                                                                   
Alaskan Shellfish Growers Association (ASGA)                                                                                    
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 198.                                                                             
ACTION NARRATIVE                                                                                                              
CO-CHAIR  BILL  THOMAS  called the  House  Special  Committee  on                                                             
Fisheries  meeting  to  order at  8:34:37  AM.    Representatives                                                             
Elkins, Kapsner, Thomas,  and Wilson were present at  the call to                                                               
order.   Representative  Harris  arrived as  the  meeting was  in                                                               
HB 198-AQUATIC FARMING                                                                                                        
8:35:08 AM                                                                                                                    
CO-CHAIR THOMAS announced  that the only order  of business would                                                               
be HOUSE BILL  NO. 198, "An Act relating to  aquatic farming; and                                                               
providing for an effective date."                                                                                               
8:35:14 AM                                                                                                                    
JOS  GOVARS,   Staff  to  Representative  Elkins,   Alaska  State                                                               
Legislature,  presented  HB  198   on  behalf  of  Representative                                                               
Elkins,  sponsor.   He explained  that the  bill would  amend the                                                               
state's Aquatic  Farming Act to  allow aquatic farms  to continue                                                               
to operate  in compliance with  a recent supreme  court decision.                                                               
He stated:                                                                                                                      
     In mid-April,  the state supreme  court ruled  that the                                                                    
     act  requires the  [Alaska Department  of  Fish &  Game                                                                    
     (ADF&G)] to deny shellfish  farmers exclusive rights to                                                                    
     significant  populations  of  wild  geoducks  on  their                                                                    
     proposed farm sites.  Since  then, the Southeast Alaska                                                                    
     Regional  Dive Fisheries  Association (SARDFA)  and the                                                                    
     Alaskan  Shellfish   Growers  Association   (ASGA)  and                                                                    
     [ADF&G] have  negotiated an agreement that  would allow                                                                    
     these  farmers to  harvest "insignificant"  populations                                                                    
     of  standing  stocks  of  geoducks.   In  order  to  be                                                                    
     implemented, this  agreement would require a  change in                                                                    
     statute.    Section 1  of  HB  198 amends  the  Aquatic                                                                    
     Farming Act  to allow shellfish owners  to own, harvest                                                                    
     and sell "insignificant  populations" of wild shellfish                                                                    
     stocks on their aquatic farm sites.                                                                                        
MR. GOVARS continued:                                                                                                           
     On  February 11,  2005, the  [ADF&G] announced  that it                                                                    
     will  conduct   a  commercial   dive  fishery   on  the                                                                    
     designated    mariculture   sites    to   remove    the                                                                    
     commercially significant  populations of  wild geoducks                                                                    
     from these  areas.   This fishery will  be open  to all                                                                    
     commercial divers  in Southeast  Alaska.  Section  2 of                                                                    
     HB 198 makes  it clear that the aquatic  farmers do not                                                                    
     have  to replace  the shellfish  that are  harvested in                                                                    
     this  common property  fishery.   Section  3 gives  the                                                                    
     [ADF&G] the  authority, when it determines  it would be                                                                    
     beneficial  to  do so,  to  let  the shellfish  farmers                                                                    
     remove all  but an  "insignificant population"  of wild                                                                    
     stock  from   their  sites  themselves  and   give  the                                                                    
     proceeds  of their  sale  to the  [ADF&G}.   Section  4                                                                    
     codifies the  requirement that proposed farm  sites can                                                                    
     only  get   permits  if  there  is   an  "insignificant                                                                    
     population" of shellfish species to be cultured there,                                                                     
      and Section 7 says that this section applies only to                                                                      
     permits issued after July 1, 2005.                                                                                         
8:37:14 AM                                                                                                                    
REPRESENTATIVE    KAPSNER   asked    Mr.    Govars   to    define                                                               
MR. GOVARS  responded that SARDFA  and ASGA reached  an agreement                                                               
defining "insignificant"  as less than 12,000  pounds [of geoduck                                                               
clams per farm site].                                                                                                           
8:37:54 AM                                                                                                                    
