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SB 22: "An Act relating to management of enhanced stocks of shellfish; authorizing certain nonprofit organizations to engage in shellfish enhancement projects; relating to application fees for salmon hatchery permits; and providing for an effective date."

00                             SENATE BILL NO. 22                                                                          
01 "An Act relating to management of enhanced stocks of shellfish; authorizing certain                                     
02 nonprofit organizations to engage in shellfish enhancement projects; relating to                                        
03 application fees for salmon hatchery permits; and providing for an effective date."                                     
04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
05    * Section 1. AS 16.05.730(c) is amended to read:                                                                   
06            (c)  The board may                                                                                           
07 (1)  consider the need of enhancement projects authorized under                                                     
08 AS 16.10.400 and contractors who operate state-owned enhancement projects under                                         
09 AS 16.10.480 to harvest and sell fish produced by the enhancement project that are not                                  
10       needed for brood stock to obtain funds for the purposes allowed under AS 16.10.450                                
11       or 16.10.480(d);                                                                                              
12                 (2)  consider the need of enhancement projects authorized under                                     
13       AS 16.12.010 to harvest and sell shellfish that are not needed for brood stock to                             
14       obtain funds for the purposes allowed under AS 16.12.080;                                                     
01 (3)  [. THE BOARD MAY] exercise its authority under this title as it                                                
02 considers necessary to direct the department to provide a reasonable harvest of fish, in                                
03 addition to the fish needed for brood stock, to an enhancement project to obtain funds                                  
04 for the enhancement project if the harvest is consistent with sustained yield of wild                                   
05       fish stocks; and                                                                                              
06                 (4)  [. THE BOARD MAY] adopt a fishery management plan to                                           
07       provide fish to an enhancement project to obtain funds for the purposes allowed under                             
08       AS 16.10.450, [OR] 16.10.480(d), or AS 16.12.080.                                                         
09    * Sec. 2. AS 16.10.400(b) is amended to read:                                                                      
10 (b)  The application for a permit under this section shall be on a form                                                 
11 prescribed by the department and be accompanied by an application fee of $1,000                                     
12 [$100]. The commissioner may waive the submission of an application for a permit to                                     
13       operate a hatchery under AS 16.10.480.                                                                            
14    * Sec. 3. AS 16 is amended by adding a new chapter to read:                                                        
15                  Chapter 12. Shellfish Enhancement Projects.                                                          
16 Sec. 16.12.010. Permits for shellfish enhancement projects. (a) Subject to                                            
17 the restrictions imposed by statute or regulation under this chapter, the commissioner                                  
18 may issue a permit to a nonprofit corporation organized under AS 10.20 for a shellfish                                  
19       enhancement project.                                                                                              
20 (b)  Each applicant for a permit under this section shall apply in a format                                             
21       prescribed by the department and pay an application fee of $1,000.                                                
22 (c)  A permit issued under this section is nontransferable. If a permit holder                                          
23 sells or leases a facility for which a permit has been issued under this section, the new                               
24       operator shall apply for a permit under this section.                                                             
25 (d)  The commissioner shall consult with and solicit recommendations from                                               
26 federal and state agencies and technical experts in the relevant area regarding permit                                  
27       stipulations and issuance.                                                                                        
28 (e)  The commissioner may not issue a permit under this section unless the                                              
29 commissioner determines that the action would result in substantial public benefits and                                 
30       would not jeopardize natural stocks.                                                                              
31 Sec. 16.12.020. Hearings before permit issuance. (a) At least 30 days before                                          
01       the issuance of a permit under AS 16.12.010, the department shall hold a public                                   
02       hearing in a central location in the vicinity of the proposed release of shellfish.                               
03            (b)  Notice of the hearing shall be published in a newspaper of general                                      
04       circulation once a week for three consecutive weeks, with completion of the notice at                             
05       least five days before the hearing.                                                                               
06 (c)  The department shall conduct the hearing. The applicant shall present a                                            
07 plan for the proposed shellfish enhancement project describing relevant facts that may                                  
08 be of interest to the department or to the public and the capacity of the facility. The                                 
09       department shall give interested members of the public an opportunity to be heard.                                
