03/06/2002 01:14 PM House RES
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+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
March 6, 2002
1:14 p.m.
MEMBERS PRESENT
Representative Drew Scalzi, Co-Chair
Representative Hugh Fate, Vice Chair
Representative Joe Green
Representative Lesil McGuire
Representative Gary Stevens
Representative Mary Kapsner
MEMBERS ABSENT
Representative Beverly Masek, Co-Chair
Representative Mike Chenault
Representative Beth Kerttula
COMMITTEE CALENDAR
HOUSE BILL NO. 390
"An Act extending the termination dates of certain activities
and salmon marketing programs of the Alaska Seafood Marketing
Institute and of the salmon marketing tax; expanding the
allowable use of that tax for the salmon marketing programs of
the Alaska Seafood Marketing Institute; relating to the Alaska
Seafood Marketing Institute's salmon marketing committee; and
providing for an effective date."
- MOVED HB 390 OUT OF COMMITTEE
HOUSE BILL NO. 287
"An Act relating to the exemption of commercial fishing entry
permits from claims of creditors, to loans to satisfy past due
federal tax obligations of commercial fishing entry permit
holders, and to loan origination charges for loans made by the
commercial fishing loan program to refinance a debt obligation;
and providing for an effective date."
- MOVED CSHB 287(FSH) OUT OF COMMITTEE
HOUSE BILL NO. 208
"An Act relating to aquatic farming of shellfish; and providing
for an effective date."
- MOVED CSHB 208(RES) OUT OF COMMITTEE
HOUSE BILL NO. 503
"An Act relating to evaluating state assumption of the
wastewater discharge program under the federal Clean Water Act;
and providing for an effective date."
- SCHEDULED BUT NOT HEARD
PREVIOUS ACTION
BILL: HB 390
SHORT TITLE:ASMI SALMON MARKETING &MARKTNG TAX
SPONSOR(S): REPRESENTATIVE(S)MCGUIRE
Jrn-Date Jrn-Page Action
02/08/02 2181 (H) READ THE FIRST TIME -
REFERRALS
02/08/02 2181 (H) FSH, RES
02/25/02 (H) FSH AT 3:30 PM CAPITOL 124
02/25/02 (H) Moved Out of Committee
02/25/02 (H) MINUTE(FSH)
02/27/02 2405 (H) FSH RPT 6DP
02/27/02 2405 (H) DP: DYSON, COGHILL, SCALZI,
KERTTULA,
02/27/02 2405 (H) WILSON, STEVENS
02/27/02 2405 (H) FN1: (CED)
02/27/02 2418 (H) COSPONSOR(S): KERTTULA
03/01/02 2444 (H) FIN REFERRAL ADDED AFTER RES
03/06/02 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 287
SHORT TITLE:EXEMPT ENTRY PERMITS FROM CREDITOR CLAIMS
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
01/04/02 1950 (H) PREFILE RELEASED 1/4/02
01/14/02 1950 (H) READ THE FIRST TIME -
REFERRALS
01/14/02 1950 (H) FSH, RES, FIN
01/18/02 2014 (H) COSPONSOR(S): HUDSON
01/30/02 2101 (H) COSPONSOR(S): FATE
03/04/02 (H) FSH AT 3:30 PM CAPITOL 124
03/04/02 (H) Moved CSHB 287(FSH) Out of
Committee
03/04/02 (H) MINUTE(FSH)
03/06/02 2484 (H) FSH RPT CS(FSH) NT 3DP 2AM
03/06/02 2484 (H) DP: SCALZI, KAPSNER, STEVENS;
03/06/02 2484 (H) AM: COGHILL, KERTTULA
03/06/02 2485 (H) FN1: ZERO(DFG)
03/06/02 2485 (H) FN2: (CED)
03/06/02 (H) RES AT 1:00 PM CAPITOL 124
BILL: HB 208
SHORT TITLE:AQUATIC FARMS FOR SHELLFISH
SPONSOR(S): REPRESENTATIVE(S)SCALZI
