Legislature(2019 - 2020)SENATE FINANCE 532
03/24/2020 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB197 | |
| HB41 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 247 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 41 | TELECONFERENCED | |
| += | HB 197 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
March 24, 2020
9:33 a.m.
9:33:52 AM
CALL TO ORDER
Co-Chair von Imhof called the Senate Finance Committee
meeting to order at 9:33 a.m.
MEMBERS PRESENT
Senator Natasha von Imhof, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Lyman Hoffman
Senator Donny Olson
Senator Bill Wielechowski
Senator David Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Dan Ortiz, Sponsor; David Scott, Staff,
Senator Bert Stedman.
PRESENT VIA TELECONFERENCE
Jeremy Woodrow, Executive Director, Alaska Seafood
Marketing Institute; Sam Rabung, Commercial Fisheries
Division, Alaska Department of Fish and Game; Christy
Colles, Chief of Operations, Division of Mining Land and
Water, Department of Natural Resources.
SUMMARY
HB 41 SHELLFISH PROJECTS; HATCHERIES; FEES
HB 41 was HEARD and HELD in committee for further
consideration.
HB 197 EXTEND SEISMIC HAZARDS SAFETY COMMISSION
HB 197 was REPORTED out of committee with a "do
pass" recommendation and with one previously
published fiscal impact note: FN 1(DNR).
HB 247 SPORT FISHING ENHANCEMENT SURCHARGE
HB 247 was SCHEDULED but not HEARD.
Co-Chair Stedman discussed the agenda for the day. Both
items on the agenda were bills previously heard. He thought
the committee would recess and come back in the afternoon
to consider HB 247.
HOUSE BILL NO. 197
"An Act extending the Alaska Seismic Hazards Safety
Commission; and providing for an effective date."
9:34:47 AM
Co-Chair Stedman relayed that the committee had heard the
bill on March 19, 2020 and had heard public testimony. He
asked the committee if members had any further concerns.
Senator Wielechowski MOVED to report HB 197 out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 197 was REPORTED out of committee with a "do pass"
recommendation and with one previously published fiscal
impact note: FN 1(DNR).
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."
9:36:04 AM
Co-Chair Stedman recalled that the first bill hearing and
public testimony had been on February 2, 2020. He invited
the sponsor to the table.
REPRESENTATIVE DAN ORTIZ, SPONSOR, discussed the bill. He
reminded that the bill was an enhancement of the state's
shellfish industry. He read from a Sponsor Statement (copy
on file):
Enhancement of Alaska's shellfish industry holds the
potential of expanded economic opportunities in
Alaska's coastal communities and increased resilience
of the State's fisheries portfolio.
To tap this potential House Bill 41 allows qualified
non-profits to pursue enhancement and/or restoration
projects involving shellfish species including red and
blue king crab, sea cucumber, abalone, and razor
clams.
The bill creates a regulatory framework with which the
Department of Fish & Game can manage shellfish
enhancement projects and outlines criteria for
issuance of permits. It sets out stringent safety
standards to ensure sustainability and health of
existing natural stocks. The commissioner of ADF&G
must also make a determination of substantial public
benefit before a project can proceed.
In addition, the bill allows the Department of Fish &
Game to set the application fee for a shellfish
enhancement project permit and grants the similar
authority over the application fee for a salmon
enhancement project permit.
House Bill 41 plays 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 relayed that there was a Committee
Substitute (CS) for the committee to consider.
9:38:46 AM
AT EASE
9:38:49 AM
RECONVENED
Senator Hoffman MOVED to ADOPT proposed committee
substitute for CSHB 41(FIN), Work Draft 31-LS0218\O
(Bullard, 11/19/19).
Co-Chair Stedman OBJECTED for discussion.
DAVID SCOTT, STAFF, SENATOR BERT STEDMAN, discussed a
document entitled "Abridged Sectional" (copy on file). He
highlighted changes in the CS. Section 7 through Section 10
of the bill would allow the Alaska Seafood Marketing
Institute (ASMI) to market aquatic farm products. Section
13 dealt with an annual report from the Department of
Natural Resources (DNR) to the legislature dealing with
aquatic farm leases and the lease status. He continued that
Section 14 through Section 17 dealt with lease renewal in
DNR. The sections had been brought to the legislature by
DNR the previous year and were the subject of another bill,
HB 116. He noted that Section 17 allowed for eco-tourism
and education on aquatic farming permits.
