Legislature(2023 - 2024)GRUENBERG 120
03/07/2024 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| HB295 | |
| SJR14 | |
| HB329 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SJR 14 | TELECONFERENCED | |
| += | HB 329 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 295 | TELECONFERENCED | |
HB 329-AQUATIC FARM AND HATCHERY LEASES
10:19:18 AM
VICE CHAIR MCCABE announced that the final order of business
would be HOUSE BILL NO. 329, "An Act relating to state tideland
leases; and relating to aquatic farming or related hatchery
operation site leases."
10:19:29 AM
CHAIR VANCE, as prime sponsor, presented HB 329. She read from
the sponsor statement [included in the committee packet], which
read as follows [original punctuation provided]:
House Bill 329 promises to provide a significant boost
to Alaska's aquatic farming industry, known as
mariculture. This legislation has the potential to
bolster the state's economy, help preserve its
environment, and enrich its coastal communities by
streamlining the tideland lease process and extending
lease durations to up to 25 years.
Mariculture, the cultivation of marine shellfish and
aquatic plants, stands as a beacon of sustainable
economic growth for Alaska. Mariculture not only
generates employment opportunities across various
sectors but also injects vitality into coastal
communities. The industry fosters commerce, both
domestically and internationally, while nurturing a
vibrant ecosystem in Alaska's pristine waters.
One of the key features of HB 329 is the
simplification of the lease acquisition process.
Currently, prospective mariculturists endure a lengthy
multi-agency application and review process which
generally takes years to complete. This bureaucratic
hurdle often deters potential farmers from entering
the industry. HB 329 aims to lessen this burden by
enabling quicker access to tidelands, enabling farmers
to concentrate more on farming and less on paperwork.
Moreover, the extension of the lease duration to 25
years provides for long-term stability for
mariculturists and encourages sustained investment in
the industry. This stability is crucial for the
development of robust mariculture operations, which
contribute significantly to Alaska's economic
diversification.
The environmental benefits of mariculture are also
noteworthy. Shellfish and seaweed play a vital role in
maintaining water quality by filtering out pollutants
and excess nutrients. They provide essential habitat
for diverse marine life and help mitigate ocean
acidificationa pressing concern.
Furthermore, mariculture aligns with Alaska's rich
cultural heritage, complementing existing traditions
and customs in coastal communities. By promoting the
sustainable utilization of marine resources,
mariculture strengthens the bond between Alaskans and
their natural surroundings.
With HB 329 paving the way for a more supportive
regulatory framework, Alaska's mariculture industry is
poised to flourish, creating jobs, stimulating
commerce, and safeguarding the state's precious marine
ecosystems. As stakeholders rally behind this
initiative, Alaska's coastal communities stand to reap
the benefits of a thriving and sustainable mariculture
sector for generations to come.
10:25:48 AM
JAKE ALMEIDA, Staff, Representative Sarah Vance, Alaska State
Legislature, on behalf of Representative Vance, prime sponsor,
gave the sectional analysis for HB 329 [included in the
committee packet], which read as follows [original punctuation
provided]:
Section 1: Amends AS 38.05.081(a) to include the
phrase "Except as provided in (n) of this section,"
which sets the limitation on the commissioner that
state tideland may not be leased to a person solely
for carbon management purposes.
Section 2: Amends AS 38.05.081 to include Paragraph
(n) which will limit the Commissioner of the
Department of Natural Resources from leasing out state
tidelands solely for carbon sequestration purposes.
Section 3: Amends AS 38.05.083(c) to remove the
requirement that an aquatic farming or related
hatchery operations lease be for not "less than the
appraised fair market value of the lease" and replaces
the requirement that said negotiations would be
"subject to appraisal under AS 38.05.840 only if the
commissioner determines in writing that the site is
subject to appraisal under AS 38.05.840." AS
38.05.840(a) in part states that land "may not be sold
or leased for less than the approved, appraised market
value?." This change would remove the requirement to
have the land appraised every five years.
Section 4: Amends AS 38.05.083 (f) to include new
subsections (1) and (2). Section (1) maintains the
current requirement that the commissioner adopt
regulations that "provide for the consideration of
whether the proposed use of a site is compatible with
the traditional and existing uses of the area."