Jrn-Date Jrn-Page Action
03/23/01 0705 (H) READ THE FIRST TIME -
REFERRALS
03/23/01 0705 (H) FSH, RES, FIN
03/04/02 (H) FSH AT 3:30 PM CAPITOL 124
03/04/02 (H) Moved CSHB 208(FSH) Out of
Committee
03/04/02 (H) MINUTE(FSH)
03/06/02 2484 (H) FSH RPT CS(FSH) 2DP 3AM
03/06/02 2484 (H) DP: SCALZI, STEVENS; AM:
COGHILL;
03/06/02 2484 (H) KERTTULA, KAPSNER
03/06/02 2484 (H) FN1: ZERO(DEC)
03/06/02 2484 (H) FN2: (DNR)
03/06/02 2496 (H) COSPONSOR(S): MCGUIRE
03/06/02 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
SUE ASPELUND, Executive Director
Cordova District Fisherman United (CDFU)
P.O. Box 939
Cordova, Alaska 99574
POSITION STATEMENT: Testified in support of HB 390 on behalf of
CDFU and, as Bristol Bay fishermen, on behalf of herself and her
daughter; testified in support of HB 287 on behalf of CDFU.
RODGER PAINTER, Shellfish Farmer
P.O. Box 20704
Juneau, Alaska 99802
POSITION STATEMENT: Testified in support of HB 390 and HB 208.
BARBARA BELKNAP, Executive Director
Alaska Seafood Marketing Institute (ASMI)
Department of Community & Economic Development
311 North Franklin, Suite 200
Juneau Alaska 99801-1147
POSITION STATEMENT: Testified on behalf of ASMI in favor of HB
390.
KATHY HANSEN, Executive Director
Southeast Alaska Fishermen's Alliance
9369 North Douglas Highway
Juneau, Alaska 99801
POSITION STATEMENT: Testified in support of HB 390.
GERALD (JERRY) McCUNE, Lobbyist
for United Fishermen of Alaska (UFA)
211 Fourth Street, Suite 110
Juneau, Alaska 998901
POSITION STATEMENT: Testified in support of HB 390.
ROBIN SAMUELSEN
Bristol Bay Economic Development Corporation (BBEDC)
P.O. Box 412
Dillingham, Alaska 99576
POSITION STATEMENT: Testified in support of HB 390.
BRUCE HENDRICKSON, Commercial Fisherman
P.O. Box 1439
Homer, Alaska 99603
POSITION STATEMENT: Testified with regard to his proposed
amendment to HB 287.
GREG WINEGAR, Director
Division of Investments
Department of Community & Economic Development
P.O. Box 34159
Juneau Alaska 99803-4159
POSITION STATEMENT: Answered specific questions regarding HB
287 on behalf of the department.
CHERYL SUTTON
P.O. Box 39214
Ninilchik, Alaska 99369
POSITION STATEMENT: Testified in support of HB 287.
STEPHEN LaCROIX, Aquatic Farm Applicant
P.O. Box 5868
Ketchikan, Alaska 99901
POSITION STATEMENT: Testified in support of HB 208 and reminded
the committee that leases had been extended to ten years.
BOB LOEFFLER, Director
Division of Mining, Land and Water
Department of Natural Resources
550 West 7th Avenue, Suite 1070
Anchorage, Alaska 99501-3579
POSITION STATEMENT: Gave the department's support to HB 208 and
answered questions.
ROBERT HARTLEY
Alaska Shellfish Growers Association (ASGA)
P.O. Box 2284
Homer, Alaska 99603
POSITION STATEMENT: Testified in support of HB 208 and
indicated it would solve many problems for shellfish farmers.
DOUG MECUM, Director
Division of Commercial Fisheries
Alaska Department of Fish & Game (ADF&G)
P.O. Box 25526
Juneau Alaska 99802-5526
POSITION STATEMENT: Testified in support of HB 208 on behalf of
the department.