Mr. Scott continued to address changes to the bill outlined
in the Abridged Sectional document. He relayed that Section
17 also had a clause that allowed a one-year time limit for
DNR to grant or deny a lease application. He explained that
the department had expressed concerns with the provision
and there would be a forthcoming conceptual amendment to
address the matter if it was the will of the committee.
Section 21 was in uncodified law and asked for a one-time
report from DNR and the Department of Fish and Game to give
recommendations on how to streamline the permitting
process.
9:41:56 AM
Senator Wielechowski asked for a definition of aquatic farm
products.
Mr. Scott read that the definition could be found in AS
16.40.199:
2) "aquatic farm product" means an aquatic plant or
shellfish, or part of an aquatic plant or shellfish,
that is propagated, farmed, or cultivated in an
aquatic farm and sold or offered for sale;
Senator Wielechowski wanted to ensure that the bill had
nothing to do with farming salmon.
Mr. Scott stated that the bill did not address fin-fish
farming, which was still prohibited in Alaska as per AS
16.40.210.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, the CS for CSHB 41(FIN), Version O was
ADOPTED.
Co-Chair Stedman reminded that the committee would set the
bill aside to address any questions members might have and
consider any forthcoming amendments.
9:44:25 AM
Mr. Scott reviewed the Sectional Analysis (copy on file):
Section 1 The Board of Fish may direct the department
to manage enhanced shellfish stocks for cost recovery
projects.
Section 2 Hatchery permit application fee change.
Section 3 Conforms with Sec. 2. Hatchery permit
application fee will be set by regulation equal to
regulatory costs. Fee level will be annually reviewed.
Section 4 Adds a new Chapter to Title 16
? AS 16.12.010 Commissioner of ADF&G may issue
permits for nonprofit corporation for a shellfish
enhancement project. Section includes permitting
process, rules, and fees.
? AS 16.12.020 Prior to permit approval, there
will be public notification, a public hearing,
and comment period.
? AS 16.12.030 Requirements on permit holders.
? AS 16.12.040 Permit revocation, suspension, or
alteration.
? AS 16.12.050 Enhanced shellfish stocks are
common property. Board of Fish may regulate.
? AS 16.12.060 ADF&G shall advise and assist
applicants and permit holders to a reasonable and
appropriate extent.
? AS 16.12.070 ADF&G shall approve source and
number of shellfish taken for brood stock.
? AS 16.12.080 Limits proceeds from sale of
shellfish to operating costs, shellfish
enhancement projects, and shellfish research
? AS 16.12.090 Cost recovery fisheries via
contract or common property fishery.
? AS 16.12.100 ADF&G can inspect project facility
at any time.
? AS 16.12.110 Annual Report
? AS 16.12.199 Definitions
Mr. Scott continued to address the Sectional Analysis:
Section 5 CFEC may issue special harvest area entry
permits to AS 16.12 permit holders.
Section 6 Fishing gear used in a special harvest area
must be authorized by the Board of Fish.
Section 7 Allows aquatic farm products to be marketed
by ASMI.
Senator Hoffman asked about funding for marketing aquatic
farm products. He noted that fishermen taxed themselves and
gave funds to ASMI for marketing fish. He asked how the
marketing promotions of aquatic farm products would be
funded.
Mr. Scott stated that the topic had come up in discussion
with ASMI. He furthered that ASMI believed there would need
to be a self-assessment related to the new permits proposed
in the bill.
Co-Chair Stedman asked to continue going through the bill
before hearing from ASMI and considering an amendment.
9:50:31 AM
Mr. Scott continued to address the Sectional Analysis:
Section 8 Conforms to Section 7.
Section 9 Conforms to Section 7.
Section 10 Adds aquatic farm products to ASMI's
definitions.
Section 11 Exempts shellfish raised under a AS 16.12
permit from the farmed fish food labeling requirement.
Section 12 Adds hatchery permit fees & AS 16.12 permit
fees to list of Program Receipts.
Section 13 DNR Annual report to the legislature on
aquatic farming lease status and lease applications
under AS 38.05.083.
Section 14 Adds AS 38.05.083 leases to eligible list
of leases that the Director of the Division of Mining,
Land, & Water may renew.
Section 15 Conforms to Section 14.
Section 16 Conforms to Section 14.
Section 17 Allows Commissioner of DNR to renew or
extend AS 38.05.083 leases. Establishes a 1-year time
limit to grant or deny a lease application. Ecotourism
and educational uses are not prohibited. Prohibits DNR
from charging additional use fees other than the
permit fee.
Section 18 Nonprofit Income Tax exemption for AS 16.12
permit holders.
