Legislature(2019 - 2020)SENATE FINANCE 532
02/07/2020 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB41 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 41 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
February 7, 2020
9:02 a.m.
9:02:45 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 9:02 a.m.
MEMBERS PRESENT
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Donny Olson
Senator Bill Wielechowski
MEMBERS ABSENT
Senator Natasha von Imhof, Co-Chair
Senator David Wilson
ALSO PRESENT
Representative Dan Ortiz, Sponsor; Liz Harpold, Staff,
Representative Dan Ortiz; Flip Prior, Division of
Commercial Fisheries, Department of Fish and Game; Steve
Ricci, Staff, Aleutian Pribilof Island Community
Development Association (APICDA); Senator Cathy Giessel.
PRESENT VIA TELECONFERENCE
Brandon Spanos, Deputy Director, Department of Revenue,
Anchorage; Julie Decker, Executive Director, Alaska
Fisheries Development Foundation, Wrangell; Kate Sullivan,
Southeast Alaska Regional Dive Fisheries Association,
Ketchikan; Nancy Hillstrand, Pioneer Alaskan Fisheries,
Anchorage.
SUMMARY
CSHB 41(FIN)
SHELLFISH PROJECTS; HATCHERIES; FEES
CSHB 41(FIN) was HEARD and HELD in committee for
further consideration.
CS FOR HOUSE BILL NO. 41(FIN)
"An Act relating to management of enhanced stocks of
shellfish; authorizing certain nonprofit organizations
to engage in shellfish enhancement projects;
authorizing the Department of Fish and Game to collect
fee revenue from applicants for certain salmon
hatchery permits and from applicants for shellfish
enhancement project permits; relating to application
fees for salmon hatchery permits; and providing for an
effective date."
9:04:27 AM
REPRESENTATIVE DAN ORTIZ, SPONSOR, introduced the
legislation. He explained that the bill was a step in the
process for helping the economies in coastal Alaska. The
legislation was an enhancement for Alaska's shellfish
industry. He stated that it held the potential for
expanding economic opportunities in the coastal communities
in the state, and an increased resilience of the state's
fisheries portfolio. He explained that the bill allowed
qualified nonprofits to pursue enhancement and/or
restoration projects involving shellfish species, including
red and blue king crab; sea cucumber; abalone; and razor
clams. The bill created a regulatory framework for the
Department of Fish and Game (DFG) to manage shellfish
enhancement projects and outlined criteria for issuance of
permits. The bill set out stringent safety standards to
ensure sustainability for existing natural stocks. The
commissioner of DFG must also make determination of
"substantial public benefit" before a project could
proceed. He furthered that, additionally, the bill allowed
for DFG to set the application fee for a shellfish
enhancement project permit, and granted similar authority
over the application fee for a salmon enhancement permit.
He announced that the bill played an important role in the
development of mariculture in Alaska by providing a method
to increase the available harvest of shellfish for public
use in an environmentally safe and responsible manner.
Co-Chair Stedman wondered whether Representative Ortiz
needed a "lifeline to explain the bill."
Representative Ortiz replied that he did not need a
lifeline, but invited his staff to help explain the bill.
9:07:41 AM
LIZ HARPOLD, STAFF, REPRESENTATIVE DAN ORTIZ, explained the
bill further. She stated that the bill came about, because
many stakeholders and participants in Alaska's commercial
fishing industry came together to identify shellfish
enhancement restoration as something that, over time, would
help improve Alaska's shellfish fisheries and expand the
economic opportunities. She stated that, currently,
shellfish enhancement was not allowed in the state. She
explained that the bill provided the regulatory framework
for DFG to permit shellfish enhancement. The bill was
modelled after the current salmon enhancement statutes, AS
16.10. She remarked that mariculture had grown quite a bit
in Alaska. She stated that mariculture encompassed that
enhancement, restoration, and farming of shellfish or
seaweeds. She stated, however, that aquatic farming as a
private business was already in place with regulatory
framework. She explained that the bill did not deal with
private shellfish farming. The bill dealt with the public
benefit aspect of mariculture development, which was the
enhancement and restoration of species. She stated that
enhancement was intended to create a greater abundance of
shellfish for the public to legally harvest. She noted that
restoration was an important aspect of the legislation. She
remarked that there was currently no tool to remedy the
decline in certain shellfish species, such as crab. She
reiterated Representative Ortiz's comments.