ACTION NARRATIVE
TAPE 02-15, SIDE A
Number 0001
CO-CHAIR DREW SCALZI called the House Resources Standing
Committee meeting to order at 1:14 p.m. Representatives Scalzi,
Fate, McGuire, Green, and Stevens were present at the call to
order. Representative Kapsner arrived as the meeting was in
progress.
HB 390-ASMI SALMON MARKETING
CO-CHAIR SCALZI announced that the first order of business would
be HOUSE BILL NO. 390, "An Act extending the termination dates
of certain activities and salmon marketing programs of the
Alaska Seafood Marketing Institute and of the salmon marketing
tax; expanding the allowable use of that tax for the salmon
marketing programs of the Alaska Seafood Marketing Institute;
relating to the Alaska Seafood Marketing Institute's salmon
marketing committee; and providing for an effective date."
[There was a motion to adopt HB 390 as the working document, but
it was already before the committee.]
Number 0120
REPRESENTATIVE McGUIRE, speaking as the sponsor, explained that
HB 390 simply extends the sunset date for five years so the
Alaska Seafood Marketing Institute (ASMI) can carry on its
business. Representative McGuire commented, "They've certainly
done a good job, I think, of looking to the people who are going
to benefit from it the most, expecting from them a reasonable
tax and then using that tax to ... market our seafood and bring
dollars back to the State of Alaska."
REPRESENTATIVE McGUIRE pointed out that the bill contains one
substantive change. She'd chosen to remove the domestic salmon
marketing language in order to allow ASMI flexibility to choose
to market its seafood as it sees fit. She explained that she
believes ASMI shouldn't be given a tool that is then
micromanaged. She said ASMI, with its board, is capable of
making decisions in response to the various marketing demands.
REPRESENTATIVE McGUIRE informed the committee that in
discussions with Barbara Belknap of ASMI, she'd understood that
ASMI doesn't intend to simply shift "all those dollars" away
from domestic marketing. Furthermore, ASMI believes [the
domestic market] is an important part of the market. However,
this flexibility may be utilized in reaching out to the
international markets. Representative McGuire noted that the
committee packet should include letters of support.
Number 0468
SUE ASPELUND, Executive Director, Cordova District Fisherman
United (CDFU), testified via teleconference. Ms. Aspelund
informed the committee that CDFU has been involved with the
successful promotion of Copper River salmon and thus feels
qualified to comment on seafood marketing in Alaska.
MS. ASPELUND announced that CDFU fully supports the 1-percent
salmon assessment reauthorization this year. She emphasized
that passage this year is very important for project planning
and program stability. Furthermore, CDFU supports lifting the
domestic marketing restrictions, since it would provide ASMI the
flexibility to adapt to changing market conditions. For
example, had ASMI had this flexibility during the mad cow
disease outbreak, "we" would've been better poised to take
advantage of that potential market opportunity overseas.
Additionally, lifting the domestic marketing restrictions will
allow access to more matching dollars.
MS. ASPELUND turned to the concerns regarding decreasing the
domestic marketing program. She highlighted that [the fishing
industry] has enjoyed a $5-million boost in domestic marketing
through the "Northwest TAT (ph) grants." Currently, an
excellent domestic marketing program is in place, she said.
MS. ASPELUND testified briefly on behalf of herself and her
daughter, as Bristol Bay fishermen. Ms. Aspelund said she and
her daughter support reauthorization and lifting of the domestic
marketing authorization.
Number 0608
RODGER PAINTER, Shellfish Farmer, testified in support of HB
390. Mr. Painter informed the committee that he has been a
board member of ASMI for the past eight to ten years. Although
[HB 390 refers to] a tax on salmon harvesters, he stressed that
it's critical to ASMI. He related his belief that without the
1-percent tax, ASMI wouldn't have a viable program in the U.S.
marketplace. Mr. Painter also pointed out that ASMI does much
for the entire [fishing] industry. Although the dollars coming
in for salmon marketing are directed at the salmon program, he
said they create "tremendous coattails for the rest of us to
ride on." Mr. Painter urged the committee to support HB 390.
