Oyster "Land Grab" Bill Gets Committee Hearing (and Goes Nowhere)

Everybody agrees that there's issues with the Texas oyster industry, but that's all everybody agreed on during the Culture, Recreation and Tourism Committee hearing of a proposed substitute for HB 3335 on Tuesday.
Everybody agrees that there's issues with the Texas oyster industry, but that's all everybody agreed on during the Culture, Recreation and Tourism Committee hearing of a proposed substitute for HB 3335 on Tuesday.
Photo by Daniel Salazar

For a half-second yesterday, it looked like some version of House Bill 3335, filed by state Rep. Joe Deshotel, a Beaumont Democrat, might actually make it out of the House Culture, Recreation and Tourism Committee.

Supporters of the bill showed up to sing its praises, while opponents were there to rail against it. None of them seemed to pay much attention to the warnings from state Rep. Ryan Guillen, a Democrat from Rio Grande City and the committee chairman, that what he was proposing was different from HB 3335. The original iteration of HB 3335 is a point of contention in the oyster community. Those for the bill say it's merely language that will help private industry protect and cultivate the Texas oyster industry. Those against it say the measure is nothing but an attempt by a single group to control the bulk of Texas oyster reefs.

Of course, we're talking about Sustainable Texas Oyster Resource Management, commonly known as STORM.

STORM is the brainchild of Tracy Woody and his father-in-law, Ben Nelson, the owners of Jeri's Seafood, a company that oysters from Smith Point, as we wrote in a feature story earlier this year. Back in early 2014, Woody and Nelson set up a separate company, Sustainable Texas Oyster Resource Management (a.k.a. STORM). Then they obtained a 30-year lease through the Chambers-Liberty Counties Navigation District for more than 23,000 acres of submerged land in Trinity and Galveston bays. And then, after they had secured the lease, Woody and Nelson started informing the other oystermen who held oyster reef leases in those waters that STORM now held the rights to that submerged land and the oyster reefs on it.

See also: Oystermen Battle Over the Future of Texas Oyster Reefs

Since then, there's been a bitter and public fight between Nelson and Woody and the rest of the oystermen, including the Halili family, owners of Prestige Oyster Company. Woody will tell anyone who asks that both he and Nelson knew going into this deal that it would be controversial. Woody had lawyers tear the lease contract apart and examine it from every angle before he filed the lease to make sure it would hold up in the inevitable court battle that is coming.

Woody also mentioned back in January that he was shopping around to try to get some legislation passed that would make things "codified and clarified," as he explained it then. Craig Enoch, the lawyer representing STORM, kicked off Tuesday's committee hearing by speaking in favor of the bill, calling it "a good first step."

But that was the last positive note heard about HB 3335 for the next hour or so. First, Lisa Halili, vice president of Prestige Oysters, told Guillen on Tuesday afternoon that she believes HB 3335 is an attempt to do just that, to give STORM a legal window to justify its lease in court. Guillen pointed out to Halili and everyone else who spoke against HB 3335 that he had actually proposed substitute legislation for HB 3335 that would be focused on telling Texas Parks and Wildlife that the state agency has the authority to engage in mariculture -- basically, developing and growing new oyster beds -- and that the agency should move forward and do some developing.

After some intense back and forth between Halili and Guillen, she told him she couldn't get into the details because she's not a lawyer, but she made it clear she's against the bill, and STORM even though Guillen kept trying to get away from that particular subject.

"There are things about this bill that we're uncomfortable with," she said.

"What language is it in this bill that makes you uncomfortable? Can you point to a line?" Guillen asked intently, noting that he'd met with both sides before the committee meeting and that they were supposed to be talking about his proposed substitute language for the legislation, not the original HB 3335.

"It opens a window for them in court. The industry doesn't want a window open. We don't feel comfortable with that," Halili told the chairman, urging him to put a purpose of intent that would make it clear that the power over the oyster reefs stayed in the hands of Texas Parks and Wildlife.

The committee moved on to others who spoke out against STORM and HB 3335, including Michael Ivic, owner of Misha's Seafood; Raz Halili, Lisa Halili's son; and Johnny Halili, her husband and co-founder of Prestige Oysters. Guillen kept trying to get people focused on the proposed subsitute language, without much success.

Wayne Dolcefino of Dolcefino Consulting got up and of course went right into the underlying issue with STORM. (He's been working on behalf of the Halilis and those against STORM investigating the issue.) Dolcefino told the committee that STORM is the result of a couple of guys going to their buddies and getting a "sweetheart deal."

Guillen was audibly irked.

"Your entire testimony was about something that has nothing to do with this committee substitute. We're not touching on it. We don't want to touch on it," Guillen told Dolcefino. "We know exactly what you're asking for, which is [for] us to invalidate their side of the deal and to validate your side of the deal."

"It's not about that," Dolcefino replied. "We're not trying to make any money off of this."

Robert Miller, the lawyer representing the Halilis and those against STORM and HB 3335, told the committee that they'd be okay with the proposed substitute language if the committee threw out a section of the bill so that it would simply create a mariculture program and stop there. That, plus adding in a clear purpose of intent clause that states that the bill in no way overrides Texas Parks and Wildlife authority, would make the legislation fine with them.

Guillen sounded bemused by this point. "It boggles my mind that what I get from everyone I talk to on both sides of this is that yes, the mariculture development would help my industry, help my family, help everything, and yet [they're] opposed to it because of 'mysterious language.'"

(To his credit, Guillen didn't wave his fingers around or say "mysterious language" in a fake scary voice, even though we got the feeling he'd have liked to do so.)

"What about not touching that idea? What about not touching that issue and just doing the mariculture program that would help the whole industry. What about that?" Guillen asked.

Woody got up and spoke on behalf of HB 3335. He kept his voice low and even, and introduced himself as "the guy from that evil company everyone is talking about." He argued that HB 3335, like STORM itself, is focused on giving private industry the right to step in and save a resource that everyone agrees is in trouble.

"This bill is a mariculture bill that we all sat down in a meeting and agreed upon, and then other folks, the other side, didn't like the language, even though they'd agreed to it," he told the committee. He argued that the bill will allow private oystermen to get the right to build up oyster reefs under the auspices of Texas Parks and Wildlife.

Woody also stated that this is something that should be in the hands of private industry, since Texas Parks and Wildlife had tried to rebuild reefs in Galveston Bay and failed. (Woody failed to mention that Texas Parks and Wildlife "failed" because Hurricane Ike dumped tons of silt and debris on top of the oyster beds, smothering them, but Lance Robinson of Texas Parks and Wildlife was kind enough to point that out during his testimony.)

"Most people in our industry just want to go out and take what is public and free. They don't want to give back. We want to give something back, and I believe this bill will help do that," Woody told the committee.

When it was his turn to talk, Robinson noted that the industry is in trouble but that the problem is due to the environment, including the drought, overfishing and other factors. For a few minutes, it seemed like the committee might actually start looking at Guillen's substitute language instead of talking about STORM or HB 3335.

But then Ann Bright, general counsel for Texas Parks and Wildlife, got up to speak -- and as Rep. Lyle Larson questioned her on whether the state agency believes it still has legal authority along the coast -- and the committee moved away from that proposed substitute and right back to STORM and that lease. "Our position has been that a lease cannot usurp legislation," Bright said, observing that the agency gets its authority to regulate oysters from legislation. "The mere fact of a lease between two private parties, even though one of them is a government agency, can't trump legislation."

There were a few more halfhearted questions from Guillen, but he finally called it. "Chair withdraws the substitute and, if there's no objection, House Bill 3335 will be left pending." he said.

Nobody objected.


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