Ms. Harpold discussed the Sectional Analysis (copy on
file):
Sec. 1: Provides the Alaska Board of Fisheries
authority to direct the department to manage
production of enhanced shellfish stocks, beyond brood
stock needs, for cost recovery harvest.
Sec. 2: Grants the Department of Fish and Game the
authority to set the fee for new private nonprofit
salmon hatcheries based on regulatory costs.
Sec. 3: States that the fees collected in Section 2
will be accounted for separately as non-general fund
program receipts.
Sec. 4: Adds a new Chapter 12 to Title 16, "Shellfish
Stock Enhancement Projects."
AS 16.12.010: Provides direction to the
commissioner of the Department of Fish and Game
on issuance of permits for private nonprofit
shellfish fishery enhancement projects and grants
the department the authority to set the permit
application fee. States the permit fee will be
accounted for separately as non-general fund
program receipts. This section directs the
commissioner to consult with technical experts in
the relevant areas before permit issuance;
AS 16.12.020: Provides for a hearing and public
notification and input process prior to issuance
of a permit;
AS 16.12.030 Describes terms and conditions for
permit holders to conduct their work, including
cost recovery fisheries, harvest, sale, and
release of enhancement project produced
shellfish, and selection of brood stock sources;
AS 16.12.040: Describes the revocation process
should a permit holder fail to comply with the
terms and conditions of the permit;
AS 16.12.050: Specifies that shellfish produced
under an approved enhancement project are a
common property resource, with provision for
special harvest areas by permit holders. This
section also specifies the Board of Fisheries to
establish regulations relating to this chapter;
AS 16.12.060: Directs the department to advise
and assist permit holders in their AS 16.12.070
provides department authority to approve source
and number of shellfish taken for use as
broodstock.
AS 16.12.080 places restrictions on how monies
receives from sale of shellfish may be used only
for operating costs associated with their
facilities;
AS 16.12.090 Relates to Cost Recovery Fisheries,
and provides a means by which a shellfish
hatchery may contract to either harvest and sell
shellfish, or to implement a self-assessment from
amongst its membership, for purposes of
recovering operational costs associated with the
hatchery.
AS 16.12.100 Gives the department authority to
inspect facilities at any time while the facility
is in operation;
AS 16.12.110 Requires a permit holder to submit
an annual report to the department;
AS 16.12.199 provides definitions for
"enhancement project," "facility," "genetically
modified shellfish," "hatchery," and "shellfish;"
Sec. 5: Provides the Commercial Fisheries Entry
Commission authority to issue special harvest area
entry permits to holders of private nonprofit
shellfish rehabilitation, or enhancement project
permits.
Sec. 6: Defines legal fishing gear for special harvest
area entry permit holders.
Sec. 7: Exempts shellfish raised in a private
nonprofit shellfish project from the farmed fish
definition.
Sec. 8: Defines the fees collected for salmon hatchery
permit applications and shellfish enhancement project
permit applications as non-general fund program
receipts.
Sec. 9-10: Establish state corporate income tax
exemption for a nonprofit corporation holding a
shellfish fishery enhancement permit.
Sec. 11: Exempts shellfish harvested under a special
harvest area entry permit from seafood development
taxes.
Sec. 12: Establishes an effective date for the salmon
hatchery permit application fee described in Section
2.
Sec. 13: Authorizes the Department of Fish and Game to
adopt implementing regulations.
Sec. 14: Establishes an immediate effective date for
sec. 11 pursuant to AS 01.10.070(c).
Sec. 15: Establishes an effective date for sec. 8
concomitant with sec. 2, Chapter 55, SLA 2013.
Senator Wielechowski queried the impacts to personal use if
companies enhance an area, and whether that area would be
off limits to the public.
Ms. Harpold deferred to the Department of Fish and Game
(DFG).
9:16:49 AM
FLIP PRIOR, DIVISION OF COMMERCIAL FISHERIES, DEPARTMENT OF
FISH AND GAME, introduced himself.
Co-Chair Stedman wondered whether DFG had any issue with
the legislation.
Mr. Prior replied that the department had no issue with the
bill.
Co-Chair Stedman wondered whether it was a "perfect bill."
