Legislature(2007 - 2008)CAPITOL 124

01/22/2007 08:00 AM House FISHERIES


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08:14:12 AM Start
08:14:22 AM Overview: Alaska Hatchery Issues and Operations
08:25:04 AM Overview: Northern Southeast Regional Aquaculture Association (nsraa)
08:58:30 AM Overview: Douglas Island Pink and Chum (dipac)
09:09:51 AM Overview: Cook Inlet Aquaculture Association (ciaa)
09:45:54 AM Overview: Prince William Sound Aquaculture Corporation (pwsac)
09:56:42 AM Overview: Southern Southeast Regional Aquaculture Association (ssraa)
10:06:16 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Overviews: TELECONFERENCED
-Alaska Hatchery Issues and Operations
-Southern Southeast Regional Aquaculture
& Northern Southeast Regional Aquaculture
Associations
-Douglas Island Pink and Chum
-Prince William Sound Aquaculture Assoc.
-Cook Inlet Aquaculture Association
                    ALASKA STATE LEGISLATURE                                                                                  
              HOUSE SPECIAL COMMITTEE ON FISHERIES                                                                            
                        January 22, 2007                                                                                        
                           8:14 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Paul Seaton, Chair                                                                                               
Representative Kyle Johansen                                                                                                    
Representative Gabrielle LeDoux                                                                                                 
Representative Peggy Wilson                                                                                                     
Representative Bryce Edgmon                                                                                                     
Representative Lindsey Holmes                                                                                                   
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative John Harris                                                                                                      
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                              
OVERVIEW(S):                                                                                                                    
                                                                                                                                
ALASKA HATCHERY ISSUES AND OPERATIONS                                                                                           
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
NORTHERN SOUTHEAST REGIONAL AQUACULTURE ASSOCIATION (NSRAA)                                                                     
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
DOUGLAS ISLAND PINK AND CHUM (DIPAC)                                                                                            
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
COOK INLET AQUACULTURE ASSOCIATION (CIAA)                                                                                       
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PRINCE WILLIAM SOUND AQUACULTURE CORPORATION (PWSAC)                                                                            
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
SOUTHERN SOUTHEAST REGIONAL AQUACULTURE ASSOCIATION (NSRAA)                                                                     
                                                                                                                                
     - HEARD                                                                                                                    
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
No previous action to report                                                                                                    
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ERIC PRESTEGARD, Executive Director                                                                                             
Douglas Island Pink and Chum (DIPAC)                                                                                            
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT:   Provided an  introduction to  the regional                                                               
enhancement  associations   and  the  private   non-profit  (PNP)                                                               
hatcheries throughout Alaska, presented  an overview of the DIPAC                                                               
hatcheries, and responded to questions.                                                                                         
                                                                                                                                
PETE ESQUIRO, General Manager                                                                                                   
Northern Southeast Regional Aquaculture Association (NSRAA)                                                                     
Sitka, Alaska                                                                                                                   
POSITION STATEMENT:   Presented an overview  of NSRAA hatcheries,                                                               
and responded to questions.                                                                                                     
                                                                                                                                
GARY FANDREI, Executive Director                                                                                                
Cook Inlet Aquaculture Association (CIAA)                                                                                       
Anchorage, Alaska                                                                                                               
POSITION STATEMENT:   Presented  an overview of  CIAA hatcheries,                                                               
and responded to questions.                                                                                                     
                                                                                                                                
DAVID REGGIANI, General Manager                                                                                                 
Prince William Sound Aquaculture Corporation (PWSAC)                                                                            
Cordova, Alaska                                                                                                                 
POSITION STATEMENT:   Presented an overview  of PWSAC hatcheries,                                                               
and responded to questions.                                                                                                     
                                                                                                                                
JOHN BURKE, General Manager                                                                                                     
Southern Southeast Regional Aquaculture Association (SSRAA)                                                                     
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT:   Presented an overview  of SSRAA hatcheries,                                                               
and responded to questions.                                                                                                     
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CHAIR  PAUL   SEATON  called  the  House   Special  Committee  on                                                             
Fisheries  meeting  to  order at  8:14:12  AM.    Representatives                                                             
Wilson, LeDoux,  Holmes, and Edgmon  were present at the  call to                                                               
order.   Representative Johansen  arrived as  the meeting  was in                                                               
progress.                                                                                                                       
                                                                                                                                
^OVERVIEW: ALASKA HATCHERY ISSUES AND OPERATIONS                                                                              
                                                                                                                                
8:14:22 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced that the  first order of business would be                                                               
to hear an overview of  the regional aquaculture associations and                                                               
non-profit hatcheries located throughout the Gulf of Alaska.                                                                    
                                                                                                                                
8:14:46 AM                                                                                                                    
                                                                                                                                
ERIC  PRESTEGARD, Executive  Director,  Douglas  Island Pink  and                                                               
Chum (DIPAC)  provided an introduction to  the private non-profit                                                               
(PNP)  hatcheries located  throughout the  state.   He named  the                                                               
various  regions and  the association  representatives from  each                                                               
region who would be addressing the committee.                                                                                   
                                                                                                                                
