HB 60-GEODUCK AQUATIC FARMING/SEED TRANSFER  5:06:12 PM CO-CHAIR WAGONER announced the consideration of HB 60. 5:06:46 PM CO-CHAIR WAGONER asked for a motion. 5:06:55 PM CO-CHAIR PASKVAN moved to bring HB 60, version \A, before the committee for purposes of discussion. CO-CHAIR WAGONER objected for purposes of discussion. 5:07:20 PM REPRESENTATIVE PAUL SEATON, sponsor of HB 60, said he appreciated the timely effort the committee was taking on this bill. He said it works on trying to promote economic development around the coast of Alaska where it is difficult to establish new economic bases, especially ones that won't conflict in time with salmon and herring fishing. He said HB 60 allows for sub- tidal farming of geoduck clams. They average about 2.5 lbs. and are about 7 inches long. They are filter feeders and are generally two to three feet down in one place their entire life. Their habitat has worms and tunicates, a small sessile animal (naturally immobile) that aren't used commercially for subsistence, and nothing about geoducks has been found to inhibit their numbers. His said his plan is necessary because the ADF&G has an informal policy of not allowing geoducks to go to the single certified hatchery in the state in Seward for raising and being distributed to farms anywhere other than where they are already occurring (only in Southeast). The recent geoduck conflict has been because wild stocks are harvested by divers and people want to put farms in good habitat which is where there is already a wild stock. He explained however, that if the species would proliferate it would be a great bonus for Alaska, because right now fishermen are getting $21 lb. for them. It is good for communities around the coast because geoducks, unlike oysters or muscles that have to be tended two or three times every summer, are put in the sediment with a small plastic piece of pipe with a net on the top to keep out predators, two years later those are taken off, and in about seven years you are in harvest mode without doing anything else. 5:11:13 PM REPRESENTATIVE SEATON began his video presentation at 5:11 and that ran until 5:14 p.m. 5:14:41 PM REPRESENTATIVE SEATON said HB 60 simply says you can't use the absence of geoducks in an area to deny a plan permit. It would be for all areas around the Gulf of Alaska, Kodiak, Yakutat, Chignik and other areas out West, but not including Kachemak Bay, which is designated a critical habitat and doesn't allow bottom farming. 5:15:18 PM REPRESENTATIVE SEATON said HB 60 limits farms to sub-tidal areas, so there is no interference with subsistence or sport fisheries. This is a clean and renewable fishery; it depends on clean water so people will make sure no pollution comes in. He said the state has "larval drift zones" to make sure if you are enhancing a clam species you have to take the stock from that same area, raise the seed and then replant from that same stock so you don't get genetic crosses. And HB 60 is specifically for taking clam seed to an area where there are no natural stocks in the first place to alleviate that worry. 5:16:44 PM CO-CHAIR WAGONER asked what the main predator for geoducks is as they are being raised. REPRESENTATIVE SEATON answered when they are juveniles it's the star fish. SENATOR STEVENS asked how the red tide would affect geoducks. REPRESENTATIVE SEATON answered that geoducks are filter feeders and would be affected by a red tide bloom. This bill does not exempt any farm from all of the health and safety criteria that all Mari culture farms must deal with. So the geoducks have to be tested before they are sold. 5:17:59 PM SENATOR STEVENS asked if there are shellfish hatcheries ready to supply the needs of this new industry. REPRESENTATIVE SEATON replied the problem with having the only shellfish hatchery in the state is that its business plan was based on sale of seeds so it could be self-sustaining. Geoduck seed is much more valuable than oyster seed and without being able to distribute to more farms than just in Southeastern Alaska that business plan has not been realized. This bill should make the shellfish hatchery self-sustaining. 5:18:35 PM SENATOR WIELECHOWSKI recalled concerns from ADF&G and asked if they had been resolved. 5:18:56 PM REPRESENTATIVE SEATON answered yes, and the department is now neutral. They were concerned about the larval drift zones in terms of contamination and there is no question of that here. 5:19:31 PM SENATOR FRENCH asked if he heard any opposition to the bill. REPRESENTATIVE SEATON answered not since ADF&G came out with its concern. 5:19:47 PM CO-CHAIR WAGONER opened the public hearing. 5:20:56 PM PAUL FUHS, Alaska Sea Farms, said he supported HB 60 and that Alaska Sea Farms is the biggest operation growing geoducks in Southeast. He said if they pass this bill, it won't be a wasted effort. They would go immediately to a research permit and get some geoducks in the ground and see how they grow, mortalities and things like that. Geoducks are growing in Resurrection Bay right now. He said "the market has just gone off the deep end for geoducks" and that $21 lb. to fisherman makes it the highest price fish in Alaska. It takes seven or eight years to grow them, but once you get them in the ground that is all you need to do. It's really good for rural Alaska, but what makes it so simple is the logistics: the transportation, the hatchery, the PSP testing is all there and that is what Southeast fights all the time. So it could be even more successful in Southcentral. 