ALASKA STATE LEGISLATURE  HOUSE SPECIAL COMMITTEE ON FISHERIES  February 26, 2009 10:19 a.m. MEMBERS PRESENT Representative Bryce Edgmon, Chair Representative Craig Johnson Representative Wes Keller Representative Charisse Millett Representative Cathy Engstrom Munoz Representative Robert L. "Bob" Buch Representative Scott Kawasaki MEMBERS ABSENT  All members present COMMITTEE CALENDAR    HOUSE BILL NO. 43 "An Act relating to aquatic farm permitting involving geoducks and to geoduck seed transfers between certified hatcheries and aquatic farms." - MOVED HB 43 OUT OF COMMITTEE HOUSE BILL NO. 143 "An Act repealing the termination of licensing and regulation of sport fishing operators and sport fishing guides and licensing and registration of sport fishing vessels; and providing for an effective date." - HEARD AND HELD HOUSE CONCURRENT RESOLUTION NO. 6 Recreating the Cook Inlet Salmon Task Force as a joint legislative task force. - HEARD AND HELD PREVIOUS COMMITTEE ACTION  BILL: HB 43 SHORT TITLE: GEODUCK AQUATIC FARMING/SEED TRANSFER SPONSOR(s): REPRESENTATIVE(s) SEATON 01/20/09 (H) PREFILE RELEASED 1/9/09 01/20/09 (H) READ THE FIRST TIME - REFERRALS 01/20/09 (H) FSH, RES 02/24/09 (H) FSH AT 10:15 AM BARNES 124 02/24/09 (H) Heard & Held 02/24/09 (H) MINUTE(FSH) 02/26/09 (H) FSH AT 10:15 AM BARNES 124 BILL: HB 143 SHORT TITLE: NO REPEAL OF SPORT FISH GUIDE LICENSING SPONSOR(s): FISHERIES 02/23/09 (H) READ THE FIRST TIME - REFERRALS 02/23/09 (H) FSH, RES 02/26/09 (H) FSH AT 10:15 AM BARNES 124 BILL: HCR 6 SHORT TITLE: COOK INLET SALMON TASK FORCE SPONSOR(s): REPRESENTATIVE(s) JOHNSON 02/02/09 (H) READ THE FIRST TIME - REFERRALS 02/02/09 (H) FSH, RES, FIN 02/18/09 (H) RES AT 1:00 PM BARNES 124 02/18/09 (H) 02/26/09 (H) FSH AT 10:15 AM BARNES 124 WITNESS REGISTER REPRESENTATIVE PAUL SEATON Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Testified on HB 43, as prime sponsor. RON JOSEPHSON, Section Chief Fisheries Monitoring, Permitting, and Development Division of Commercial Fisheries Alaska Department of Fish & Game (ADF&G) Juneau, Alaska POSITION STATEMENT: Testified officially neutral on HB 43, stipulated department concerns, and responded to questions. RAYMOND RALONDE, Professor of Fisheries University of Alaska Fairbanks (UAF) Alaska Sea Grant Marine Advisory Program Participant State of Alaska Aquaculture Specialist Eagle River, Alaska POSITION STATEMENT: Testified on HB 43, and provided information regarding intertidal mariculture of geoduck clams. TIM CLARK, Staff to Representative Bryce Edgmon Alaska State Legislature Juneau, Alaska POSITION STATEMENT: Presented CSHB 143 on behalf of the House Special Committee on Fisheries, chaired by Representative Edgmon. CHARLES SWANTON, Director Division of Sport Fish Alaska Department of Fish & Game (ADF&G) Juneau, Alaska POSITION STATEMENT: Testified in support of CSHB 143, and responded to questions. DICK ERKENEFF, Member Board of Directors Kenai River Sportfishing Association, Incorporated Soldotna, Alaska POSITION STATEMENT: Testified in support of CSHB 143. RICK SIKMA North Pole, Alaska POSITION STATEMENT: Testified in opposition to CSHB 143. REPRESENTATIVE CRAIG JOHNSON Alaska State Legislature Juneau, Alaska ACTION NARRATIVE: Testified on CSHCR 6, as prime sponsor. 10:19:58 AM CHAIR BRYCE EDGMON called the House Special Committee on Fisheries meeting to order at 10:19 a.m. Representatives Edgmon, Millett, Buch, Munoz, Johnson, and Keller were present at the call to order. Representative Kawasaki arrived as the meeting was in progress. HB 43-GEODUCK AQUATIC FARMING/SEED TRANSFER 10:20:43 AM CHAIR EDGMON announced that the first order of business would be HOUSE BILL NO. 43, "An Act relating to aquatic farm permitting involving geoducks and to geoduck seed transfers between certified hatcheries and aquatic farms." 10:21:32 AM REPRESENTATIVE PAUL SEATON, Alaska State Legislature, clarified two aspects of the bill: it does not provide for indiscriminate transfer of geoduck/seed between farms, or override transport requirements as permitted by the Alaska Department of Fish & Game (ADF&G); and it stipulates that the farm must be subtidal. 10:22:51 AM RON JOSEPHSON, Section Chief, Fisheries Monitoring, Permitting, and Development, Division of Commercial Fisheries, Alaska Department of Fish & Game (ADF&G), restated the pending committee question as to the type of research the department would propose implementing in order to alleviate specific concerns for the bill. He suggested that a study using sterile shellfish would be a direction to consider, and cited the Alutiq Pride Shellfish Hatchery research on salmonids, and certain shellfish, employing the technique of triploid induction. Introducing a sterile animal outside of its zone would be acceptable to the department. Additionally, ADF&G would like to see basic research conducted regarding the viability of subtidal mariculture farms in northern climates. Existing thermographs could be placed in the substrate of proposed farm areas, and existing Southeast mariculture farm locations could be used as a parallel study, to generate data for determining growth rates. 