8:17:07 AM                                                                                                                    
                                                                                                                                
MR. PRESTEGARD explained  how the state was  divided into regions                                                               
for the purpose of fishery  enhancement, and projected a slide to                                                               
illustrate the  regional boundaries.   He followed with  a series                                                               
of graphs beginning with Start  of the Hatchery Program in Alaska                                                               
-  Commercial Salmon  Harvest, which  illustrated the  commercial                                                               
fisheries  catch  from  1884-2004,  and the  effect  of  hatchery                                                               
enhancement on  the catch.   A downturn of wild  stocks occurred,                                                               
in the late  1960's, creating the catalyst  for stock enhancement                                                               
that began  in 1971.   The  graph indicated  the contrast  of the                                                               
enhanced vs. wild production, since that time.                                                                                  
                                                                                                                                
MR.  PRESTEGARD presented  the next  graph illustrating  hatchery                                                               
development, and indicating  the peak of that  development in the                                                               
1980's.    He said  that  some  state  built facilities  are  now                                                               
operated  by the  private non-profit  sector  or the  aquaculture                                                               
associations.                                                                                                                   
                                                                                                                                
8:18:18 AM                                                                                                                    
                                                                                                                                
MR. PRESTEGARD  provided the  next graph  in the  series entitled                                                               
Alaska  Hatchery  Production,  to  indicate egg  takes  and  fish                                                               
releases  from  1975 to  current.    He  pointed out  that  these                                                               
numbers   have  been   consistent  and   stable  since   1990  at                                                               
approximately  1.5 (million)  fish released.   A  graph, entitled                                                               
Total Hatchery Returns illustrated  the stabilization of the fish                                                               
returns at  the 50,000  fish level, with  slight variation.   The                                                               
subsequent slide,  Harvest of Alaskan  Wild and  Enhanced Salmon,                                                               
provided a  breakout indicating the  enhanced vs. wild  stocks to                                                               
be  approximately  20-25  percent  of   the  total.    The  slide                                                               
Contributions  to  the  Commercial   Common  Property  Harvest  -                                                               
Composition   of  Commercial   Salmon  Harvest,   represented  an                                                               
analysis  of  the  same  data to  indicate  the  hatcheries  cost                                                               
recovery  on  the  reported  catch  returns.    He  reminded  the                                                               
committee that  all cost recovery funds  are used to pay  for the                                                               
enhancement programs.   He  introduced the  next slide,  Value of                                                               
Alaska's Hatcheries,  again utilizing the same  data to highlight                                                               
the economic  value that the  hatcheries have contributed  to the                                                               
common  property  commercial  harvest, $874  million,  contrasted                                                               
with the  cost recovery harvest,  $292 million, over the  span of                                                               
years 1984-2005.  He underscored  that this $292 million pays for                                                               
the loans  and other  costs related  to building  the enhancement                                                               
programs.                                                                                                                       
                                                                                                                                
8:20:06 AM                                                                                                                    
                                                                                                                                
MR.  PRESTEGARD  responding  to a  question  from  Representative                                                               
Wilson,  stated that,  as the  original loans  are paid  off, the                                                               
amount  of  cost  recovery  fish   taken  by  the  hatcheries  is                                                               
decreased, and  additional fish  are allowed to  be taken  in the                                                               
common property catch.  He  also clarified that the cost recovery                                                               
harvest benefits  the hatchery,  and the common  property harvest                                                               
benefits all other  user groups.  He pointed out  that a hatchery                                                               
return does  not occur for  a number of years  following release,                                                               
depending  on   the  species.    During   these  years,  on-going                                                               
operational  costs  are incurred  by  the  hatchery; making  cost                                                               
recovery an important aspect of the fish return harvest.                                                                        
                                                                                                                                
MR. PRESTEGARD  responding to a follow-up  question, he confirmed                                                               
that  user tax  fees  exist, and  explained  that the  individual                                                               
regions establish this tax as a  percentage of the catch.  In the                                                               
Southeast region  a 3 percent  tax exists on the  common property                                                               
catch,  to benefit  enhancement  activities of  the Northern  and                                                               
Southern Southeast  Regional Aquaculture Associations  (NSRAA and                                                               
SSRAA).                                                                                                                         
                                                                                                                                
8:22:53 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON underscored that the  common property fishery refers                                                               
to the  returned fish which are  in excess of what  is needed for                                                               
hatchery cost recovery.                                                                                                         
                                                                                                                                
MR. PRESTEGARD  directed the committee's  attention to  the slide                                                               
entitled Contributions to the  Commercial Common Property Harvest                                                               
- Composition of  Commercial Salmon Harvest, and  pointed out the                                                               
cost recovery  average indication of  33 percent.   The remaining                                                               
67 percent  of the  returning fish  caught were  common property.                                                               
For clarity,  he stated  that this figure  represents a  count of                                                               
fish caught, not the commercial value of the fish.                                                                              
                                                                                                                                