Mr. Prior replied that it was not a perfect bill, but he
saw no issue with it.
Co-Chair Stedman wondered whether DFG was in support of the
bill.
Mr. Prior replied that DFG was in support of the bill.
Senator Wielechowski wondered whether companies would be
enhancing areas that would be in turn off limits to the
public.
Mr. Prior responded that companies would not enhance areas
that would in turn be off limits to the public. He
explained that the idea behind the bill was to provide
opportunity. The areas that would be set up for special
harvest areas were not off limits to the public, but would
be managed accordingly. Therefore, there may be instances
that would restrict access.
Senator Wielechowski wondered whether recreational
fisherman could use the areas, and whether they would be
charged to use those areas.
Mr. Prior replied that it would be just like any other
area.
Senator Wielechowski wondered how there would be management
without oversight of the public take.
Mr. Prior replied that it would be managed like any other
fishery.
9:19:36 AM
Senator Bishop requested an example of "designated legal
gear."
Mr. Prior replied that, generally, legal gear had the same
designation as the commercial fishery. Although, there may
be modifications in some instances.
Senator Bishop requested an example for shellfish.
Mr. Prior could not think of a shellfish example.
Senator Olson felt that the legislation was geared
exclusively to nonprofits. He wondered whether a for-profit
organization could participate.
Mr. Prior responded that nonprofits were historically
involved in the salmon industry. He explained that once the
fish were released, they became common property. Therefore,
it did not make sense for a for-profit company to be
involved in that endeavor.
Senator Wielechowski noted the change from $100 to a yet
determined amount. He queried the fee determination
process, and asked the amount of the estimated fee.
Mr. Prior replied that the fee had not yet been determined,
and stated that there would be an examination of the volume
of permits. He felt that there would not be many permits.
He explained that there was an expectation of two or three
in the first year, and then one a year for every year after
the first year. He explained that there would be an
examination of staff time needed to process the permits. He
remarked that there was a good current system that could
accept a little bit more pressure.
Senator Wielechowski queried the process of the cost
recovery under the system.
Mr. Prior responded that it would most likely be an
assessment tax. He explained that it would vary case to
case, and species to species.
Senator Wielechowski requested the current rate of taxation
and whether it would be recovered through the cost
recovery.
Mr. Prior replied that he was not the right person to
respond to the question.
Co-Chair Stedman asked for a restatement of the question.
Senator Wielechowski noted that there was an exemption in
Section 11 created for the tax for shellfish. He requested
detail about that tax, and whether the loss in potential
revenue would be recouped through some other means like
cost recovery.
Co-Chair Stedman shared that the question would be brought
back to another department.
Senator Wielechowski wondered whether DFG or the nonprofit
would manage paralytic shellfish toxin testing.
Ms. Prior replied that he was not sure about the testing
procedure management. He felt that it would be species-
specific in a case-by-case basis. He shared that the
harvesters of geoduck fisheries managed the testing.
9:25:35 AM
Co-Chair Stedman requested more information about that
issue.
Senator Wielechowski wondered whether a nonprofit would be
permitted to genetically modify shellfish for harvest.
Mr. Prior replied in the negative. He explained that local
stocks would be used, and try to not affect the genetics of
the species.
Senator Wielechowski wondered whether there would be an
allowance for a non-native stock to be introduced in areas.
Mr. Prior replied that it would not occur. He stressed that
the intent was to use local stocks in all cases.
Senator Wielechowski queried the defining of special areas
of crab enhancement, because crab move around.
Mr. Prior replied that special harvest areas would be
defined with the commissioner's authority either through
permitting or emergency order (EO). He stressed that it
would be a defined area for the fishing, regardless of
whether the crab move from that area.
Co-Chair Stedman queried an explanation of "EO."
Mr. Prior explained that "EO" stood for emergency order.
Senator Olson queried the effect of climate change on
enhancement efforts.
Mr. Prior replied that there has not yet been a
determination of the effect of climate change.
Co-Chair Stedman announced that Senator Cathy Giessel was
present for the meeting.
Senator Wielechowski looked at page 3, Section 4, "would
result in substantial public benefits." He queried the
determination of "substantial public benefit." He wondered
whether it was substantial public benefit for private or
commercial use.
Mr. Prior replied that it would be a sum of those uses.