10:25:48 AM REPRESENTATIVE BUCH asked for a restating of the department's position. MR. JOSEPHSON said the department is officially neutral, with stipulated concerns. The concerns are for: introducing a non- native species into the larval drift zones of Southcentral Alaska, with minimal information available on the possible impacts to the natural eco systems - analogous to an invasive species; and lack of demonstrated benefits for economic development of geoduck farming in Southeast Alaska. He opined that it would be premature to branch out to other areas of Alaska, and taking the inherent risks, without substantiating data to indicate an economic benefit. 10:28:06 AM REPRESENTATIVE JOHNSON acknowledged that the department is taking a neutral position, and requested Mr. Josephson's scientific opinion. MR. JOSEPHSON opined that the unknown economic viability weighed against the untested risk, does not provide a compelling reason to prematurely expand this type of mariculture development. Geoduck farming is an emerging industry in British Columbia, Canada, and southeast Alaskan waters, but has not produced a tangible benefit, to date. REPRESENTATIVE JOHNSON noted that there exists a difference of opinion within the department, which needs to be explored. 10:29:46 AM REPRESENTATIVE MILLETT allowed that the colder waters of Alaska may retard the grown rate of the geoduck, and asked whether this type of mariculture could ever prove to be economically viable for the state. MR. JOSEPHSON described intertidal farming as being relatively cheap and simple, however, subtidal mariculture requires more effort, is effected by more variables, and is comparatively expensive. He predicted that the geoduck could be economically farmed, despite these constraints. In response to Representative Buch, he agreed to provide a written statement to the committee, prior to further hearings on HB 43. 10:32:38 AM CHAIR EDGMON announced that further departmental comment would be brought to the committee. 10:33:34 AM REPRESENTATIVE MILLETT cautioned that many private sector ventures in Alaska would not have occurred, had the state stood in judgment of the economic viability prior to allowing development; including arctic drilling. She requested further scientific analysis from ADF&G versus economic viability opinions. 10:34:27 AM REPRESENTATIVE KAWASAKI held that economic viability was not being judged. The department, he defended, is showing appropriate concern for existing industries that may be effected by taking the risk of introducing an invasive species. 10:36:24 AM CHAIR EDGMON reopened public testimony, stipulating that it would be limited to the individual before the committee. 10:36:32 AM RAYMOND RALONDE, Professor of Fisheries, University of Alaska Fairbanks (UAF), Alaska Sea Grant Marine Advisory Program Participant, State of Alaska Aquaculture Specialist, said that it was his 1992 published research document that served as the basis for establishing the larval drift zones in Alaska. The zones were necessary for creating a formal shellfish transport policy that would ensure minimal genetic impact. Blue mussels and scallops were utilized in the study. Drifting patterns were computed based on considerations for water temperature, surface water velocities, and species developmental growth rates. A delineation was made for Southcentral and Southeast because there appeared to be a probability that larva could drift between these areas and survive. Historically, he said this is why the policy was established. Regarding the economic viability of geoduck, he stated support for the right of independent developers to take business risks. Throughout the years, applied research activities have been jointly conducted with the university and private sector farmers, regarding aquaculture development, utilizing the "try it and see" approach. These studies have paved the way for protocol to be established regarding mariculture of certain species, such as the purple hinge rock scallop and littleneck clam farming. He cautioned that falsely represented economic information may be an issue, if factors particular to the geoduck are not considered. For instance, the slow maturation of the geoduck, or