Section (2) changes the current requirement for the
consideration of upland management policies when the
commissioner regulates under this section into an
option to consider those policies.
Section 5: Amends AS 38.05.083 by adding new
subsections (j) (n).
(j) sets AS 38.05.073(m) as the framework for
compensation paid for the tideland leases. Which, in
the discretion of the commissioner, includes:
(1) a percentage of the annual gross receipts?;
(2) a guaranteed annual minimum rent or a percentage
of gross receipts, whichever is greater;
(3) the fair market rental value;
(4) a fixed annual rent that is not less than the fair
market rental value of the land;
(5) a fee for each user;
(6) other compensation acceptable to the commissioner;
or
(7) a combination of the above.
(k) gives the commissioner some discretion to
determine whether a site should be subject to a survey
under 22 AS 38.04.045.
(l) gives a preference to the lessee to release the
site, but does not give a preference to purchase the
site under AS 38.05.102.
(m) Sets the requirement that a site leased under this
section be used for a hatchery for aquatic plants or
shellfish or the commercial production of an aquatic
farm product.
(n) Allows the director, with the approval of the
commissioner, to negotiate a lease for a period of up
to 25 years.
Section 6: Amends the uncodified law of the State of
Alaska by adding a new section to make it clear that
Sections 1 and 2 of this legislation only apply to a
lease or renewal of state tideland for carbon
management purposes entered into on or after the
effective date of this Act.
10:28:43 AM
REPRESENTATIVE STUTES, questioning the compilation of the fiscal
note, mentioned the decrease in staff time that would be
required due to extensions of the lease renewals and the loss of
revenue based on that. She inquired where the loss of revenue
accounts for the decrease in the labor involved or not involved
anymore.
10:29:52 AM
KATE DUFAULT, Program Manager, Aquatic Farms Leasing Program,
Division of Mining, Land & Water, Department of Natural
Resources, answered that the revenue losses were solely based on
the loss of application fees that were received for the
renewals. She clarified that lengthening the term resulted in
the loss of renewal application revenue.
REPRESENTATIVE STUTES reiterated that she looked at accounting
for labor and staff time and she did not see where that was
applied to the loss of revenue for the extension of the lease.
MS. DUFAULT agreed and said staff time would be used for other
adjudication tasks for other existing leases.
10:31:34 AM
CHAIR VANCE requested further clarification of the equation in
regard to staff time and loss of revenue.
10:32:10 AM
VICE CHAIR MCCABE opined that the bill would reduce the size of
government.
REPRESENTATIVE HIMSCHOOT asked whether there was a review of the
operation to make sure that it is biologically sound.
MS. DUFAULT responded that appraisals are not needed under
current statute for aquatic leases.
10:34:06 AM
VICE CHAIR MCCABE asked whether the Alaska Department of Fish
and Game (ADF&G) did an inspection or approval or "certificate
of good health."
MS. DUFAULT explained that ADF&G conducts an on-bottom survey if
an applicant is proposing to use on-bottom rearing structures,
otherwise, the department does not do an inspection of the lease
prior to it being authorized.
10:35:18 AM
JASON LESSARD, Executive Director, Alaska Mariculture Alliance
(AMA), provided a brief background on AMA and noted the many
communities and organizations with which they are involved. He
noted that this new industry would provide opportunities that
would have long-term benefits for the state and transformational
potential at the community level. He said rules developed for
different industries do not always apply to new industries, and
requirements for farm leases in Alaska are an example of that.
He provided suggestions for changes to statute and said that he
looked forward to working with the committee. In reference to
future revisions, he stated that AMA stands ready to engage in
crafting language that works better for everyone.
10:39:11 AM
REPRESENTATIVE HIMSCHOOT said she was told that in Southeast
Alaska the permitting process had been smooth, but the issue was
more with the Army Corps [of Engineers], and she asked Mr.
Lessard if he could speak to that.
MR. LESSARD answered that he was unable to speak to the inquiry;
however, he would get back to the committee after speaking with
membership.
10:40:13 AM
REPRESENTATIVE CARPENTER asked whether it would be feasible to
do a renewal for up to 25 years after the first renewal was up.
MR. LESSARD affirmed that AMA was open to looking at all options
and was not fully opposed to 25 years. He added that the lease
must be put to productive use, as these are public waters.
