HOUSE BILL NO. 341 "An Act relating to the dive fishery management assessment." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Wilken stated that this legislation would "finalize a compromise between Alaska shellfish growers and commercial fisherman and resolves a long-standing controversy about geoduck clams on aquatic farm sites." He reminded the Committee that a Constitutional question arose regarding language in the committee substitute, Version 23-LS1280\I that was adopted during the May 8, 2004 hearing on this bill. TIM BARRY, Staff to Representative Bill Williams, the bill's sponsor, explained to the Committee that the original bill that was transmitted from the House of Representatives to the Senate contained a technical change to State statute regarding how "the dive fishery association assesses itself for management of the dive fishery." Co-Chair Wilken suggested that rescinding Committee action on the adoption of the Senate Finance committee substitute might be the most appropriate course of action with which to deal with the Constitutional issues raised in the memorandum [copy on file], dated May 4, 2004, and addressed to the bill's sponsor from George Utermohle, Legislative Counsel, Division of Legal and Research Services. Mr. Barry communicated that the sponsor would desire that the original House bill, Version 23-LS1280\A, be furthered. Co-Chair Wilken asked Mr. Barry to explain the issues addressed in Mr. Utermohle's 12-page memorandum. Mr. Barry stated that the Constitutional issue regards to what extent shellfish farmers could harvest wild geoduck stock on leased State aquatic sites in Southeast Alaska. He explained that a State Superior Court ruling specified that, based on the State's Constitution, a shellfish farmer would be allowed to harvest "an insignificant amount of clams." The Superior Court decision, he continued, was appealed to the State Supreme Court which decided, based on statutory grounds rather than on Constitutional grounds, that shellfish farmers could not harvest substantial amount of wild geoducks on a site. Mr. Barry stated that, at a recent meeting, geoduck divers, shellfish farmers, the Department of Fish and Game, the Department of Law, and others met and developed language that addressed both the statutory and Constitutional concerns addressed by the Courts. This language, he continued, is included in the Senate Finance committee substitute adopted by this Committee. He stated that these groups "are confident" that were the constitutionality of this language challenged at the Superior Court level, "the language was meet the question as addressed by the Superior Court." Mr. Barry informed that the concern raised in Mr. Utermohle's memorandum is that it is unknown how a challenge at the Supreme Court level would fare, as statutory not Constitutional issues were addressed in that Court. He concluded that while the concerned parties believe that the language would meet the Constitutional issue addressed by the Superior Court, the view of these issues at the Supreme Court level is "an unanswered question." Co-Chair Wilken stated that the question is whether to advance the original House version of the bill or the Version "I" bill to which has Constitutional concerns have been raised. Mr. Barry reiterated that the bill's sponsor favors advancement of the original version of the bill. He stated that "no questions of any sort" arose regarding the original House bill as it proceeded through House hearings and the floor process. Co-Chair Wilken clarified therefore, that the Court issues involve actions taken by the Senate. Mr. Barry concurred. In response to a question from Co-Chair Wilken, he responded that the bill passed the House by a vote of 39 ayes to one nay, and that "very minimal" discussion had occurred. Senator Dyson made a motion to rescind the May 8, 2004 Committee action adopting the Finance committee substitute, Version 23- LS1280\I. There being no objection, the action of adopting the Version "I" committee substitute was RESCINDED. Co-Chair Wilken stated that HB 341, Version 23-LS1280\A is now before the Committee. Mr. Barry informed the Committee that the Southeast Alaska Regional Dive Fisheries Association was created in 1998 and consists of dive fishermen, communities in Southeast Alaska, and processors. Continuing, he noted that the Association, though assessing its members at a rate of one, three, five, or seven-percent as specified in State statute, pays for management of the fishery. He stated that HB 341 would change statute to provide the Association "more flexibility to fund the process" by expanding the options to include two, four, or six percent assessments. Senator Olson asked whether other aquiculture operations outside of Southeast Alaska have weighed in on this legislation. Mr. Barry voiced that no concern from other areas have been expressed. PAUL FUHS, Representative, Alaska Trademark Shellfish Industry, expressed disappointment in not testifying before the Committee rescinded its action on Version "I" as, he recounted, the Court had heard regarding the Constitutional issues and that there should be "some comfort in the fact that they didn't rule on it." He stated that it is inevitable that there would be some wild stock on a leased aquatic farm site for, he continued, if no wild stock existed there, "it is bad habitat." Therefore, he stated that in order for the shellfish industry to grow, the issue of wild stock must be addressed. He opined that, prior to this Court case, the Department of Fish and Game had adequate measures in place to address the harvesting of wild stock on these sites. He stated that the Court's addressing of statutory rather than Constitutionality issues lends support to adopting the committee substitute. He stated that no action in this regard would hurt the industry. Co-Chair Wilken asked whether this bill had had other Senate committee hearings prior to being referred to Senate Finance. Mr. Barry informed that the bill had been heard by the Senate Labor & Commerce (L&C) Committee. Co-Chair Wilken asked whether the Senate L&C Committee had reviewed any of the Constitutional issues that have been raised. In addition, he opined that the bill should have been referred to the Senate Judiciary Committee where Mr. Utermohle's memorandum could have been "dissected" and addressed. Co-Chair Wilken commented that action on this bill is limited due to the impending end of this Legislative Session, and that he expected that the bill would be re-introduced the next Legislative session in order to give it "proper consideration." He reiterated that another Senate committee referral should transpire in order to "properly" address all the issues. Mr. Fuhs commented that all the various components of the bill had been addressed by the Department of Natural Resources and other interested parties, and that the committee hearing delay was a result of the timing of the recent Supreme Court ruling. Co-Chair Wilken pointed out that the Committee's options would include reporting out the original bill, HB 341, Version 23- LS1280\A, or reporting out the Version "I" committee substitute with a referral to the Judiciary Committee. Mr. Berry responded that, of those options, the bill's sponsor would support reporting Version "A" from Committee. Senator Olson asked the Alaska Trademark Shellfish Industry position regarding these options. Mr. Fuhs voiced support for furthering Version "A," as he stated, "there is no problem with it at all." Co-Chair Green moved to report the original bill, HB 341, Version 23-LS1280\A, from Committee with individual recommendations and accompanying fiscal notes. There being no objection, HB 341 was REPORTED from Committee, accompanied by zero fiscal note #1, from the Department of Revenue dated February 1, 2004. RECESS TO THE CALL OF THE CHAIR 11:03 AM / 7:08 PM