Mr. Scott spoke to Section 17 and explained that there was
a number of aquatic farmers in Southeast Alaska that were
finding interest from tourism. He furthered that the Alaska
Sea Grant program was interested in bringing high school
and college students to aquatic farm sites, which was not
currently allowed. Another provision in Section 17 would
prohibit DNR from charging additional use fees.
9:54:49 AM
Mr. Scott continued to address the Sectional Analysis:
Section 18 Nonprofit Income Tax exemption for AS 16.12
permit holders.
Section 19 Nonprofit Income Tax exemption for AS 16.12
permit holders. Duplicated to conform with the AS
43.20.012(a) sunset and reenactment (SB 83 2013).
Section 20 Seafood Development Tax exemption for
shellfish harvested under a CFEC special harvest area
permit.
Section 21 DNR and ADF&G report and recommendations
for permitting process improvements.
Section 22 Applicability of Section 2.
Section 23 ADF&G authority to adopt regulations.
Section 24 Immediate effective date for Section 23.
Section 25 Effective date of 1-year time limit,
Section 17.
Section 26 Delayed effective date for Section 19.
Mr. Scott noted that there was an amendment to remove sub-
paragraph 3 on page 17, lines 11 through 13.
9:57:31 AM
Co-Chair Stedman opened up the meeting for questions. He
referenced Senator Hoffman's earlier question about funding
for marketing.
Senator Hoffman reiterated that salmon fishermen taxed
themselves to fund promotions by ASMI. He did not think the
fishermen should subsidize any other marketing. He asked
why the bill would give ASMI the authority for marketing of
shellfish when there was no revenue to do so. He asked
where the funds would come from.
JEREMY WOODROW, EXECUTIVE DIRECTOR, ALASKA SEAFOOD
MARKETING INSTITUTE (via teleconference), thought Senator
Hoffman had brought up a great question and informed that
the topic had been discussed at length. He pointed out that
that the ASMI bylaws clearly stated that priority was given
to those that paid into the voluntary self-assessment, and
priority would continue to be given to the wild-capture
fisheries that paid into the assessment. When the bill had
been brought to ASMI the previous year there had been
discussions with the Mariculture Task Force about what the
industry needed. It was such a small industry that there
was not much to self-assess. The ASMI Board had agreed that
it made sense to change the statutes without a funding
mechanism in place, knowing that there were numerous
opportunities for federal grants to help with marketing.
10:00:34 AM
Senator Hoffman asked if there would be an objection if
there were a change in the bill to signify that the funds
charged by the salmon industry would not be used for
shellfish marketing.
Mr. Woodrow thought Senator Hoffman was discussing a
"tricky area" based on how ASMI currently used its funding.
He shared that currently ASMI did not divvy up the funding
for different species that paid in. He furthered that about
50 percent of ASMI's assessment was comprised of pollack
and salmon, but 50 percent of efforts did not go towards
the two species alone. He thought the matter needed to come
before the ASMI Board.
Senator Hoffman wanted to consult with the fishermen in
Bristol Bay to see if they agreed with Mr. Woodrow's
assessment. He assumed the response would be negative.
Co-Chair Stedman asked if ASMI members had been involved in
discussion on the subject, and if there was documentation
of support.
Mr. Woodrow relayed that the bill was brought forth to the
board on November 21, 2019. There had been a motion passed
unanimously that supported change to ASMI statutes to
include powers to market aquatic farm products. The board
was supportive of the current version of the bill.
Senator Hoffman questioned whether salmon fishermen in the
state would support the version of the bill, or if they
would rather have their taxes excluded for use in marketing
shellfish. He asked if ASMI had received feedback from any
of the numerous salmon fisheries associations in the state.
Mr. Woodrow relayed that ASMI had not reached out to salmon
associations specifically. He was happy to reach out to a
couple of the groups to get input.
10:04:01 AM
Senator Wielechowski asked about page 3, line 5; which
related to augmenting the yield and harvest of shellfish
indigenous to state water. He asked if the bill allowed for
shellfish indigenous to one part of the state to be
transferred to another part of the state.
SAM RABUNG, COMMERCIAL FISHERIES DIVISION, ALASKA
DEPARTMENT OF FISH AND GAME (via teleconference), informed
that Department of Fish and Game (DFG) had a genetic policy
that applied to fin fish, that prohibited the transport of
indigenous stocks around the state; and the department
required the use of local stocks. The rule was applied to
all species excepting the geoduck, which was allowed to be
transported contiguous to the Gulf of Alaska.
Senator Wielechowski asked if any of the scientists or
biologists at DFG had expressed any concerns over the bill.
