Legislature(2003 - 2004)

02/04/2004 08:31 AM FSH

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HB 341-DIVE FISHERY MANAGEMENT ASSESSMENT                                                                                     
Number 0034                                                                                                                     
CHAIR SEATON announced  that the only order of  business would be                                                               
HOUSE  BILL  NO.  341,  "An  Act relating  to  the  dive  fishery                                                               
management assessment."                                                                                                         
Number 0054                                                                                                                     
REPRESENTATIVE OGG moved  to adopt HB 341,  the original version,                                                               
for discussion purposes.                                                                                                        
CHAIR SEATON, who'd requested  the motion, thanked Representative                                                               
Ogg and called on the sponsor's staff.                                                                                          
Number 0088                                                                                                                     
TIM BARRY,  Staff to Representative  William K.  Williams, Alaska                                                               
State Legislature,  presented HB 341 on  behalf of Representative                                                               
Williams,  sponsor.   He said  this is  basically a  housekeeping                                                               
measure  requested   by  the   Southeast  Alaska   Regional  Dive                                                               
Fisheries Association  (SARDFA) to  give SARDFA  more flexibility                                                               
in its  operations; its members pay  a tax based on  a percentage                                                               
of the  value of  their landings in  the various  dive fisheries,                                                               
and revenue from that is spent on managing those fisheries.                                                                     
MR.  BARRY  explained  that  under the  current  state  law  that                                                               
established SARDFA,  its members elect  to tax themselves  at the                                                               
rate of 1,  3, 5, or 7 percent  of the value of the  catch.  What                                                               
SARDFA is  requesting, which  HB 341  would do,  is to  allow the                                                               
option  of also  taxing themselves  at 2,  4, or  6 percent.   He                                                               
noted  that on  teleconference  were SARDFA  members and  present                                                               
from the  Department of  Revenue was  Chuck Harlamert,  who deals                                                               
with collecting  these taxes.   Mr. Barry pointed out  that there                                                               
is a zero fiscal note.                                                                                                          
CHAIR SEATON  recognized that Representatives Gara,  Samuels, and                                                               
Heinze had joined the meeting.                                                                                                  
Number 0300                                                                                                                     
REPRESENTATIVE  GUTTENBERG requested  a description  of the  dive                                                               
MR. BARRY deferred to the SARDFA members.                                                                                       
Number 0355                                                                                                                     
REPRESENTATIVE GARA offered his  understanding that the bill just                                                               
relates  to  revenue, rather  than  changing  any standards  that                                                               
relate to how the dive fisheries are conducted and so forth.                                                                    
MR. BARRY said that's correct.                                                                                                  
CHAIR SEATON, following up on  a remark by Representative Wilson,                                                               
noted  that it  allows  going up  or down  1  percent within  the                                                               
current range of 1-7 percent.                                                                                                   
Number 0438                                                                                                                     
REPRESENTATIVE HEINZE asked where the monies from the tax go.                                                                   
MR. BARRY  pointed out that  experts on teleconference  knew more                                                               
than he,  but offered  his understanding  that the  Department of                                                               
Revenue  collects the  taxes, which  then go  through the  Alaska                                                               
Department  of   Fish  &   Game  (ADF&G)   to  the   "dive  fish"                                                               
association,  which has  divers,  processors, representatives  of                                                               
various  Southeastern Alaska  communities, and  [ADF&G personnel;                                                               
they  jointly  manage  the  fisheries.   He  asked  that  someone                                                               
correct him if that wasn't accurate.                                                                                            
Number 0567                                                                                                                     
JULIE DECKER, Executive Director,  Southeast Alaska Regional Dive                                                               
Fisheries Association,  explained that she has  worked for SARDFA                                                               
since its creation in 1998.   The original legislation was passed                                                               
in 1997  to allow for  a dive fisheries association  like SARDFA;                                                               
it allowed  members to vote  to tax themselves at  1, 3, 5,  or 7                                                               
percent.  Although  the legislature couldn't turn  over its power                                                               
to  tax, she  said it  could allow  [SARDFA members]  to vote  to                                                               
assess themselves at a certain  percentage; those percentages had                                                               
to be laid out in the legislation.                                                                                              
