Growers warn DOI fee increases could crush small shellfish farms; committee hears HB 2737 discussion

The House Agriculture and Natural Resources Committee on Feb. 18 took public testimony on House Bill 2737 after policy cutoff to address a dispute over Department of Health fee increases for the commercial shellfish regulatory program. Representative Birnbaum, prime sponsor, said a green report considered full cost recovery but recommended a more moderate alternative; HB 2737 would cap certain fees and apply that cap retroactively to fees set on or before Feb. 1, 2026. The committee was advised the bill cannot be advanced this session but that the issue merited public discussion.

Lauren Jenks, assistant secretary for environmental public health at the Department of Health, explained that the department has not historically operated the shellfish program at full cost recovery because prior legislatures supplemented the program with general fund support. Because recent general fund reductions left the agency without that support, DOH adopted a fee schedule designed to move toward full cost recovery; DOH implemented a phased approach charging 50% of the new schedule Feb. 1, 2026 with a planned additional increase in July 2026. Jenks said DOH reopened rulemaking to rebalance categories and limit the burden on the smallest producers.

Industry witnesses described concrete economic impacts. Justin Stang (Pacific Coast Shellfish Growers Association) called the industry "family- and tribal-run" and said the proposed schedule would impose unsupportable costs. Kyle Wentz (Chelsea Farms) said his farm faces fee increases of 400% to 650% depending on license type. Evie Foggergan (Calm Cove Oyster Company) said her family operation with $57,000 in annual revenue would face DOH fees rising to about $2,400 in 2026 and $4,400 in 2027 under DOH rules; she said HB 2737’s proposed $1,000 cap would be sustainable. Annie Harold and Marilyn Sheldon described combined license, processing and export costs that they say could force buyers to drop Washington suppliers and could force small processors out of business.

Committee members asked DOH for further analysis, including year-over-year fee increases, licensing trends and comparisons to other states; DOH staff said the agency would follow up with data and noted it has a high volume of fee categories and many invoices that go out in the spring. Representative Birnbaum and others urged additional review of fee structures, possible general-fund support or different financing mechanisms to preserve an industry that supports thousands of rural jobs. For the public record the committee noted 'signed in pro 202, con 49, other 0' and concluded the hearing.