Number 0743
BARBARA BELKNAP, Executive Director, Alaska Seafood Marketing
Institute (ASMI), Department of Community & Economic Development
(DCED), explained that ASMI is supported by industry assessments
and federal grants. The salmon fishermen's 1 percent amounted
to $2 million for this fiscal year, and the .3-percent processor
tax on all seafood contributed $2.8 million. She explained that
in fiscal year 2000, the salmon tax constituted 51 percent of
ASMI's tax [receipts], whereas the processor tax constituted 40
percent. Next fiscal year, the portion from the processor tax
will rise to 61 percent, while the portion from the salmon tax
will decrease to 38 percent. Those figures illustrate the
decline in salmon prices.
MS. BELKNAP informed the committee that the ASMI Board of
Directors had voted to support the removal of the restriction on
the 1-percent [tax] for domestic marketing. Furthermore, the
Salmon Marketing Committee that oversees the 1-percent tax also
supported the removal of the domestic restriction as well as
allowing the ASMI Board of Directors to determine where those
funds are spent overall. She noted that the [Salmon Marketing
Committee] will continue to be present as a oversight committee.
Number 0873
REPRESENTATIVE STEVENS inquired as to the impact if [HB 390]
isn't [passed].
MS. BELKNAP answered that ASMI wouldn't be able to match grants.
Currently, ASMI is in the second year of a $5-million grant that
is a dollar-for-dollar match. That grant was spread over three
years in order that it could be matched with the 1-percent
dollars. Without the 1-percent tax, ASMI wouldn't be able to
try for other grants. Furthermore, there wouldn't really be a
viable program. She remarked that at a certain point, either
more money must be put in or the method of operation would have
to change.
Number 1008
KATHY HANSEN, Executive Director, Southeast Alaska Fishermen's
Alliance, testified in support of HB 390. She explained the
importance of passing the 1-percent tax this year so ASMI
doesn't get into the same crunch as the last time the 1-percent
ASMI tax was renewed. The last time, ASMI proceeded into the
summer without knowing that the 1-percent tax was renewed; thus
no planning could be done. She felt that a summer's worth of
promotion was lost.
MS. HANSEN also announced support for lifting the domestic
restriction. She emphasized that ASMI has had an incredible
ability to obtain matching funds. For instance, ASMI has
leveraged as much as $9-$12 per $1. [Through] the ability to
free up a small amount of domestic marketing and leverage it as
mentioned, the marketing ability is greatly increased, and it
benefits everyone.
Number 1120
GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska
(UFA), testified in support of HB 390. He expressed the
importance of getting HB 390 moving in order to make plans for
the future.
Number 1186
ROBIN SAMUELSEN, Bristol Bay Economic Development Corporation
(BBEDC), testified via teleconference in support of HB 390. He
related the belief that this assessment is necessary, especially
in light of salmon farming.
CO-CHAIR SCALZI closed public testimony on HB 390.
Number 1258
REPRESENTATIVE FATE moved to report HB 390 out of committee with
individual recommendations and the accompanying fiscal notes.
There being no objection, HB 390 was moved out of the House
Resources Standing Committee.
HB 287-EXEMPT ENTRY PERMITS FROM CREDITOR CLAIMS
Number 1287
CO-CHAIR SCALZI announced the next matter before the committee,
HOUSE BILL NO. 287, "An Act relating to the exemption of
commercial fishing entry permits from claims of creditors, to
loans to satisfy past due federal tax obligations of commercial
fishing entry permit holders, and to loan origination charges
for loans made by the commercial fishing loan program to
refinance a debt obligation; and providing for an effective
date."