Mr. Rabung stated that there had been some concerns only to
ensure that safeguards were in place. He emphasized that
every time there was a permit application it would be
reviewed by biologists, pathologists, and geneticists
before a recommendation was made to the commissioner on
whether to approve the permit or not. He reminded that
permits were issued on a case by case basis, based on the
appropriateness of the plan.
Co-Chair Stedman asked if DFG had a position on the bill.
Mr. Rabung replied that he had been told by the
administration that the department was neutral.
Senator Wielechowski asked if Mr. Rabung believed DFG had
the resources and tools available to ensure that native
species in the area would be protected and the changes
proposed would not harm the local ecosystem.
Mr. Rabung affirmed that the safety of the ecosystem and
local species would be the main charge of the department in
consideration of each application that was submitted, as
when other permits were issued. He stated that aquatic
farming currently allowed for culturing of the organisms
around the state under positive control.
10:08:00 AM
Senator Wilson asked if there was anyone from Department of
Environmental Conservation (DEC) available for questions.
Co-Chair Stedman observed that there was not.
Senator Wilson recalled that DEC did the testing for
shellfish. He thought it would be hard to determine the
revenues from the industry. He thought if the shellfish
industry was worried about paying for testing, he was
concerned about affordability, marketing, and continuation
of the industry.
Representative Ortiz thought the funding aspect of testing
and permitting had received much attention and discussion.
He reminded that the industry was just beginning, and the
overall sentiment was that the state needed to be a
facilitator in the process. He thought the prospects for
the industry were limitless, but the state needed to
provide the regulatory framework to get the industry up and
running. He thought there was no question that once the
industry was up and running, the businesses would have
sufficient revenue to be active participants in self-
assessment and pay into the process.
Representative Ortiz continued his remarks. He thought in
the initial phase there was recognition by all parties that
the state needed to be onboard wherever possible to get the
industry up and running. He thought the support might
include some initial monetary outlay that would likely be
covered by the industry in the future.
Senator Wilson wanted to emphasize the complexity of the
industry, which he thought touched on four or five state
agencies.
Representative Ortiz thought there might be someone from
the Mariculture Task Force to add to the discussion.
Co-Chair Stedman thought there would be time to discuss
matters with the bill sponsor and the department before the
bill was brought back to committee.
10:12:45 AM
AT EASE
10:13:32 AM
RECONVENED
Co-Chair Stedman relayed that the sponsor would leave the
meeting and his staff would speak to the bill.
Senator Bishop MOVED to ADOPT Conceptual Amendment 1.
Co-Chair Stedman OBJECTED for discussion.
10:14:28 AM
AT EASE
10:15:04 AM
RECONVENED
Mr. Scott spoke to Conceptual Amendment 1:
1 Page 2, line 23, following "actual"
2 DELETE "regulatory"
3 INSERT "permit application processing"
4
5 Page 2, line 25, following "department's"
6 DELETE "regulatory"
7
8 Page 5, line 28, following "source of"
9 INSERT "wild"
10
11 Page 14, lines 30, following "lease"
12 DELETE "under this section, AS 38.05.075, or
38.05.801"
13
14 Page 15, lines 19-22
15 DELETE ALL MATERIAL
16
17 Page 17, lines 10, following ";" through line 13
18 DELETE ALL MATERIAL
19 INSERT "and"
20 Renumber sections accordingly
Mr. Scott explained that there were six amendments within
the conceptual amendment. He noted that all the changes
reflected in the amendment were at the request of DFG and
DNR. He mentioned a proposed change that would affect the
renewal process for aquatic farm permits and would be
identical to language in HB 116 [a bill related to the
renewal or extension of site leases for aquatic farming and
aquatic plant and shellfish hatchery operations].
Co-Chair Stedman WITHDREW his OBJECTION.
Senator Wielechowski was curious if the proposed amendment
would have an impact on the fiscal notes.
Mr. Scott stated that if the fifth part of the amendment
did not go through, there would be a large fiscal note.
Co-Chair Stedman asked for more detail.
Mr. Scott relayed that the section would require DNR and
the permitting staff to deny or approve an 083 permit and
additional staff would be required to meet a timeline set
by the legislature.
Senator Wielechowski thought a year seemed like a long time
to approve or deny a permit request.
Mr. Rabung stated that the portion of the bill pertained to
DNR.
10:20:33 AM
CHRISTY COLLES, CHIEF OF OPERATIONS, DIVISION OF MINING
LAND AND WATER, DEPARTMENT OF NATURAL RESOURCES (via
teleconference), spoke to Senator Wielechowski's question.