10 (d)  The department shall record and consider objections and recommendations                                            
11 offered by the public at the hearing conducted under this section. The department shall                                 
12 respond in writing, not later than 30 days after the hearing is held, to a specific                                     
13       objection offered by a member of the public at the hearing.                                                       
14 Sec. 16.12.030. Conditions of a permit. The department shall require, in a                                            
15       permit issued under this chapter, that the permit holder                                                          
16 (1)  procure shellfish from the department or a source approved by the                                                  
17       department;                                                                                                       
18 (2)  place shellfish only in water of the state specifically designated in                                              
19       the permit;                                                                                                       
20 (3)  not procure or place genetically modified shellfish into the water of                                              
21       the state;                                                                                                        
22 (4)  not resell or transfer shellfish sold to a permit holder by the state or                                           
23       by another party approved by the department;                                                                      
24 (5)  not release shellfish before approval of the department, and, for                                                  
25 purposes of pathological examination and approval, that the permit holder notify the                                    
26       department at least 15 days before the date of the proposed release of shellfish;                                 
27 (6)  destroy diseased shellfish in a specific manner and place designated                                               
28       by the department;                                                                                                
29 (7)  harvest shellfish only at specific locations and under specific                                                    
30       conditions as designated by the department;                                                                       
31 (8)  make surplus shellfish available for sale first to the department and                                              
01       then, after inspection and approval by the department, to other permit holders                                    
02       operating under this chapter;                                                                                     
03                 (9)  provide a copy of the sales transaction to the department if surplus                               
04       shellfish are sold by a permit holder to another permit holder;                                                   
05                 (10)  release shellfish in an area where the shellfish will be available to                             
06       traditional fisheries, subject to the provisions of this chapter and regulations adopted                          
07       under this chapter.                                                                                               
08            Sec. 16.12.040. Alteration, suspension, or revocation of permit. (a) If a                                  
09       permit holder fails to comply with the conditions and terms of the permit issued under                            
10 AS 16.12.010 within a reasonable period after notification by the department of                                         
11 noncompliance, the permit may be suspended or revoked, in the discretion of the                                         
12       commissioner.                                                                                                     
13 (b)  If the commissioner finds that the operation of the permitted activity is not                                      
14 in the best interests of the public, the commissioner may alter the conditions of the                                   
15 permit to mitigate the adverse effects of the operation or, if the adverse effects are                                  
16 irreversible and cannot be mitigated sufficiently, initiate a termination of the operation                              
17 under the permit over a reasonable period under the circumstances, not to exceed four                                   
18 years. During the period that the operation is being terminated, the permit holder may                                  
19       harvest shellfish under the terms of the permit but may not release additional shellfish.                         
20 Sec. 16.12.050. Regulations relating to released shellfish. (a) Shellfish                                             
21 released into the natural water of the state by a permit holder under this chapter are                                  
22 available to the people for common use and are subject to regulation under applicable                                   
23 law in the same way as shellfish occurring in their natural state except when they are                                  
24       in a special location designated by the department for harvest by a permit holder.                                
25 (b)  The Board of Fisheries may, after the issuance of a permit by the                                                  
26 commissioner, amend by regulation adopted in accordance with AS 44.62                                                   
27 (Administrative Procedure Act), the terms of the permit relating to the source of brood                                 
28 stock, the harvest of shellfish by permit holders, and the specific locations designated                                
29 by the department for harvest. The Board of Fisheries may not adopt a regulation or                                     
30       take an action regarding the issuance or denial of a permit required in this chapter.                             
31 Sec. 16.12.060. Department assistance and cooperation. (a) Before and after                                           
01 permit issuance under AS 16.12.010, the department shall make reasonable efforts,                                       
02 within the limits of time and resources, to advise and assist applicants or permit                                      
03 holders, as appropriate, as to shellfish enhancement projects, including the planning,                                  
04       construction, and operation of facilities.                                                                        
05 (b)  Nothing in this section exempts an applicant or permit holder from                                                 
06 compliance with this chapter or from compliance with the regulations or restrictions                                    
07       adopted under this chapter.                                                                                       
08 Sec. 16.12.070. Brood stock sources. (a) The department shall approve the                                             
09 source and number of shellfish taken for use as brood stock under AS 16.12.010 -                                        
10       16.12.199.                                                                                                        
11 (b)  Where feasible, a permit holder shall first take shellfish from stocks native                                      
12       to the area in which the shellfish will be released.                                                              
13 Sec. 16.12.080. Sale of shellfish; use of proceeds; quality and price. (a) A                                          
14 permit holder that sells shellfish harvested from the natural water of the state, or sells                              
15 shellfish to another permit holder under this chapter, shall use the funds only for                                     
16 reasonable operating costs, including debt retirement, expanding its facilities, shellfish                              
17 enhancement projects, shellfish research, or to assist in meeting the department's costs                                
18       of managing the affected fisheries for the area in which the shellfish release is located.                        