the market price expectations may be misconstrued, and the realistic values lost on an eager entrepreneur. He reported that he is currently in the fifth year of a systematic grow out study specifically on survival and growth rates of geoduck clams. The study, located on Annette Island, is being conducted in an intertidal zone. In the 4th year the clams are slightly less than 1/2 pound, en route to becoming a 2 pound, mature, harvest size clam, which he predicts will take another six or seven years. The survival rate is 48 percent, but the growth rate is 20 percent slower than what occurs in the warmer waters of Puget Sound. He remains cautiously optimistic that geoduck clam farming will become a viable industry in the state. In reading the bill, it appears to ban intertidal aquaculture statewide, and he pondered if that was the intent. He acknowledged that Kachemak Bay poses a unique concern, but considers this an exception to the remainder of the state. In other regions, the industry is appealing for several reasons: it appears to be viable; an orderly permitting process already exists; the common man can enter the field without special training - such as diving; the effort does not require a large capital outlay - no boat or equipment to purchase; and it does not conflict with common property fisheries - harvestable stocks of geoduck do not naturally exist in the intertidal zone. Finally, he said: It can be done by the people who live there and supply the income and the employment for that community. ... I'm concerned that the bill might prohibit that, based upon what's happening in Kachemak Bay. Kachemak Bay is an entirely different argument ... relative to intertidal aquaculture. 10:45:08 AM REPRESENTATIVE BUCH asked if he is a proponent or in opposition to the bill. MR. RALONDE opined that risks exist in every enterprise. He noted that in this instance the risk factor is high given the potential problem for separation of stock, and the transport distance required for a single stock. These factors are unknown in regard to geoduck, although other species that have been similarly transported have had unintended consequences. He opined that a population of geoduck may already exist in Prince William Sound, but it is one of the unknowns. He provided an example of the purple hinged rock scallop. This scallop is indigenous to Southeast, however, their transport and introduction for cultivation was denied in Southcentral. Scientists expended effort to find a local, Southcentral, population to draw on, but to no avail. Six or seven years ago, however, juvenile purple hinged scallops began to show up on the ladder nets of the mariculture farmers in Kachemak Bay. Further, in the last year he has discovered the scallops on gear at his mollusk grow-out site for oysters. This proves that a local purple hinged scallop reproductive stock exists, but it could not be located by scientists. If a local geoduck stock exists, and seed is transported in, the genetics of the indigenous species could be swamped by the transported seed. The economic viability research aspect is also an unknown. He stressed the need to provide accurate, adequate information to potential farmers. CHAIR EDGMON closed public testimony. 10:49:49 AM REPRESENTATIVE SEATON clarified that on page 1, lines 8 and 9, it is stipulated that geoduck will not be introduced where a native stock exists. He cited the oyster mariculture, in Southcentral, as a success story of introducing a non-native, and non-reproductive, species to an area and creating an economically viable business opportunity. Additionally, he pointed out that an intertidal study will not provide information to assist the subtidal farmer. He stressed the importance of providing the possibility to create an economic base in coastal villages. The bill has been structured to eliminate conflicts with subsistence and sport users by situating these farms in subtidal areas. Neither does the bill prevent or effect farming in Southeast; a separate management area with wild geoduck stock. To a question from the chair, he cautioned that the product price is subject to fluctuation and investors will need to exercise their own due diligence for proposal purposes. He said that the bill allows any interested party to enter into the due diligence process, and apply for appropriate departmental permits; private individuals or village corporations. An exception, in the bill, is for a policy that disallows the taking of geoduck from the Seward area, where they are raised as seed and planted in specific Gulf locations. 