Number 1339
[There was a motion to adopt CSHB 287(FSH), labeled 22-LS1106\L,
but it already was before the committee.]
CO-CHAIR SCALZI, speaking as sponsor of HB 287, characterized
the bill as a reauthorization of the state's current federal tax
loan program. Reauthorization would prevent the program from
being phased out by a "sunset" provision. Co-Chair Scalzi told
the committee that this would be the second reauthorization of
the program. It would allow up to $30,000 to be leveraged from
the state loan program for federal tax obligations. He pointed
out that the bill would eliminate the .5-percent loan fee that
goes along with the current program. He characterized the
process as streamlined and not expensive to the department. He
said the expense of the loss of the .5-percent fee would be
borne by the loan program itself, not the general fund.
CO-CHAIR SCALZI spoke to the problem of creditors trying to
place liens on entry permits. The bill makes clear the fact
that commercial fishing entry permits are not property, but
rather "user rights" allowed by the State of Alaska to help
manage the state's fisheries. He referred to page 8, Section 7,
and said it specifies [in AS 16.10.333 - 16.10.338, AS
16.43.170(g), AS 44.81.215, and AS 44.81.231 - 44.81.250] what
permits may be used to satisfy claims of creditors, including
the Division of [Investments]. Co-Chair Scalzi mentioned
[Section] 9 of the bill and stated his wish to have the
department address it.
Number 1570
ROBIN SAMUELSON, Bristol Bay Economic Development Corporation
(BBEDC), testified via teleconference. He characterized the
bill as very important to the people of Bristol Bay. He said
BBEDC has a Bristol Bay [entry] permit brokerage that deals with
permit financing problems; it dealt with 161 individuals who
were at risk of losing their permits in the previous year. He
said in the current year 361 people were in trouble; these
people are watershed residents. He said the bill would help to
protect the fishermen of his community and the state as a whole.
Number 1652
BRUCE HENDRICKSON, Commercial Fisherman, testified via
teleconference. He made reference to a letter he'd sent the
committee with a proposed amendment to HB 287. The amendment
would be to add a section to AS 16.10.333 that authorizes the
Division of Investments to "write down the value of permit loans
to the most recent value of the last two sales of the loan in
cases where the decline in value exceeds one-third of the value
of the loan." He asked the committee to keep their minds open
to his suggestions.
Number 1781
GREG WINEGAR, Director, Division of Investments, Department of
Community & Economic Development, testified before the
committee. He told the committee that the sunset of the tax
obligation program would be disenabled by the bill. The program
is not large in volume - the division has made about 300 loans
since the program's inception - but it is an important tool for
the division to work with individuals who are in difficulties
with the Internal Revenue Service (IRS).
MR. WINEGAR also addressed the removal of the .5-percent
origination fee for the refinancing program. The refinancing
program has been very popular on account of the low interest
rates in recent years. Mr. Winegar said the removal of the fee
would reduce the amount of money going into the fund but would
not injure the integrity of the fund, since it is very strong
and receives no general fund monies. If the bill is not signed
into law before the tax obligation sunsets, a provision in the
bill would remove the sunset provision.
Number 1898
CO-CHAIR SCALZI asked if the fact that much of the bill concerns
the expiration date was the reason for the bill's lengthiness.
MR. WINEGAR answered in the affirmative.
CO-CHAIR SCALZI brought up the refinancing fee and asked Mr.
Winegar what the department's opinion was with regard to it.
MR. WINEGAR characterized the department's process of dealing
with the refinancing of loans as "very streamlined." The
application is one page, and the department is processed
internally. He said the process would not cause any
difficulties.
CO-CHAIR SCALZI asked rhetorically if the .5-percent savings on
refinancing would be a help to fishermen in the current times of
low prices for fish and permits.
MR. WINEGAR said that was correct.