MS. DECKER  addressed questions that  had been raised.   She said                                                               
species  now  harvested  are  sea  cucumbers,  sea  urchins,  and                                                               
geoducks; assessments for  those are 5 percent, 7  percent, and 5                                                               
percent, respectively.  However, for  sea cucumbers the 5 percent                                                               
assessment  is a  little more  than  needed; the  extra has  been                                                               
rolled  over in  an account  to  do special  projects.   Although                                                               
[SARDFA]  is  looking  at   possibly  lowering  that  assessment,                                                               
lowering it to  3 percent would be a 40  percent reduction, which                                                               
would  be too  little [in  revenues]; lowering  it to  4 percent,                                                               
however, would  appear to  work well.   That  was one  reason the                                                               
idea for this legislation came up, she reported.                                                                                
MS. DECKER  agreed this is a  housekeeping measure.  As  to where                                                               
the money  goes, she said right  now it's the divers  who pay the                                                               
tax; the processors  collect the money from the  divers, hold it,                                                               
and deposit  it quarterly with  the Department of  Revenue; after                                                               
the  legislature approves  the appropriation,  the Department  of                                                               
Revenue  transfers the  funds  to [ADF&G].    She explained  that                                                               
every year [ADF&G]  and SARDFA come to an agreement  on an annual                                                               
operating plan  that says how the  money will be used;  after the                                                               
plan  is signed  and  the money  transferred  to the  department,                                                               
[ADF&G]  holds  part of  the  money  and  transfers the  rest  to                                                               
SARDFA,  depending on  how it's  been decided  the funds  will be                                                               
used each year.                                                                                                                 
Number 0783                                                                                                                     
REPRESENTATIVE  HEINZE   asked  what   happens  if  there   is  a                                                               
disagreement between  SARDFA and [ADF&G] about  the allocation of                                                               
the money.                                                                                                                      
MS. DECKER said  that hadn't happened yet; both  groups have been                                                               
willing  to compromise.   Noting  that the  legislation says  the                                                               
money  cannot be  expended  until the  agreement  is signed,  she                                                               
surmised that  SARDFA would  be in limbo  until an  agreement was                                                               
Number 0840                                                                                                                     
MS.  DECKER,  in  response  to  a  question  from  Representative                                                               
Heinze, explained why  the sea urchin assessment is  a little bit                                                               
higher.  In part, the sea urchin  fishery was new at the time and                                                               
was  one reason  for taking  this  route of  creating SARDFA  and                                                               
self-taxing.  She said [ADF&G]  was receiving budget cuts and had                                                               
taken the position that it didn't  have any extra money to manage                                                               
new fisheries.   Thus that is  the only fishery of  the three for                                                               
which a large part of the  assessment goes directly to [ADF&G] to                                                               
pay only for management of the  fishery; she said she believes it                                                               
is  $35,000 a  year.   Previous to  that, there  was a  voluntary                                                               
assessment  from  divers,  and   the  Ketchikan  Gateway  Borough                                                               
chipped in money for management of the fishery.                                                                                 
MS. DECKER, in  further response, clarified that  $35,000 is only                                                               
the  sea  urchin  management  portion;  [SARDFA]  collects  about                                                               
$200,000 to  $225,000 a year  "in the  total assessment."   As to                                                               
whether it's enough,  she said it's only a part  of what pays for                                                               
the fisheries;  [ADF&G] still has  some general fund  monies that                                                               
it receives and puts toward  management of sea cucumbers and part                                                               
of the management  of geoducks.  However, there was  a need to go                                                               
into  new areas,  do  surveys,  and do  water  quality work,  for                                                               
example,  and there  hadn't been  money to  do that  in order  to                                                               
develop  and increase  these fisheries;  that's why  there was  a                                                               
decision  to  bring  money  to the  table  for  increasing  these                                                               
fisheries, which is where the idea for SARDFA came from.                                                                        
Number 1037                                                                                                                     
MS.  DECKER,  in  response  to  a  question  from  Representative                                                               
Guttenberg, explained  that management plans are  adopted through                                                               
the Board of  Fisheries for each fishery.  One  main component of                                                               
the  dive  fisheries  is that  [ADF&G  personnel]  do  underwater                                                               