PAUL  FUHS, Lobbyist  for PAC  Alaska, LLC.,  commented that  PAC                                                               
Alaska supported HB 198.  He  asked the committee to clarify with                                                               
ADF&G that  a "significant  amount" should  be defined  as 12,000                                                               
pounds or more.   He also expressed concern that  line 14 on page                                                               
2  could be  interpreted to  mean that  the bill  would authorize                                                               
ADF&G  to hold  a commercial  fishery on  top of  a planted  farm                                                               
site.   He said, "If [ADF&G]  would put that on  the record, that                                                               
this language  does not  mean that they  could hold  a commercial                                                               
fishery  on  the site  after  it's  been  planted, then  we'd  be                                                               
satisfied with this language."                                                                                                  
8:40:28 AM                                                                                                                    
MR. FUHS asked  that the committee also clarify  with ADF&G lines                                                               
5-7 on  page 3 regarding the  amount of wild stock  on a proposed                                                               
farm site.   He  said, "We  want to make  sure that  they clarify                                                               
that that  means on the site,  not in the general  area.  Because                                                               
if  it's in  the  general area,  there's no  way  that you  could                                                               
actually determine it.  ... It shouldn't be the  general area; it                                                               
should be on the farm site."                                                                                                    
REPRESENTATIVE  KAPSNER  asked Mr.  Fuhs  if  he would  like  the                                                               
language in the bill cleared up.                                                                                                
MR. FUHS replied that he would like  to see the bill move, and if                                                               
the ADF&G  would state their  intent clearly, then that  would be                                                               
STEVE LACROIX,  PAC Alaska, LLC.,  pointed out that  the language                                                               
in  the  bill  says,  "on   the  farm  site,"  but  the  proposed                                                               
regulation reads  differently.  He  said, "As long as  it's clear                                                               
that we're going by the guidance of the statute, then we                                                                        
shouldn't have a problem."                                                                                                      
REPRESENTATIVE WILSON noted that the sentence already includes                                                                  
the word "site" twice.                                                                                                          
MR. LACROIX said that he just wanted to be sure.                                                                                
8:43:14 AM                                                                                                                    
REPRESENTATIVE WILSON moved to adopt Amendment 1, which would                                                                   
change lines 5-7 on page 3 to read:                                                                                             
     the proposed  farm site  may not  include more  than an                                                                    
     insignificant population of a  wild stock, on the site,                                                                    
     of a shellfish  species intended to be  cultured on the                                                                    
REPRESENTATIVE KAPSNER made a friendly objection and commented                                                                  
that the language was not grammatically correct.                                                                                
8:45:39 AM                                                                                                                    
REPRESENTATIVE WILSON amended Amendment 1 to read:                                                                              
      the proposed farm site may not include more than an                                                                       
     insignificant population of a wild stock, on the site,                                                                     
     of a shellfish species intended to be cultured                                                                             
REPRESENTATIVE KAPSNER withdrew her objection.                                                                                  
REPRESENTATIVE HARRIS objected for discussion purposes.                                                                         
REPRESENTATIVE WILSON explained that the amendment is to clarify                                                                
the language.                                                                                                                   
REPRESENTATIVE HARRIS withdrew his objection.                                                                                   
There being no objection, Amendment 1 was adopted.                                                                              
8:47:20 AM                                                                                                                    
JULIE DECKER, Executive Director, Southeast Alaska Regional Dive                                                                
Fisheries Association (SARDFA), testified in favor of HB 198.                                                                   
8:48:14 AM                                                                                                                    
JOHN MALOUF, President, Southeast  Alaska Regional Dive Fisheries                                                               
Association  (SARDFA),  testified  in  favor   of  HB  198.    He                                                               
commented, "I  think this  bill [has]  good intentions  to spread                                                               
the   wild  stocks   between  the   fisheries   and  leave   some                                                               
'insignificant' stocks  ... for the  farmers....  As the  bill is                                                               
now,  it makes  sure that  there [are]  no net  proceeds for  the                                                               
8:50:00 AM                                                                                                                    
DAVID BEDFORD,  Deputy Commissioner, Office of  the Commissioner,                                                               