10:55:34 AM REPRESENTATIVE KELLER noted that the bill prohibits intertidal permitting, and asked if that was the intent. REPRESENTATIVE SEATON responded that it is the intent for areas in the Gulf of Alaska, but not for the southeastern region. 10:56:43 AM REPRESENTATIVE KELLER commented on the need to exercise caution when introducing an invasive species to an area, however, the release of a bilge pump can release any number of unintended hitchhikers. REPRESENTATIVE KELLER moved to report HB 43, Version 26-LS0227\A out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, HB 43 was reported from the House Special Committee on Fisheries. 10:58:07 AM The committee took a brief at ease from 10:58 to 11:03. HB 143-NO REPEAL OF SPORT FISH GUIDE LICENSING 11:03:44 AM CHAIR EDGMON announced that the next order of business would be HOUSE BILL NO. 143, "An Act repealing the termination of licensing and regulation of sport fishing operators and sport fishing guides and licensing and registration of sport fishing vessels; and providing for an effective date." 11:03:53 AM REPRESENTATIVE KAWASAKI moved to adopt committee substitute (CS) for HB 143, Version 26LS0622\R, Kane 2/24/09, as the working draft. 11:04:03 AM REPRESENTATIVE BUCH objected for discussion. 11:04:13 AM TIM CLARK, Staff, to Representative Bryce Edgmon, Alaska State Legislature, directed attention to Amendment 1, which will serve to bring the licensing fee schedule to a self-sustaining level. It will become essential, if the CS is adopted. 11:05:43 AM MR. CLARK proceeded to introduce CSHB 143, paraphrasing from the sponsor statement, which read as follows [original punctuation provided]: CSHB 143 (FSH) will ensure the continuation of Alaska's sport fish guide licensing and reporting program, which has proven beneficial to both the sport fishing industry and resource managers. Also, the amended license fee schedule included in the legislation will generate funding for the program to pay for itself. Legislation authorizing the program was passed in 2004 for a number of purposes. The Department of Fish & Game sought more comprehensive and credible information on guide numbers and guiding activities. The Department also wanted to create basic standards for sport fish business operators and guides, including minimum liability insurance coverage, first aid certification, and in some cases U.S. Coast Guard vessel licensing. Many stakeholders who were initially skeptical of these measures now acknowledge their role in advancing the guiding profession. This increased level of professionalism has helped raise the standing of the sport fish industry across the state. Many also agree that data collected through the program is an important tool in ADF&G's mission to develop and sustain healthy sport fisheries. The data is of great value not only to the Department's fisheries biologists but also to the Alaska Board of Fisheries, the International Pacific Halibut Commission, and the North Pacific Fishery Management Council. Sport fish data collection also contributes to Alaska's exemption from the recently instituted National Saltwater Angler Registry. NOAA exempts states from this federal registry and data collection system if they have programs in place to provide angler information. Sport fishers would otherwise be required by 2011 to purchase a certificate of registration for $15 to $25. Passing CSHB 143 (FSH) will permit the Department of Fish & Game to continue to foster high standards in Alaska's sport fishing industry. It will also enable the Department to carry on collecting important data for management decisions to benefit both fisheries resources and their stakeholders. And it will increase license revenues to a level that will allow the program to operate without need of a funding subsidy. 11:09:49 AM REPRESENTATIVE MUNOZ asked if the proposed raise in fees will offset the cost of the electronic log reporting program. MR. CLARK explained that such a system does not exist, although the department has indicated that it is considering implementing one. 11:10:49 AM REPRESENTATIVE MUNOZ pursued her interest regarding the intent of the department to upgrade the log program. 11:11:31 AM CHARLES SWANTON, Director, Division of Sport Fish, Alaska Department of Fish & Game (ADF&G), testified in support of CSHB 143. In response to Representative Munoz's question, he said that an electronic reporting system does not currently exist; however, Commissioner Lloyd has prioritized instituting a technologically based reporting system that includes the log program. One of the first steps to this goal is the point of sale license program. The component for this will be launched July, 2009, and is the precursor to electronic reporting. Time lines have been established to introduce further components, and the intent is to have a full system that will allow comprehensive data comparisons. Further, he said, the new fee structure will be adequate to make the program self supporting, although the complete costs of the electronic reporting program are not yet fully known. A portion of the fee structure could be utilized for this purpose, but no definitive decision has been made regarding the complete funding of this upgrade. 