CO-CHAIR SCALZI raised the "once in a lifetime" provision that
would provide loans for federal tax relief. He referred to the
discussion in the House Special Committee on Fisheries about
whether or not people would seek this tax relief every year. He
said that was not the intent of the bill. He asked Mr. Winegar
to expand on what result the department envisioned from changing
from a once-in-a-lifetime opportunity to one available once a
year.
Number 2025
MR. WINEGAR told the committee this change was to provide the
department the flexibility to help people more than once. He
expressed his belief that people would not abuse the program by
getting the loan every year because it is a loan [that must be
repaid], and the department would treat it as such when
reviewing collateral, repayment, and debt service.
Number 2072
REPRESENTATIVE STEVENS pointed out that the only reason to
obtain loans every year would be a reduction in interest rates.
MR. WINEGAR said currently there is no restriction to the
refinancing program. The restriction comes into play for the
tax obligation program. Under the bill, the program would be
able to assist fishermen with tax relief multiple times, instead
of just once.
Number 2133
REPRESENTATIVE FATE asked what the process is for reviewing loan
applications, especially for second and third loans.
MR. WINEGAR answered that the loans would be treated like any
other loans. Applicants would fill out a complete application.
The division would look at credit and collateral, among other
things.
REPRESENTATIVE FATE asked if the loans would be reviewed within
the department.
MR. WINEGAR answered in the affirmative.
REPRESENTATIVE KAPSNER said she thought it was a great bill
because it protected the market for permits by precluding the
IRS from seizing and selling permits at very low levels. The
state is able to keep the permit market healthy with the bill.
Number 2249
SUE ASPELUND, Cordova District Fishermen United (CDFU),
testified via teleconference. She characterized HB 287 as
another "important tool in the box" for fishermen to utilize
during the current downturn in the industry. She called the
bill a "buffer" during a difficult time. She said the help may
not be large in terms of dollars, but might mean the difference
between being able to work or not. She gave CDFU's support to
the bill.
Number 2308
KATHY HANSEN, Executive Director, Southeast Alaska Fishermen's
Alliance, gave her group's support to the bill and characterized
it as "a tool that we need in order to function."
Number 2340
MARY McDOWELL, Commissioner, Commercial Fisheries Entry
Commission (CFEC), Alaska Department of Fish and Game (ADF&G),
testified before the committee. She said Sections 1, 5, 6, and
7 would clarify and firm up the legal status of limited entry
permits under state law. She announced that the State of Alaska
has always maintained that limited entry permits are not
property and are not to be seized by creditors. In the current
Limited Entry Act - AS 16.43.150(e) - "An entry permit
constitutes a use privilege that may be modified or revoked by
the legislature without compensation." She qualified this as an
important part of the state's fisheries management system
because it ensures the state's control of fishing privileges.
MS. McDOWELL warned that if the legal status of entry permits
were left open in any way to varying interpretations, it could
be detrimental to the interests of the state. If the argument
could be made that permits are property, and thereby available
to seizure by creditors, the state's fisheries management
program could be destabilized. The state could lose control to
the courts. She characterized the issue as especially important
in the current times of struggling fisheries.
Number 2444
MS. McDOWELL referred to Section 1 of [CSHB 287(FSH)] and said
it revises Title 9, the Code of Civil Procedure. She said that
the current law includes entry permits in the list of types of
property entitled to exemption; there might be the implication
that permits are property because they show up in a list of
exempt properties. The bill removes permits from that section
of Title 9 and places precise language in Section 5 of the bill
- page 7, line 26 - that states clearly that an entry permit is
not property.
MS. McDOWELL said Section 6, page 7, lines 30-31, inserts
language in the limited entry statutes that makes it absolutely
clear that the only time a person may request the commission to
transfer an entry permit, due to an execution on the permit, is
if that execution is for the purpose of enforcing a lien
recorded with the commission under the statutes of the Child
Support Enforcement Division (CSED).