Alaska Department  of Fish &  Game (ADF&G), testified  in support                                                               
of HB 198.  He stated:                                                                                                          
     The  mariculture industry  has  great promise,  however                                                                    
     it's been stymied over the  past several years, both by                                                                    
     inattention under  the prior  administration and  by an                                                                    
     ongoing string of litigation over  what sorts of rights                                                                    
     or  opportunities  farmers  ought to  have  to  harvest                                                                    
     common  property resource.   The  legislation that  you                                                                    
     have  in front  of you  is designed  to remove  some of                                                                    
     these barriers.   In particular, the  superior court in                                                                    
     the  State of  Alaska ruled  that we  are obligated  to                                                                    
     provide access  for farmers to insignificant  stocks of                                                                    
     property  geoducks.   The  supreme  court however  said                                                                    
     that the  statute prevents us  from so doing.   So this                                                                    
     legislation would then give us that authority.                                                                             
MR. BEDFORD continued:                                                                                                          
     Farm sites fall into two  basic general classes at this                                                                    
     point.  First off, we  have farm sites in which there's                                                                    
     been no substantial farming activity.  ... Section 1 of                                                                    
     [HB 198] ... would put us  in a position where we could                                                                    
     authorize farmers  to take possession  of insignificant                                                                    
     stocks of geoducks for purposes  of sale.  However,  at                                                                    
     this  particular  point  on farm  sites  that  have  no                                                                    
     substantial activity on those  sites, we are conducting                                                                    
     fisheries  in order  to make  sure  that the  remaining                                                                    
     stock of  geoducks on those  sites is  an insignificant                                                                    
     amount  so  that we  can  then  transfer those  to  the                                                                    
     farmers and  allow them to  move on to the  business of                                                                    
     cultivating.  The second class  of farm sites are those                                                                    
     in  which   there's  been   a  significant   amount  of                                                                    
     activity. ... In  Section 3, we create  a new authority                                                                    
     for the  commissioner that he does  not currently have,                                                                    
     which  would give  the  commissioner  the authority  to                                                                    
     authorize a  farmer to  harvest significant  amounts of                                                                    
     public resource  that's on  the farm  site in  order to                                                                    
     facilitate  the  aquatic  farming,  provided  that  the                                                                    
     farmer pays  reasonable compensation to the  public for                                                                    
     the harvest of the public  resource. ... We believe the                                                                    
     plain language  of the section  is that it  would allow                                                                    
     the  commissioner to  [authorize] exclusive  harvest by                                                                    
     the  farmer;  it  doesn't  have  anything  to  do  with                                                                    
     allowing a commercial fishery on site.                                                                                     
8:52:56 AM                                                                                                                    
MR. BEDFORD continued:                                                                                                          
     The  legislation  also  includes   a  couple  of  other                                                                    
     elements  that  we  think  are  quite  important.    In                                                                    
     Section  2,  it  would   modify  the  existing  aquatic                                                                    
     farming statutes  to prevent  what could be  a manifest                                                                    
     injustice, in  our opinion.   The statute  as currently                                                                    
     written  would require  a  farmer, at  the  end of  his                                                                    
     tenure,  to  replace  the  level  of  wild  stock  that                                                                    
     existed on  the farm site  at the time he  received the                                                                    
     lease.   In  the  instances we  have  now, where  we're                                                                    
     conducting  a  commercial  fishery on  some  sites,  it                                                                    
     would require the farmer to  replace the stock that was                                                                    
     removed by the commercial fishery.   We are strongly in                                                                    
     support  of Section  2 because  it  would prevent  that                                                                    
     outcome....   Section  5 is  also quite  important from                                                                    
     our perspective  because it extends to  aquatic farmers                                                                    
     the kind  of confidentiality that  commercial fishermen                                                                    
     currently have  for access  to their  personal business                                                                    