11:15:33 AM REPRESENTATIVE KELLER noted the general support for the fee structure to cover the cost of the program. With the new figures being proposed, he asked what benefits the user guides should expect to receive in exchange for the fee increase. MR. SWANTON related that a number of categories exist in the fee structure, such as owner/guide licenses versus guide only. There are about 1,600 businesses/guide combinations and approximately 2,000 guides who participate in the industry. Services relate primarily to data collection, that has a return benefit to the guides through the management process. REPRESENTATIVE KELLER opined that a program audit should be able to reveal accountability for specific return benefits to the user. MR. SWANTON explained that the associated costs are for program administration, printing/distribution of the log books, vessel licensing, and license decals. The current administration requires intensive data entry and information distribution, utilizing an antiquated, paper based system, he reported. 11:20:05 AM REPRESENTATIVE KAWASAKI asked if a fiscal note would be forthcoming. MR. CLARK responded that an updated fiscal note, formulated to provide a self supporting program relating to the CS, has not been distributed, and is relevant to the bill pending the adoption of Amendment 1 [which cannot be considered until the objection to adoption of CSHB 143 is removed]. 11:21:36 AM REPRESENTATIVE KAWASAKI established that there are approximately 1,600 licensees. MR. SWANTON reiterated that 1,600 is the combination of businesses/guides; guide registration averages 1,900. 11:22:07 AM REPRESENTATIVE KAWASAKI noted the highlights of the program as reported by the director, regarding the program's performance for the years leading to the sunset date. However, he pointed out the lack of tangible results and he asked the director to comment. MR. SWANTON relayed that prior to the inception of this bill concerns existed regarding the professional standards for guiding. Negotiability existed regarding the collection of comprehensive data, mandatory insurance, professional identification, and related practices for the industry. The program has allowed for business activity to be tracked, species harvest/catch data collection, and provided information utile to related management agencies for marine waters. 11:25:06 AM REPRESENTATIVE KAWASAKI acknowledged that the department is interested in creating/maintaining business standards. He questioned the fiscal responsibility for first aid certification and insurance coverage for operators. MR. SWANTON specified that the individual participants pay their own costs for these benefits. REPRESENTATIVE KAWASAKI inquired whether first aid training and insurance is mandated due to a regulation propagated by this bill. Further, he asked if the licensed operators are required to hold a business license as well. MR. SWANTON replied yes, they are required to hold a business license. REPRESENTATIVE KAWASAKI commented that the CS effectively doubles fee costs for small businessmen. He maintained his interest in knowing the original intent, and for accountability of the accomplishments gained during the five year life of the bill. To support the CS, he said, he would like to have the department demonstrate how the license fees have been/will be utilized in an efficient, effective manner, and without harm to the user. Basic mathematics indicates a fiscal note will be about $500,000, he estimated. 11:27:36 AM CHAIR EDGMON interjected that the bill is sponsored by the committee on behalf of the department, and based on departmental information. 11:27:59 AM MR. CLARK said that the program currently operates on deficit funding and the increased fee structure is not designed to bolster the program, but with the intent to have it operate in the black. 11:29:01 AM REPRESENTATIVE MUNOZ stated her support for repealing the sunset on the bill, however, she agreed with the previous committee member's comments, that an increase of the fees has not been substantiated. 