MS. McDOWELL said Section 7, page 8, lines 19-24, spells out
that fishing privileges are exempt from the claims of all
creditors, except for fishing loans under the Division of
Investments and under the Commercial Fishing and Agriculture
Bank (CFAB) - the only two institutions allowed to treat permits
as collateral - and for CSED's authority to place a lien on a
permit. Ms. McDowell urged the bill's passage.
Number 2553
GERALD (JERRY) McCUNE, Lobbyist for United Fishermen of Alaska
(UFA), testified before the committee. He characterized the
bill as very important because in many villages, people's only
livelihood is from fishing. He said taking away someone's
permit takes away the ability to feed one's family. There are
many fishermen who would benefit from the removal of the .5-
percent fee for refinancing, he suggested.
Number 2606
CHERYL SUTTON testified before the committee. She addressed a
point made by Representative Kapsner by saying the IRS has
attempted to seize permits but has never been successful in
doing so. She said the Commercial Fisheries Entry Commission's
position has become more tenuous since then. This bill
strengthens the commission's position by classifying the permit
as a fishing privilege rather than property.
MS. SUTTON said she was aware that Co-Chair Scalzi had the
situation of fishermen in Bristol Bay in mind when he added the
portions of the bill concerned with federal taxes. She said the
bill was "so necessary" and expressed her wish that it be
approved and moved forward.
Number 2685
REPRESENTATIVE STEVENS moved to report CSHB 287(FSH) out of
committee with individual recommendations and the accompanying
fiscal notes. There being no objection, CSHB 287(FSH) was moved
out of House Resources Standing Committee.
HB 208-AQUATIC FARMS FOR SHELLFISH
CO-CHAIR SCALZI announced the final matter before the committee,
HOUSE BILL NO. 208, "An Act relating to aquatic farming of
shellfish; and providing for an effective date."
REPRESENTATIVE GREEN made a motion to adopt the proposed
committee substitute (CS), version 22-LS0763\P, Utermohle,
3/5/02, as the working document. There being no objection,
Version P was before the committee.
Number 2820
STEPHEN LaCROIX, Aquatic Farm Applicant, testified via
teleconference, extending his support to the "basic bill." He
pointed out that in the year since the bill was first crafted,
leases for farm sites had been extended to ten years.
Number 2874
BOB LOEFFLER, Director, Division of Mining, Land and Water,
Department of Natural Resources, testified before the committee.
He informed members that the department was in full support of
the bill.
Number 2904
REPRESENTATIVE STEVENS asked about the ten-year lease Mr.
LaCroix had asked about, and said he did not see it in the bill.
MR. LOEFFLER said it was in the original bill, and the question
of valuation is not in [Version P]. He said it was taken out
because it would be more expensive for the aquaculture growers.
Number 2940
RODGER PAINTER, Alaska Shellfish Growers Association, testified
before the committee. He thanked all involved for working hard
on the bill. He pointed to the biggest change in Version P.
TAPE 02-15, SIDE B
Number 2945
MR. PAINTER said [the biggest change] provides for 90 sites that
may be contained in a smaller number of areas. Another change,
on line 11, adds the word "potentially" between the words
"sites" and "suitable". This is to clarify that not all
questions would be fully answered and that there would be more
permits to obtain after a bidder secures the lease at auction.
He pointed to the change on line 16 and said it made the
language consistent with existing statutes.
Number 2854
ROBERT HARTLEY, Alaska Shellfish Growers Association (ASGA),
testified via teleconference. He expressed his support for the
bill and told the committee the bill would solve many problems
for shellfish farmers. He characterized shellfish farming as a
remedy to some of the economic ills that had recently befallen
the commercial fishing industry; he said the two dovetail
nicely. Noting that Alaskan aquatic farmers produce some of the
highest-quality shellfish in the world, he said the industry in
Alaska can barely meet the demand in Anchorage.