     records. ... It does  maintain one exception that would                                                                    
     allow  the  public  access  to  information  on  annual                                                                    
     harvest of common property resource from a farm.                                                                           
8:54:34 AM                                                                                                                    
MR. BEDFORD stated that ADF&G agrees that "insignificant" be                                                                    
defined as 12,000 pounds.  However, he noted:                                                                                   
     The  second  element  of what  is  significant  is  the                                                                    
     density of the stock on  a particular location, and how                                                                    
     close  it is  to an  existing commercial  fishery.   So                                                                    
     part of  ... the  regulatory process  that we  would go                                                                    
     through would  be 12,000  pounds, but  ... also,  if it                                                                    
     was  right next  door,  right on  top  of a  commercial                                                                    
     fishery, then the question would  be, "Is there a dense                                                                    
     stock  as well?    Are  the geoducks  on  the site  ...                                                                    
     available for harvest to a commercial fishery?"                                                                            
MR. BEDFORD continued, "On the  question of whether 12,000 pounds                                                               
would apply  to a site as  opposed to a general  area: we're fine                                                               
with that if SARDFA and ASGA are good with that."                                                                               
8:55:37 AM                                                                                                                    
REPRESENTATIVE WILSON  remarked that,  although the rate  of levy                                                               
is not in the bill, she  wanted ADF&G to state its intentions for                                                               
the  record so  that there  is  no misunderstanding  later.   She                                                               
turned  attention  to  the  letter of  support  from  SARDFA  and                                                               
referred to the following statement on page 3:                                                                                  
     The most important concept  to remember when discussing                                                                    
     the rate of  levy is that a higher rate  will give less                                                                    
     incentive to farmers to poach geoducks.                                                                                    
REPRESENTATIVE WILSON commented,  "I just want to  make sure that                                                               
everybody understands  what the  [ADF&G] is going  to do  to make                                                               
sure  that  [there is  no  poaching],  because  we have  to  also                                                               
protect the rights of the common good for everybody else.                                                                       
8:57:27 AM                                                                                                                    
MR. BEDFORD replied:                                                                                                            
     Part of that is a  problem with enforcement if somebody                                                                    
     is  harvesting  outside of  an  area  in which  they're                                                                    
     entitled to  do so.   We will  go through  a regulatory                                                                    
     process as soon as this  legislation is enacted so that                                                                    
     we can put  in place the kinds of  regulations that are                                                                    
     necessary to permit harvest by  farmers of shellfish on                                                                    
     their sites and then also to monitor those harvests.                                                                       
MR.  BEDFORD   explained  that  ADF&G   will  have   a  reporting                                                               
requirement for  farmers to  report their  harvest on  an ongoing                                                               
8:58:33 AM                                                                                                                    
CO-CHAIR  THOMAS   commented  that   there  are   no  enforcement                                                               
penalties  in the  bill,  and he  asked if  the  ADF&G would  add                                                               
penalties to the regulations.                                                                                                   
MR.  BEDFORD   replied  that  ADF&G  could   place  penalties  in                                                               
regulations if it  was the will of the legislature,  but he noted                                                               
that there are  already criminal penalties in place  for taking a                                                               
resource without the authority to do so.                                                                                        
8:59:18 AM                                                                                                                    
REPRESENTATIVE WILSON  asked if  the levy would  be based  on the                                                               
ex-vessel value,  and if so,  would the  rate be "high  enough to                                                               
make sure that they reflect the differences between the values?"                                                                
MR. BEDFORD responded that ADF&G  hasn't settled on anything yet,                                                               
but is considering  a rate of levy of 50  percent for stocks that                                                               
are  sold  live,  and  30   percent  for  stocks  that  are  sold                                                               
processed.  He  commented that ADF&G would  take additional input                                                               
during the regulatory process before it  settled on a number.  He                                                               
noted, "We're  in a  situation here  in which  we have  to assure                                                               
that  the public  receives  adequate  compensation for  exclusive                                                               