diving, assessing or counting the stocks  in each area.  It's not                                                               
only  a management  cornerstone, but  is also  an added  expense,                                                               
since  biologists  go  underwater  and vessels  are  needed,  for                                                               
example.  Another cornerstone is  assessing the resource prior to                                                               
opening any area  for quotas.  Before fishing takes  place in the                                                               
geoduck  fishery,  an  additional  part -  more  related  to  the                                                               
Department of  Environmental Conservation  (DEC) - is  that there                                                               
must be 15  sets of water quality tests in  each harvest area, as                                                               
well as paralytic shellfish poisoning (PSP) testing.                                                                            
Number 1151                                                                                                                     
CHAIR SEATON mentioned proposed  budgetary decrements relating to                                                               
[ADF&G].    Noting  that  sea cucumber  surveys  are  slated  for                                                               
elimination,  he  asked  how  much  money  that  is  and  whether                                                               
[SARDFA] can pick up the surveys in order to manage the fishery.                                                                
MS.  DECKER replied  that [SARDFA's]  sea cucumber  committee and                                                               
board of  directors will  meet this week  to discuss  whether the                                                               
shortfall can  be picked up.   At eight  days of survey  time for                                                               
sea cucumbers at roughly $6,000 a  day, she said she believes the                                                               
shortfall  is about  $50,000.   If those  budget cuts  happen and                                                               
SARDFA  doesn't fill  in, there  will  be a  direct reduction  of                                                               
quota because those  areas won't be open.  "They  do not open any                                                               
areas  if they  haven't been  assessed first,"  she pointed  out.                                                               
She added  that SARDFA has some  funds available, but it  will be                                                               
the call of the board of directors.                                                                                             
Number 1287                                                                                                                     
PAT CASSIN,  Commercial Diver; Member, Southeast  Alaska Regional                                                               
Dive Fisheries  Association, reported  that he'd helped  to start                                                               
the sea urchin  fishery in Alaska and now dives  about 239 days a                                                               
year for  sea urchins and sea  cucumbers.  He said  the tax money                                                               
collected the  last three  years directly  resulted this  year in                                                               
allowing the fishery to stay open  an extra four weeks because of                                                               
new areas  surveyed.   Referring to budget  cuts and  the $50,000                                                               
for surveys mentioned previously, he  said that would represent a                                                               
loss of more than $1 million  to the divers alone.  He emphasized                                                               
the need for current, accurate surveys.                                                                                         
Number 1399                                                                                                                     
CLAY BEZENEK,  Member, Southeast  Alaska Regional  Dive Fisheries                                                               
Association, informed the committee  that he retired from harvest                                                               
diving  following  an accident  and  now  processes geoducks  and                                                               
other species  in Craig;  he holds the  processor seat  on SARDFA                                                               
and  was  one of  its  founders.    Speaking  in support  of  the                                                               
"incremental bill," he said it  will provide flexibility and is a                                                               
housekeeping measure.                                                                                                           
MR. BEZENEK  pointed out the difficulty  of foreseeing everything                                                               
that  was needed  when  SARDFA was  formed, and  said  this is  a                                                               
necessary tweak.   As  to the  shortfall with  regard to  the sea                                                               
cucumber surveys, he  said he would, of course,  appreciate it if                                                               
the  state funded  the fisheries,  because the  money that  comes                                                               
back  is  pretty  incredible  into  the  community  in  Southeast                                                               
Alaska.   If not,  however, he indicated  SARDFA and  ADF&G could                                                               
figure it out between them.                                                                                                     
MR.  BEZENEK indicated  SARDFA has  been trying  to get  ADF&G to                                                               
allow  SARDFA  to do  some  of  the biological-statistician  work                                                               
through  independent subcontractors;  suggesting now  may be  the                                                               
time, he  said subcontracting  is probably  in the  future, since                                                               
it's perhaps a little more expensive for  the state to do it.  He                                                               
closed  by saying,  "We'll  be  able to  deal  with it,  whatever                                                               
direction you guys  give, and I appreciate your  support then and                                                               
Number 1563                                                                                                                     
CHAIR SEATON asked  whether the surveys are done with  a sled and                                                               
videos or by divers.                                                                                                            