19 (b)  A permit holder shall ensure that shellfish harvested and sold for human                                           
20 consumption are of comparable quality to shellfish harvested by commercial fisheries                                    
21       in the area and are sold at prices commensurate with the current market.                                          
22 Sec. 16.12.090. Cost recovery fisheries. (a) A permit holder may harvest                                              
23       shellfish for a shellfish enhancement project in                                                                  
24 (1)  a special harvest area through agents or employees of or persons                                                   
25 under contract with the permit holder as provided under a permit from the department                                    
26       or regulations of the Board of Fisheries; or                                                                      
27 (2)  a special harvest area through the common property fishery under                                                   
28       this section.                                                                                                     
29 (b)  A permit holder may, by a majority vote of the membership of the permit                                            
30 holder's board, elect to harvest shellfish in a special harvest area established for an                                 
31 enhancement project through the common property fishery. At the request of the                                          
01 permit holder and if the commissioner determines that there are no allocative issues                                    
02 involved, and after reasonable consultation with affected commercial fishermen, the                                     
03 commissioner may adopt regulations governing the harvest of shellfish in a special                                      
04 harvest area through a common property fishery. The regulations must specify the                                        
05 terms, conditions, and rules under which the common property fishery in the special                                     
06 harvest area shall be conducted, including requirements for holding inspections and                                     
07 reporting of harvests and sales of shellfish taken in the special harvest area. Following                               
08 adoption of regulations by the department, before January 15 of each year, the permit                                   
09 holder's board of directors, by a majority vote of the board's membership, may                                          
10 determine whether the permit holder will operate under the regulations adopted under                                    
11 this subsection during the current calendar year and shall notify the department if the                                 
12 permit holder intends to operate under the regulations adopted under this subsection.                                   
13 The Board of Fisheries may adopt regulations under AS 16.05.251 regarding a                                             
14 fisheries management plan governing operations under this subsection in a special                                       
15 harvest area, including allocation plans. Participation in the fishery must be open to all                              
16 interim-use permit and entry permit holders who hold permits to operate a type of gear                                  
17 that may be used in the fishing district in which the special harvest area is located if                                
18 that type of gear is authorized by regulation to be used in the special harvest area. An                                
19 interim-use permit holder or an entry permit holder who takes shellfish in a common                                     
20 property fishery in a special harvest area may sell the shellfish to a fish buyer or                                    
21       processor who is licensed to do business in the state.                                                            
22 (c)  As a condition of participation in a common property shellfish fishery in a                                        
23 special harvest area under this section, a fisherman who participates in the fishery is                                 
24 subject to the payment of the assessment levied under (d) of this section on the                                        
25 projected value of the shellfish or on the pounds of shellfish harvested. The                                           
26 assessment is levied on the shellfish that the fisherman takes in the special harvest area                              
27 and sells to a licensed buyer. The buyer of the shellfish must be licensed under                                        
28 AS 43.75, and the buyer shall collect the assessment on shellfish taken in a special                                    
29 harvest area at the time of purchase and remit the assessment to the Department of                                      