harvest of a public resource."                                                                                                  
9:00:24 AM                                                                                                                    
REPRESENTATIVE WILSON reiterated the  importance of assuring that                                                               
the public gets its fair share.                                                                                                 
REPRESENTATIVE ELKINS  turned to  page 2, line  14, and  asked if                                                               
this language would allow the  ADF&G to hold a commercial fishery                                                               
over a planned farm site.                                                                                                       
MR. BEDFORD replied that it would not and he said:                                                                              
     The  authority to  hold a  commercial fishery  is found                                                                    
     elsewhere  in  the  Alaska statutes.    This  ...  only                                                                    
     allows  us to  do something  which currently  we cannot                                                                    
     do,  which is  to  allow one  particular individual  to                                                                    
     have exclusive  access to  a common  property resource.                                                                    
     In  this  case, the  farmer  could  be given  exclusive                                                                    
     access to  a significant  amount of geoducks  that were                                                                    
     on his farm site.                                                                                                          
9:01:43 AM                                                                                                                    
BOB  HARTLEY, President,  Alaskan  Shellfish Growers  Association                                                               
(ASGA) testified in support of HB 198.  He stated:                                                                              
     The  only  thing that  I  ask  is  that  we do  have  a                                                                    
     clarification of  the 12,000  pounds, making  sure that                                                                    
     it  is  on the  farm  site,  and  that the  harvest  of                                                                    
     significant animals  after the  public harvest  and the                                                                    
     levy of  a tax  ... [does not  exceed] the  30 percent.                                                                    
     The 50  percent seems  to be quite  a bit,  and whether                                                                    
     that  tax is  levied on  the gross  or the  net of  the                                                                    
     harvest  is  another  question that  we  need  to  have                                                                    
     clarified. ... But in general  it's a good agreement; I                                                                    
     think it  will help the  diver fishery and  the farming                                                                    
     industry, and allow for the  conduct of a good business                                                                    
     in the area.                                                                                                               
9:03:30 AM                                                                                                                    
ROGER   PAINTER,  Vice   President,  Alaskan   Shellfish  Growers                                                               
Association (ASGA) commented:                                                                                                   
     I'm  glad to  hear the  [ADF&G] clarified  the [12,000]                                                                    
     pounds being on the farm  site, because under the draft                                                                    
     regulations that  had been developed, the  survey would                                                                    
     have encompassed  an area  that's probably  10-12 times                                                                    
     the farmed  side.  And  that's where the  12,000 pounds                                                                    
     would  have been  determined. ...  One  of the  primary                                                                    
     concerns that  the farmers have about  these commercial                                                                    
     fisheries is getting assurances  from [ADF&G] that once                                                                    
     they're completed,  they can go ahead  with the farming                                                                    
     activities  without  worry   of  subsequent  commercial                                                                    
     fisheries coming  on the site.   The hatchery currently                                                                    
     is holding  up to a  million geoduck seed; this  is the                                                                    
     first seed  that's been available  for farmers,  and it                                                                    
     needs to be moved out of  the hatchery right away.  And                                                                    
     if there's  any uncertainty,  the farmers are  going to                                                                    
     be very hesitant to proceed with plantings.                                                                                
MR. PAINTER noted that the  enforcement concerns on aquatic farms                                                               
are  no different  than those  of the  commercial fisheries.   He                                                               
commented  that   there  is  a  limited   amount  of  enforcement                                                               
9:06:05 AM                                                                                                                    
REPRESENTATIVE HARRIS  moved to report  HB 198 as amended  out of                                                               
committee  with individual  recommendations and  the accompanying                                                               
zero fiscal  note.  There  being no objection, CSHB  198(FSH) was                                                               
reported from the House Special Committee on Fisheries.                                                                         
There being no further business before the committee, the House                                                                 
Special Committee on Fisheries meeting was adjourned at 9:06:20                                                               

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