Senator Wielechowski wondered whether oysters were native
to Alaska.
Mr. Prior replied that oysters were not native to Alaska.
Senator Wielechowski wondered whether oysters would be
covered in the legislation.
Mr. Prior replied that currently the aquatic farm operation
had oysters, but did not see the enhancement of oysters as
part of the bill.
Senator Bishop remarked that oysters had been farmed in
Alaska for at least 60 years. He wondered whether farming
had been longer that 60 years.
Mr. Prior replied that he did not know when oyster farming
began in Alaska.
9:30:44 AM
BRANDON SPANOS, DEPUTY DIRECTOR, DEPARTMENT OF REVENUE,
ANCHORAGE (via teleconference), introduced himself.
Co-Chair Stedman asked Senator Wielechowski to state his
question.
Senator Wielechowski looked at Section 11, which had an
exemption for shellfish in the tax code. He queried the
current tax, and wondered whether there was an anticipation
to cover the lost revenue through some other means like
cost recovery.
Mr. Spanos replied that Section 11 exempted the new
assessment from another assessment. He explained that
Section 43.76.360 was the Regional Seafood Development Tax,
which was another elective tax on fishery resources using
specific gear types from designated seafood development
regions. He stated that the revenue was deposited into a
special seafood development tax in the general fund, which
would be subject to appropriation to go to the seafood
development associations. He explained that the salmon tax
was already exempt from the Regional Seafood Development
Tax, and was in lieu of that tax. The bill would create
another assessment in lieu of the Regional Seafood
Development Tax, which was currently at 1 percent.
9:33:43 AM
JULIE DECKER, EXECUTIVE DIRECTOR, ALASKA FISHERIES
DEVELOPMENT FOUNDATION, WRANGELL (via teleconference),
spoke in support of the legislation.
Co-Chair Stedman OPENED public testimony.
9:38:13 AM
KATE SULLIVAN, SOUTHEAST ALASKA REGIONAL DIVE FISHERIES
ASSOCIATION, KETCHIKAN (via teleconference), spoke in
support of the legislation. She stated that her association
had spent many years to develop sea cucumber enhancement to
do wild stock enhancement work. She stated that, without
the ability to put sea cucumbers in the wild, there was a
point where work was halted.
9:39:48 AM
NANCY HILLSTRAND, PIONEER ALASKAN FISHERIES, ANCHORAGE (via
teleconference), testified against of the legislation. She
wanted the removal of crab in the legislation, because of
their effect on other fisheries.
Co-Chair Stedman stressed that the bill would be set aside
for further review.
9:44:01 AM
STEVE RICCI, STAFF, ALEUTIAN PRIBILOF ISLAND COMMUNITY
DEVELOPMENT ASSOCIATION (APICDA), spoke in support of the
legislation.
Co-Chair Stedman CLOSED public testimony.
Senator Bishop discussed the fiscal notes.
9:51:09 AM
Mr. Harpold thanked the committee for hearing the bill. She
addressed some questions. She stressed that oysters did not
propagate in Alaskan waters, so they were not eligible for
enhancements. She shared that the regulations were laid out
for personal use for sport or subsistence.
Senator Wielechowski wanted to hear from DFG about
testimony from Ms. Hillstrand.
Senator Olson queried the sponsor's perspective about Ms.
Hillstrand's view related to the removal of crab from the
bill to alleviate her concern.
Ms. Harpold agreed to provide that information.
Senator Wielechowski wondered whether the bill had been
vetted with DFG scientists, and asked whether there were
concerns from them about the bill.
Mr. Prior agreed to provide that information.
Co-Chair Stedman requested responses to the questions, and
provide those answers to the committee. He discussed the
following week's schedule.
CSHB 41(FIN) was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
9:55:51 AM
The meeting was adjourned at 9:55 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 41 Explanation of Changes v. A to U.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |
| HB 41 Sectional Analysis v. U 5.6.2019.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |
| HB 41 Sponsor Statement 5.6.2019.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |
| HB 41 Testimony Provided by Sponsor.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |
| HB 41 A review of Hatchery Reform science 2020 Wash.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |
| HB 41 Koeneman Public Testimony.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |
| HB 41 Public Testimony Hillstrand.pdf |
SFIN 2/7/2020 9:00:00 AM |
HB 41 |