30       Revenue in accordance with regulations adopted by the Department of Revenue.                                      
31 (d)  The Department of Revenue may, by regulation, annually, by March 1 of                                              
01 each year, set the assessment levied on shellfish taken in a special harvest area in                                    
02 consultation with the Department of Commerce, Community, and Economic                                                   
03 Development, the permit holder, and representatives of affected commercial                                              
04 fishermen. The assessment shall provide sufficient revenue to cover debt service,                                       
05 reasonable operating expenses, reasonable maintenance expenses, and development or                                      
06 maintenance of a reserve fund up to 100 percent of annual operating costs of the                                        
07 permit holder's shellfish enhancement project. In setting the assessment, the                                           
08 department shall consider the estimated harvest of shellfish in the special harvest area,                               
09 the projected price to be paid for shellfish in the region, the amount of the existing                                  
10 reserve held by the permit holder, and the amount by which the assessment collected                                     
11 in previous years exceeded or fell short of the amount anticipated to be collected. The                                 
12 assessment may not exceed 50 percent of the value of the shellfish. The department                                      
13 may levy the assessment as a percentage of the projected value of the shellfish                                         
14 harvested in the special harvest area or as a flat rate on each pound of shellfish                                      
15       harvested in the area, to the nearest whole cent.                                                                 
16 (e)  The Department of Revenue shall deposit the assessments collected under                                            
17 this section in the general fund. The legislature may appropriate the funds collected                                   
18 under this section to the permit holder who is carrying out an enhancement project,                                     
19 including the operation of a facility, in the special harvest area in which the                                         
20 assessment was levied. A permit holder shall use funds appropriated under this                                          
21 subsection for the purposes set out under AS 16.12.080(a). The legislature may also                                     
22 appropriate funds collected under this section to the Department of Revenue for costs                                   
23       incurred by the department under this section.                                                                    
24 (f)  A person who violates a regulation adopted under (b) of this section is                                            
25 guilty of a violation under AS 16.05.722 or a misdemeanor under AS 16.05.723. A                                         
26 person who violates a regulation adopted by the Department of Revenue under (c) of                                      
27       this section is guilty of a class A misdemeanor.                                                                  
28            (g)  In this section,                                                                                        
29 (1)  "special harvest area" means an area designated by the                                                             
30 commissioner or the Board of Fisheries where shellfish may be harvested by permit                                       
31       holders under this chapter and by the common property fishery;                                                    
01                 (2)  "value" has the meaning given in AS 43.75.290.                                                     
02 Sec. 16.12.100. Inspection by the department. (a) A permit holder shall                                               
03 allow the department to inspect the permit holder's enhancement project facility at any                                 
04 time the enhancement project facility is in operation. The department shall conduct the                                 
05       inspection in a reasonable manner.                                                                                
06            (b)  The department shall bear the cost of an inspection performed under this                                
07       section.                                                                                                          
08            Sec. 16.12.110. Annual report. A person who holds a permit under this                                      
09       chapter shall submit an annual report not later than December 15 to the department.                               
10 The report must be made on a form prescribed by the department and contain                                              
11       information pertaining to                                                                                         
12                 (1)  species;                                                                                           
13                 (2)  the brood stock source;                                                                            
14                 (3)  the number, age, gender, and size of spawners;                                                     
15                 (4)  the number of eggs collected and juveniles produced; and                                           
16 (5)  the number, age, gender, and size of harvested shellfish attributable                                              
17       to releases by the permit holder.                                                                                 
18            Sec. 16.12.199. Definitions. In this chapter,                                                              
19                 (1)  "enhancement project" means a project to                                                           
20 (A)  augment the yield and harvest of shellfish above naturally                                                         
21            occurring levels by natural, artificial, or semi-artificial production systems;                              
22 (B)  rehabilitate a shellfish stock by restoring it to its natural                                                      
23            levels of productivity; or                                                                                   
24                      (C)  increase the area of productive natural shellfish habitat;                                    
25 (2)  "facility" means a hatchery or other facility for a shellfish                                                      
26       enhancement project;                                                                                              
27 (3)  "genetically modified shellfish" means shellfish whose genetic                                                     
28 structure has been altered at the molecular level by recombinant DNA and RNA                                            
29 techniques, cell fusion, gene deletion or doubling, introduction of exogenous genetic                                   
30 material, alteration of the position of a gene, or other similar procedure using artificial                             
31       processes;                                                                                                        
01                 (4)  "hatchery" means a facility for the artificial propagation of stock,                               
02 including rearing of shellfish and release of shellfish into the natural water of the state;                            
03 (5)  "shellfish" means a species of crustacean, mollusk, or other                                                       
04       invertebrate, in any stage of its life cycle, that is indigenous to state water.                                  