MR. BEZENEK  replied, "We do  reconnaissance with sleds,  ... but                                                               
the actual biological  counting work is done  on-bottom with, ...                                                               
usually, teams  of two divers."   Mentioning ADF&G,  he indicated                                                               
harvest divers aren't  allowed to participate in  the surveys and                                                               
therefore don't know [the department's] protocol.                                                                               
MR. BEZENEK pointed  out that Canada is years ahead  in most ways                                                               
of fishing,  except for  the salmon industry.   He  remarked, "In                                                               
the  dive fisheries,  we've pretty  much looked  at them  because                                                               
they've  been harvesting  geoducks,  cucumbers,  and urchins  for                                                               
about  25 years  now, and  they  have the  best, most  successful                                                               
geoduck fishery in the world."   He noted that Canada has a First                                                               
Nations member,  two industry divers,  and one  representative of                                                               
the  "biological community"  to do  surveying work,  and he  said                                                               
SARDFA is  starting to lean  "in that direction."   He concluded,                                                               
"We still need  the survey work done, and we've  never ... budged                                                               
from that; we want good numbers,  and in some of the fisheries, I                                                               
don't feel  ... we're necessarily  getting the  greatest numbers.                                                               
But we've ... been patient, so that's where we're at."                                                                          
Number 1699                                                                                                                     
REPRESENTATIVE WILSON asked  how big the fishery is  and how many                                                               
divers are active, diving on a regular basis.                                                                                   
MR.  BEZENEK,  suggesting  Mr.   Cassin  probably  knows  better,                                                               
answered that the urchin fishery goes  for the better part of the                                                               
year because the 15 or so  divers aren't enough to take the whole                                                               
quota for  Southeast Alaska.   As for geoducks, the  live fishery                                                               
has 40  to 45 divers,  and $5.20 a pound  was paid one  week this                                                               
year, with  a steady price  over $4.00; by contrast,  the average                                                               
price the  previous year was  $1.67, and the highest  before that                                                               
was during  a bidding war four  or five years ago  when the price                                                               
was  $4.25.   He credited  this  year's average  price, which  he                                                               
estimated  at more  than $4.00,  to DEC's  work with  the divers,                                                               
SARDFA's  legitimacy  and  having   an  executive  director  like                                                               
Ms. Decker, and having the legislature  understand what SARDFA is                                                               
trying to accomplish.                                                                                                           
MR. BEZENEK  remarked, "We're as  biologically active ...  as any                                                               
group  you'll  ever  see."   He  indicated  overharvesting  would                                                               
result in  ending divers' ability  to fish.   Expressing pleasure                                                               
at  how things  have worked  thus  far, he  said geoduck  numbers                                                               
speak for  themselves:  last  year the fishery's  ex-vessel value                                                               
was $350,000 or $400,000, whereas  this year he estimates it will                                                               
be about  $1.2 million.   He emphasized,  however, that a  lot of                                                               
area  still needs  to be  biologically surveyed,  with the  clams                                                               
counted on  the bottom.   He also  mentioned "the farm  guys" who                                                               
have  discovered  there  is  money  to be  made.    He  expressed                                                               
appreciation for the legislature's support to date.                                                                             
Number 1932                                                                                                                     
REPRESENTATIVE  HEINZE  asked  whether  some of  the  money  goes                                                               
towards research  that allows the  geoduck permitting.   She also                                                               
asked how many permits have been issued for geoduck farming.                                                                    
MR. BEZENEK explained that there  are two separate fisheries, and                                                               
[SARDFA's]  money goes  to pay  for the  commercial fishery.   He                                                               
said  he doesn't  believe the  aquatic farmers  have a  tax-based                                                               
system set up to pay their way, and the state will end up paying                                                                
for that out of general fund money.                                                                                             
Number 2021                                                                                                                     
CHAIR SEATON closed public testimony.                                                                                           
Number 2035                                                                                                                     
REPRESENTATIVE WILSON  moved to  report HB  341 out  of committee                                                               
with individual recommendations and  the accompanying zero fiscal                                                               
note.   There being no  objection, HB  341 was reported  from the                                                               
House Special Committee on Fisheries.                                                                                           

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