REPRESENTATIVE CARPENTER restated that he was looking for an
alternative to the language that would acknowledge not locking
up tidal waters too soon prior to knowing whether the operation
was successful. He questioned whether 25 years was a valid
compromise.
MR. LESSARD opined there was some merit to the suggestion, and
there was much good that could come out of it such as further
guarantees to get financing. He reiterated the leases must be
used properly and that locals must not be "shouldered out" of
the process.
10:43:37 AM
PAUL FUHS, President, Alaska Shellfish Growers Cooperative;,
Adak Community Development Corporation, stated that aquatic
farming was an area where Alaska's economy could really
diversify and grow. With any economic development, he
explained, you must have site control and leases must be stable.
He expounded on lease term lengths and the results that could
occur, and he provided pictures of geoduck noting the length of
time it takes to mature, which comes into play with extending
leases. He agreed that 25 years was a good time period, but 20
years would be acceptable as well. He said there are current
regulations that state you must sell a certain amount, or the
lease can be cancelled. He added there are various reasons why
harvesting cannot be successful from year to year. He suggested
to the committee that "farming" should be defined in statute,
and he offered to provide a draft list. He further noted the
Aleutian Islands should be included in the bill, as he opined
"it is a tremendous area."
10:49:52 AM
REPRESENTATIVE STUTES commented on amendments and that "the
department" 100 percent supported the inclusion of the Aleutian
Islands.
10:50:22 AM
The committee took a brief at-ease at 10:50 a.m.
10:50:36 AM
NICK MANGINI, Mariculture Director, Southwest Alaska Municipal
Conference, related that he supported HB 329 and that he had
been a farmer since 2016. He said the lease term extensions
would help with loans and getting funding, but most importantly,
access to the water must be kept and rural Alaskans must have
access to the coast. He said kelp in particular had an uphill
battle being it was also competing with waterfront property to
do all the processing, and the bill would reduce this
competition and allow farmers to have the water they need.
10:54:06 AM
VICE CHAIR MCCABE opened public testimony on HB 329.
LEONARDO WASSILIE, representing self, testified that he
supported mariculture and when he first read the bill, he was
alarmed about the definition of "aqua". He added it could be
defined in different ways depending on the agency. He pointed
out people want leases they can rely on, and he suggested
automatic renewals. He reiterated that the language could be
defined better.
10:57:26 AM
ALEXANDRA MEYER, Mariculture Manager, Alaska Ocean Farms, LLC,
related that she had been farming since 2018 and had multiple
leases, some of which are not being used, since there was not a
market for kelp. She gave examples of time frames surrounding
leases and when one can begin farming and, in addition,
reinvesting back into the operation which does not allow a lot
of time. She said she supported the amendments and would be
willing to work with the committee on the bill and its
iterations.
11:00:13 AM
REPRESENTATIVE CARPENTER acknowledged growth challenges as a new
farmer, as well as the marketing. He asked Ms. Meyer why she
commented that there was no market for kelp.
MS. MEYER responded that there are small markets and a handful
of buyers, and that more people are growing kelp than there are
markets. She stressed it was something they were working on,
and she pointed out the risks and that it took time. She
expressed that she needed assurance so Alaska Ocean Farms, LLC
can continue to help build the industry.
11:01:49 AM
MARGO REVEIL, Jakolof Bay Oyster Company, testified on behalf of
Jakolof Bay Oyster Company. She shared that she hadn't had time
to read the bill in its entirety and she would have more
questions than opinions. She questioned excluding hatcheries or
nurseries from commercial use requirements, as anyone with a
bucket of seawater can call themselves a hatchery, especially
with regard to aquatic plants. She opined the state should be
enforcing the existing commercial use requirements, not provide
loopholes. She mentioned derelict farms as being an issue and
said she supported preference for functioning farms. She
further supported the idea of the [lease] renewal being longer.
11:04:03 AM
NANCY HILLSTRAND, Owner, Pioneer Alaskan Fisheries, noted the
strict regulations her business has and being responsible for
its actions. She said her permits can be pulled each year for
noncompliance. She opined that HB 329 would remove tide land
from the public without adequate oversight of impacts over time
if there is a 25-year time frame, and she expressed her belief
that there should be more oversight and monitoring. She added
that there should be more viewpoints and added counsel to the
committee before the bill moved. She stressed to keep large
industries out so small farms can have a chance.