11:29:40 AM REPRESENTATIVE MILLETT requested testimony from the guide associations as to what benefits they have gleaned, if any, from the original inception date of the bill. 11:30:08 AM REPRESENTATIVE JOHNSON expressed concern for where the bill resides in regard to the budget process, and whether a fiscal request has been made in a timely manner. MR. SWANTON explained that the budget shortfalls, to date, have been filled by funds acquired through the sale of fishing licenses and game harvest stamps. The intent of the department was to have this program be solvent, via a funding increase at the sunset anniversary. 11:33:09 AM REPRESENTATIVE JOHNSON asked what ADF&G programs were affected by the diversion of $500,000 to keep this program solvent. 11:34:45 AM REPRESENTATIVE MILLETT noted that the program has been operating in a deficit for five years, at the cost of $250,000 per year. MR. SWANTON said the amount has varied depending on the number of individuals participating, but the average has been approximately $175,000. The projection for FY 09-10 is about $200,000. MR. CLARK interjected that the revised fiscal note indicates an amount of just over $200,000, with the total operating costs of the program anticipated to be $462,000. [The appropriate fiscal note was made available to the committee (prior to the adoption of CSHB 143 and Amendment 1).] 11:36:55 AM MR. CLARK reiterated that this fiscal note relates to Amendment 1, and otherwise is not relevant to the CS. 11:38:47 AM REPRESENTATIVE JOHNSON reviewed the fiscal note and asked how it is being considered in the budget. MR. SWANTON explained that the request from the department for FY 10 will cover the existing shortfall. An increase of fees will apply to the FY 11 budget. 11:42:45 AM CHAIR EDGMON acknowledged that confusion exists regarding the fiscal note. The bill will be brought back before the committee, with more clarity, he said. REPRESENTATIVE BUCH asked to have information provided regarding impacts to the budget, and budget requests reflected by the sunset of this bill, as well as the updated fiscal note. 11:44:53 AM DICK ERKENEFF, Member, Board of Directors, Kenai River Sportfishing Association, Incorporated, stated that the Kenai River Sportfishing Association officially supports CSHB 143. He said that the guide management program is essential, and should continue without sunset. The bill provides sport fishing guides with minimal standards that are important to the industry, as well as gathers essential data for the continued management of the industry. The timeliness of the data is an issue, and setting up the electronic reporting component is also supported by the association. 11:47:54 AM REPRESENTATIVE MILLETT noted that the association letter of support was written prior to the fee increase to $200.00, and asked if that has changed membership opinion of the bill. MR. ERKENEFF said no, the membership still stands in firm support of the bill. 11:48:38 AM RICK SIKMA stated opposition to CSHB 143, and reported that many guides will have a difficult time meeting the raised fees, given the overall operational costs. CHAIR EDGMON closed public testimony, and stated that the bill would be held. 11:50:11 AM HCR 6-COOK INLET SALMON TASK FORCE 11:50:40 AM CHAIR EDGMON announced that the final order of business would be HOUSE CONCURRENT RESOLUTION NO. 6, Recreating the Cook Inlet Salmon Task Force as a joint legislative task force. 11:50:42 AM REPRESENTATIVE CRAIG JOHNSON introduced HCR 6 as an extension of the Cook Inlet Salmon Task Force, which originally formed due to constituent complaints. The task force had a specific mission: to investigate the causes of low salmon returns to the Cook Inlet area. He reported that the task force met four times, without conclusive results. 11:52:13 AM REPRESENTATIVE MILLETT moved to adopt committee substitute (CS) for HCR 6, Version 26-LS0395\E, Kane, 2/4/09, as the working document. 11:52:22 AM CHAIR EDGMON objected for discussion. 11:52:26 AM REPRESENTATIVE JOHNSON said that the CS adds public members to the task force, in concert with the legislative members. Community participation will be further encouraged by integrating the publicly appointed members. The task force will be reduced in size by this action, but the expectation is to have private sector representation from commercial and sport fishing entities. He opined that recreating this body as a joint task force will provide a means to avoid continued pit falls, allow a neutral stance to address issues, and opined "I think we would be ahead of the game." 11:55:24 AM CHAIR EDGMON announced that the bill would be held for further review, and public testimony. ADJOURNMENT  There being no further business before the committee, the House Special Committee on Fisheries meeting was adjourned at 11:56 a.m.