Number 2759
DOUG MECUM, Director, Division of Commercial Fisheries, Alaska
Department of Fish & Game, testified before the committee. He
said the bill is an example of good government, with the
industry, legislature, and agencies working together to develop
legislation that will be good for Alaskans. He added that the
money is an issue, and new sources of funds will have to be
located to make the program work.
Number 2708
REPRESENTATIVE McGUIRE asked what expenses the department was
incurring prior to the bill, when there was only the Aquatic
Farm Act on the books. She also asked why there is such a large
fiscal note for the bill now.
MR. MECUM responded by saying the existing program consists of a
mariculture coordinator, an assistant, and a small amount of
operational funds. He said that money had been reprogrammed for
the assistant position, different from the year before. He said
his department's budget for the program is approximately
$200,000. He characterized the fiscal notes from ADF&G [from
the Division of Habitat Restoration and the Division of
Commercial Fisheries] as "a one-time infusion of funds." The
Division of Commercial Fisheries' cost was estimated to be
$90,000 - down from $200,000 in the original bill - in the first
year; in the second year, there would be a decrease of about
half. He said there were similar numbers for the Division of
Habitat Restoration. Mr. Mecum said he has talked with the ASGA
about the fiscal notes, which agreed the numbers were
reasonable. He added that the intent of the bill was to double
the size of the industry.
Number 2536
REPRESENTATIVE McGUIRE asked if [the department] had been
pulling $200,000 from its existing budget to run the program,
prior to the bill.
MR. MECUM said the funds wouldn't be needed after two years, in
his estimation. He said the bill aims to find areas suitable
for 90 sites.
Number 2502
Co-Chair Scalzi asked what the difference would be between what
the bill legislates and what the program was in the past.
MR. MECUM said currently people can submit applications for
sites statewide. He said it is a problem, however, and offered
the analogy: "Bring me a rock. No, I'm sorry, that's not the
right rock; bring me another rock." He characterized the intent
of the bill as having the department do a "brush-clearing
exercise," saying the department would clear things away in
order to find areas where people can feasibly farm shellfish.
He said the bill is a very different approach.
Number 2445
REPRESENTATIVE McGUIRE answered that she didn't "have a problem
with that" and would continue to support the bill, even though
she thought it would be doomed by the fiscal note. She gave the
analogy of the oil industry: the state doesn't allow it to
develop all over the state, but the oil industry is instrumental
in identifying areas where it has been successful in drilling.
MR. MECUM characterized Representative McGuire's point as a good
one. He told of his vision of a partnership between the
industry and the department wherein proposals would be brought
forth by the industry and the department would do the basic
survey and inventory to determine whether a site would be right
for development.
Number 2346
REPRESENTATIVE GREEN asked what sort of revenue would be
generated by offering lease sites through public auction.
MR. MECUM deferred to Bob Loeffler of the Department of Natural
Resources (DNR), since DNR would be in charge of leasing. He
said ADF&G would be concerned with the biological aspects of
shellfish farming.
Number 2304
CO-CHAIR SCALZI said there were problems with the old system.
He expressed his belief that the partnership approach of the
bill would be "productive and streamlined." He said DNR has
increased the budget by means of "oil and water-rights issues
that do make us money." He said Alaska has to look for things
that will generate money for the state coffers, and this bill
might help in that pursuit.
Number 2209
MR. LOEFFLER told the committee the 90 sites would generate
roughly $55,000 per year. The three-acre lease sites would
require a few years to be completely taken up.
REPRESENTATIVE GREEN said it was more palatable to see some
estimated income for the state's $250,000 than to see the money
dumped into allowing "those guys [to] go out and do some
aquaculture."
Number 2123
REPRESENTATIVE GREEN moved to report CSHB 208 [version 22-
LS0763\P, Utermohle, 3/5/02] out of committee with individual
recommendations and the accompanying fiscal notes. There being
no objection, CSHB 208(RES) was moved out of the House Resources
Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:20 p.m.
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