She acknowledged that the department had a significant
backlog of applications, and there was a required public
process component which took quite a bit of time. She
continued that the department recently got two new
adjudicators to review applications. She continued that
once the backlog was diminished, the process would be more
timely. The time frame was concerning because if the
department could not meet the public process requirement,
it would then be forced the deny the application to meet
the deadline.
Senator Wielechowski wondered if there was fiscal impact
from the first change outlined in Conceptual Amendment 1,
which would delete the word "regulatory" and insert the
words "permit application processing."
Mr. Rabung thought there should not be any fiscal impact
from the proposed change. The department had requested the
change because the term "regulatory" could be broadly
interpreted to mean things other than the application
process.
Co-Chair Stedman WITHDREW his OBJECTION. There being NO
further OBJECTION, Conceptual Amendment 1 was ADOPTED.
Senator Hoffman MOVED to ADOPT a conceptual amendment. He
wanted to insert wording to say that ASMI may only use
grant funds to market the enhancement of aquatic shellfish.
Co-Chair Stedman OBJECTED for discussion.
Co-Chair Stedman explained that the committee would not be
moving the bill during the meeting, so members should
consider working with the bill's sponsor on any proposed
changes. The committee could consider additional amendments
the next time the bill was brought before the committee.
10:24:35 AM
AT EASE
10:26:07 AM
RECONVENED
Senator Hoffman stated he would work with the bill sponsor
to get the issue addressed in proper form.
Senator Hoffman WITHDREW his conceptual amendment. There
being NO OBJECTION, it was so ordered.
Co-Chair Stedman asked committee members to consider
holding off on proposing amendments till later in the day
so that members could work with the bill sponsor. He
thought there was several amendments to consider, some with
duplicative numbers. He asked to slow the process down and
re-visit the issue after working with the bill sponsor. He
stated that the action did not preclude the members from
proposing additional amendments. He thought a more orderly
process would create a more refined product.
Senator Olson supported Co-Chair Stedman's remarks.
Senator Wielechowski asked if there had been concerns
expressed by scientists regarding inter-breeding of
species.
Mr. Rabung stated that DFG policy required the use of local
stocks, so the organisms would be derived from other
animals they may interbreed with. The species were not to
be changed in any way whatsoever but would be protected
during the vulnerable juvenile life stage and then placed
in the same area or an adjacent area with depleted or
extirpated stock. He believed the department had genetic
policy and safeguards in place.
Senator Wielechowski asked if Mr. Rabung thought there was
enough wild crab stock to give brood stock to hatcheries.
Mr. Rabung thought there was most likely not enough to
provide brood stock everywhere. He reminded that crabs
mated in the wild, and the impregnated females would be
collected and held until the crab released. The larvae
would be protected, and the crabs could be re-released from
where they were collected if pathology approved.
10:30:16 AM
Senator Wielechowski observed that there were two zero
fiscal notes. He asked if DFG had enough funds to protect
the resource.
Mr. Rabung answered in the affirmative. He noted that every
new fiscal year brought the topic into question. The
department had permitting people in place and the new
applications were similar to others that were already in
existence. He did not expect that there would be many
permit applications since costs were very high and there
was no guarantee of cost recovery.
Co-Chair Stedman referenced concerns of members and stated
there were several amendments to consider. He asked the
sponsor to work with members on amendments.
Co-Chair Stedman set the bill aside. He asked the sponsor
if he had comments or concerns to share.
Representative Ortiz affirmed that he would communicate
with members and staff to explore questions and further
discussion. He understood the topic of the bill merited
further discussion.
Co-Chair Stedman reminded that the CS had been adopted and
Conceptual Amendment 1 had been adopted.
Co-Chair Stedman reminded that the session was close to
ending and the committee was trying to take action on bills
as needed. He anticipated that many pieces of legislation
would be taken up the following session.
10:35:02 AM
RECESSED
[Co-Chair von Imhof adjourned the meeting at 4:43 p.m.]
ADJOURNMENT
4:43:00 PM
The meeting was adjourned at 4:43 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 41 work draft version O.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 41 |
| HB 41 version O - Abridged Sectional_.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 41 |
| HB 41 version O - Sectional Analysis.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 41 |
| HB 41 v. O Conceptual Amendment #1.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 41 |
| HB 247 Support Doc - Surcharge Revenue Breakdown 3.20.20.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 247 |
| HB 247 Explanation of Changes ver. A to U 3.19.20.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 247 |
| HB 247 Sectional Analysis - ver. U 3.19.20.pdf |
SFIN 3/24/2020 9:00:00 AM |
HB 247 |