11:07:51 AM
BRIANA MURPHY, Chugach Regional Resources Commission, provided a
professional background and, on behalf of her business, said she
did not support the bill's amendment to extend the lease terms.
She opined it would be detrimental to new leases where
businesses already face challenging hurdles. She further added
that she did not want to see the industry move ahead without
consultation and representation from tribal communities.
11:10:01 AM
VICE CHAIR MCCABE, after ascertaining no one else wished to
testify, closed public testimony on HB 329.
[Vice Chair McCabe passed the gavel back to Chair Vance.]
11:10:31 AM
CHAIR VANCE addressed comments that came up. She noted the wait
for approval from the Department of Natural Resources (DNR) was
a common complaint received from growers. She offered her
understanding that their regulations were compiled with a larger
regulation package which have been awaiting approval, and this
was out of the reach of the legislature; however, her proposed
legislation looked to the future. She read language from page
2, line 26, which also referenced other definitions and statute
that did not change. She said she would continue to have
conversations with DNR and growers.
11:13:53 AM
REPRESENTATIVE MCCORMICK commented that bureaucracy sometimes
keeps food off people's tables. He expressed reservation
relating to what the proposed legislation would mean to
scientific scrutiny on some of the projects and application
processes. He noted the delicate nature of Alaska's ecosystems.
CHAIR VANCE responded that the bill would not change any
process; it dealt with leases and removal of the requirement for
the fair market appraisal every five years, which was seen as
unnecessary. Because of food security, she included language on
page 2, which related to policy on property.
11:16:50 AM
REPRESENTATIVE C. JOHNSON inquired about any provisions for
subleases from the leaseholder.
CHAIR VANCE offered her understanding the department did not
allow subleasing.
MR. ALMEIDA added that as the bill was drafted, the department
would be allowed to include that scenario.
11:18:14 AM
REPRESENTATIVE C. JOHNSON restated his inquiry.
MS. DUFAULT responded that the department was able to sublease
aquatic farm leases, but she had not received a request yet.
She offered to research and provide the information in writing.
REPRESENTATIVE C. JOHNSON stressed that he was more interested
in the leaseholder being able to sublease, not the department.
MS. DUFAULT confirmed that any request for a sublease would need
the department's approval.
11:20:03 AM
REPRESENTATIVE CARPENTER commented that marketing would be an
economy of scale problem for those starting out. The timeframes
for leases are crucial to get right to prevent small operators
from getting squeezed out, he said.
11:22:09 AM
REPRESENTATIVE HIMSCHOOT referred to page 2, Section 4,
regarding the proposed use of the site. She expressed her
concern with existing fisheries.
CHAIR VANCE replied that it was part of considerations that the
commissioner must make when deciding whether or not to permit a
lease.
REPRESENTATIVE HIMSCHOOT commented that seasonality may also be
an issue.
CHAIR VANCE noted there are conversations between other growers
and fishermen and people are "trying to be good neighbors" in
terms of tide lands.
11:24:21 AM
MS. DUFAULT added that the department already considered
traditional and existing uses of the site under their
regulations.
11:25:08 AM
REPRESENTATIVE MCCABE announced that HB 329 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 295 - Proposed CS v.S.pdf |
HFSH 3/7/2024 10:00:00 AM |
HB 295 |
| HB295 - Supporting Document Statutes and Regulations.pdf |
HFSH 3/7/2024 10:00:00 AM SRES 5/10/2024 3:30:00 PM |
HB 295 |
| HB295 - Supporting Document ADFG Lake Stocking Policy.pdf |
HFSH 3/7/2024 10:00:00 AM SRES 5/10/2024 3:30:00 PM |
HB 295 |
| HB 329 - Sponsor Statement.pdf |
HFSH 3/7/2024 10:00:00 AM |
HB 329 |
| HB 329 - v.R.pdf |
HFSH 3/7/2024 10:00:00 AM |
HB 329 |
| HB 329 - Sectional Analysis.pdf |
HFSH 3/7/2024 10:00:00 AM |
HB 329 |
| HB 329 - DMLW-DNR Fiscal Note (02-23-24).pdf |
HFSH 3/7/2024 10:00:00 AM |
HB 329 |