5:21:53 PM SENATOR STEVENS asked how a person starts a geoduck farm. MR. FUHS explained that you get a lease from the State of Alaska and from that you get exclusive use of the clams on your site. They don't worry about people coming and taking them because they are not a big item on most people's menu. But you have to prove that the water is clean and take over a year's worth of water samples; you can't be anywhere near a discharge line; you have to stake it off; you have to get a permit to transfer the seed from the hatchery, but that's it. The lease lasts for 10 years and is renewable. They have had some of these farms for 10 years and are just beginning to sell their first adult geoducks. 5:23:04 PM CO-CHAIR WAGONER asked about much a first-year geoduck weighs. MR. FUHS replied about two pounds after seven or eight years. 5:23:46 PM ROGER PAINTER, President, Alaskan Shellfish Growers Association, said they supported HB 60. He said the geoduck market is strong and seems to be getting strong all the time. There are major geoduck aquaculture operations in Puget Sound that are doing very well, and two have had some interest in investments in Southcentral. And while he thinks they should be successful, they won't really know until the animals are put in the ground. They have been unsuccessful to this point in convincing ADF&G to do an experimental approach. 5:25:45 PM SENATOR WIELECHOWSKI asked if someone for ADF&G was on line. CO-CHAIR WAGONER said no, just someone from the shellfish hatchery. SENATOR WIELECHOWSKI asked if it was run by the state. CO-CHAIR WAGONER said someone indicated yes. SENATOR WIELECHOWSKI asked Mr. Hetrick (on line) if he saw any problems to the ecosystem with this, a disease or anything. JEFF HETRICK, General Manager, Alutiiq Pride Shellfish Hatchery, Seward, Alaska, answered no. They are currently using Resurrection Bay water that is filtered prior to coming into the hatchery and then they chlorinate the effluent prior to going back into the bay. So there should be no disease concerns. He said there are other clam populations, but sub-tidally they don't expect any competition between geoduck clams and anything else. 5:26:50 PM SENATOR WIELECHOWSKI asked how much acreage they anticipate leasing and how many geoducks they will allow per acre. MR. HETRICK answered initially a fisheries resource permit would just be a small plot to prove the concept and identify the sites that would be applicable. The minimum size for a commercially viable farm for DNR and ADF&G is two acres, but he didn't know exactly how many geoducks get planted per acre - but hundreds of thousands. SENATOR WIELECHOWSKI asked if there is spacing between the acreage. MR. HETRICK answered that the acreage is fee-based, so you don't want to take more space than you actually need. But typically, farms are contiguous; acreage would be side by side. These sites require specific habitat and you wouldn't be taking steep rocky slopes, for instance; you'd look for gentle sandy bottoms or light gravel, which are "minimized." They are working with the Sea Life Center and some local dive shops to identify some locations for the first proof of concept program in Resurrection Bay. Perhaps others would step forward with other sites. 5:28:28 PM SENATOR STEVENS asked how geoducks are processed, since they are off the road system. 5:29:04 PM MR. FUHS replied that they are taken from remote locations now and delivered by the dock, but they are sold live. So as soon as they hit the dock they go into "chill mode" and are flown out immediately. They experimented with processing some of them, but the market didn't want that. They wanted live geoduck. 5:29:39 PM SENATOR STEVENS asked if geoducks can survive for a period of time. MR. FUHS answered yes; they found that the farms benefit the smaller airlines and ships, fuel, divers, and all the ancillary services that go around it. 5:30:18 PM CO-CHAIR WAGONER asked if some of the Native corporations want to get into the geoduck industry; Port Graham would probably be a perfect place because it doesn't get a big surge and is shallow. Can they be transported to Homer on a boat and then be put on the airplane in Homer? MR. FUHS answered yes. SENATOR WIELECHOWSKI asked if geoducks are handpicked by SCUBA (self-contained underwater breathing apparatus) divers. MR. FUHS replied yes; they are dug in so hard that the diver puts a water jet down in the mud and it loosens it up a little bit to where the geoduck can be wrestled out. It's tough work in about 15-40 feet of water, but a diver can harvest about 1,000 animals a day. CO-CHAIR WAGONER asked if they use hookah gear. MR. FUHS replied yes, sometimes hardhat, sometimes SCUBA. CO-CHAIR WAGONER closed public testimony and removed his objection. He asked for a motion to move HB 60 out of committee with individual recommendations and attached fiscal note(s). 5:31:57 PM CO-CHAIR PASKVAN said so moved. There were no objections and HB 60 moved from the Senate Resources Standing Committee.