05    * Sec. 4. AS 16.43.400(a) is amended to read:                                                                      
06            (a)  In addition to entry permits, interim-use permits, and educational permits,                             
07       the commission may issue special harvest area entry permits to                                                    
08                 (1)  holders of private, nonprofit hatchery permits issued by the                                   
09       Department of Fish and Game under AS 16.10.400 - 16.10.475 for salmon; or                                     
10 (2)  nonprofit organizations holding a permit under AS 16.12 for a                                                  
11       shellfish enhancement project.                                                                                
12    * Sec. 5. AS 16.43.430 is amended to read:                                                                         
13 Sec. 16.43.430. Authorized gear. For the purposes of harvesting salmon or                                         
14 shellfish, a special harvest area entry permit holder may employ any fishing gear                                   
15 designated as legal gear in the applicable special harvest area by the Board of                                         
16       Fisheries.                                                                                                        
17    * Sec. 6. AS 17.20.049(b)(1) is amended to read:                                                                   
18 (1)  "farmed fish" means fish that is propagated, farmed, or cultivated                                                 
19 in a facility that grows, farms, or cultivates the fish in captivity or under positive                                  
20 control but that is not a salmon hatchery that is owned by the state or that holds a                                    
21 salmon hatchery permit under AS 16.10.400 or a shellfish facility that is permitted                                 
22 under AS 16.12.010; in this paragraph, "positive control" has the meaning given in                                  
23       AS 16.40.199;                                                                                                     
24    * Sec. 7. AS 43.20.012(a) is amended to read:                                                                      
25            (a)  The tax imposed by this chapter does not                                                                
26                 (1)  apply to an individual;                                                                            
27                 (2)  apply to a fiduciary;                                                                              
28 (3)  for a tax year beginning after December 31, 2012, apply to an                                                      
29 Alaska corporation that is a qualified small business and that meets the active business                                
30       requirement in 26 U.S.C. 1202(e) as that subsection read on January 1, 2012; [OR]                                 
31 (4)  for a tax year beginning after June 30, 2007, apply to the income                                                  
01 received by a regional association qualified under AS 16.10.380 or nonprofit                                            
02 corporation holding a hatchery permit under AS 16.10.400 from the sale of salmon or                                     
03 salmon eggs under AS 16.10.450 or from a cost recovery fishery under AS 16.10.455;                                  
04       or                                                                                                            
05                 (5)  apply to income received by a nonprofit corporation holding a                                  
06       permit under AS 16.12.010 from the sale of shellfish under AS 16.12.080 or from                               
07       a cost recovery fishery under AS 16.12.090.                                                                   
08    * Sec. 8. AS 43.20.012(a), as repealed and reenacted by sec. 2, ch. 55, SLA 2013, is                               
09 amended to read                                                                                                         
10            (a)  The tax imposed by this chapter does not apply to                                                       
11                 (1)  an individual;                                                                                     
12                 (2)  a fiduciary; [OR]                                                                                  
13 (3)  the income received by a regional association qualified under                                                      
14 AS 16.10.380 or nonprofit corporation holding a hatchery permit under AS 16.10.400                                      
15 from the sale of salmon or salmon eggs under AS 16.10.450 or from a cost recovery                                       
16       fishery under AS 16.10.455; or                                                                                
17 (4)  the income received by a nonprofit corporation holding a                                                       
18 permit under AS 16.12.010 from the sale of shellfish under AS 16.12.080 or from                                     
19       a cost recovery fishery under AS 16.12.090.                                                                   
20    * Sec. 9. AS 43.76.390 is amended to read:                                                                         
21 Sec. 43.76.390. Exemption. AS 43.76.350 - 43.76.399 do not apply to salmon                                            
22 or shellfish harvested under a special harvest area entry permit issued under                                       
23       AS 16.43.400.                                                                                                     
24    * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to                         
25 read:                                                                                                                   
26 APPLICABILITY. AS 16.10.400(b), as amended by sec. 2 of this Act, applies to                                            
27 salmon hatchery permits applied for on or after the effective date of sec. 2 of this Act.                               
28    * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to                         
29 read:                                                                                                                   
30 TRANSITION: REGULATIONS. The Department of Fish and Game may adopt                                                      
31 regulations necessary to implement this Act. The regulations take effect under AS 44.62                                 
01 (Administrative Procedure Act), but not before the effective date of the law implemented by                             
02 the regulation.                                                                                                         
03    * Sec. 12. Section 11 of this Act takes effect immediately under AS 01.10.070(c).                                  
04    * Sec. 13. Section 8 of this Act takes effect on the effective date of sec. 2, ch. 55, SLA                         
05 2013.