8:23:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHANSEN inquired  what the level of  debt for the                                                               
existing enhancement organizations would approximate.                                                                           
                                                                                                                                
MR. PRESTEGARD  estimated that  $124 million  in loans  have been                                                               
provided over the  last 25 years and suggested  that the Division                                                               
of  Investments could  best approximate  the current  outstanding                                                               
debt.                                                                                                                           
                                                                                                                                
8:24:37AM                                                                                                                     
                                                                                                                                
REPRESENTATIVE  HOLMES asked  if the  common property  tax varies                                                               
between regions.                                                                                                                
                                                                                                                                
MR. PRESTEGARD responded  that in the Southeast it  is 3 percent,                                                               
but in Prince William Sound and Cook Inlet it is 2 percent.                                                                     
                                                                                                                                
CHAIR  SEATON  interjected  that   these  assessment  rates  were                                                               
established  by vote  in  each region,  in  conjunction with  the                                                               
establishment  of the  aquaculture associations.   This  fund and                                                               
the cost recovery catch support the enhancement facilities.                                                                     
                                                                                                                                
^OVERVIEW:   NORTHERN SOUTHEAST REGIONAL  AQUACULTURE ASSOCIATION                                                             
(NSRAA)                                                                                                                       
                                                                                                                                
8:25:04 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
an  overview  of  the  Northern  Southeast  Regional  Aquaculture                                                               
Association (NSRAA).                                                                                                            
                                                                                                                                
8:25:18 AM                                                                                                                    
                                                                                                                                
PETE  ESQUIRO,  General   Manager,  Northern  Southeast  Regional                                                               
Aquaculture  Association (NSRAA),  described the  area which  his                                                               
district encompasses:  the inside and outside  waters of District                                                               
16 ranging from  the south end of Baranof Island  to Skagway.  He                                                               
proclaimed  that  he  is  a  pioneer in  the  private  sector  of                                                               
fisheries enhancement in Alaska, having  entered his 25th year of                                                               
service, and being an elder to others in the field.                                                                             
                                                                                                                                
8:26:49 AM                                                                                                                    
                                                                                                                                
MR. ESQUIRO  stated that NSRAA  operates two  primary hatcheries:                                                               
one at  Hidden Falls, and  one at  Medvejie Creek.   Hidden Falls                                                               
began   as  a   state   hatchery,  operated   by  the   Fisheries                                                               
Rehabilitation   and   Enhancement    Division   (FRED),   Alaska                                                               
Department of  Fish & Game (ADF&G).   When FRED was  being scaled                                                               
back,  NSRAA obtained  a  twenty year  contract  to operate  this                                                               
facility.  At  the time of the change over  from state to private                                                               
hatchery, the capacity  for the hatchery was 20  million fed chum                                                               
fry, and 20  million unfed chum fry.  Today,  he reported, Hidden                                                               
Falls is  producing over 100 million  fry.  He described  this as                                                               
being  a successful  hatchery producing  cohos, kings,  and chum.                                                               
The Sitka,  Medvejie Creek hatchery  was built in 1984  by NSRAA,                                                               
and is  half the size  of the   Hidden Falls facility.   Medvejie                                                               
hatchery provides fish for the  Deep Inlet fishery.  This fishery                                                               
is   a   productive   rotational  fishery,   involving   seiners,                                                               
gillnetters,  and  trollers.     Further,  he  stated  that  this                                                               
hatchery is the largest king  salmon hatchery project operated by                                                               
NSRAA,  collecting  between  3-4  million king  salmon  eggs  for                                                               
rearing and release.  Marine survival  varies but this has been a                                                               
consistent  fishery over  the years.   Experimental  programs are                                                               
conducted  out  of  NSRAA  hatcheries  in  attempts  to  be  more                                                               
efficient with feed,  and other steps which may  prove helpful to                                                               
the industry as a whole.                                                                                                        
                                                                                                                                
8:30:14 AM                                                                                                                    
                                                                                                                                
MR.  ESQUIRO  described  the Deer  Lake,  coho  salmon  hatchery,                                                               
operated on  Southeast Baranof  Island.   He explained  that eggs                                                               
are collected  from natural run coho,  at the base of  a 300 foot                                                               
waterfall out  flowing from  the lake.   The  waterfall prohibits                                                               
fish from  entering Deer Lake,  making it essentially  a fishless                                                               
lake,  although the  limnology of  the lake  easily supports  the                                                               
rearing  of coho  fry  to  smolt age.    The  collected eggs  are                                                               
spawned at Medveje Creek hatchery,  then transported back to Deer                                                               
Lake  via  plan,  and  are  reared  in  the  lake  under  natural                                                               
conditions, with no  food enhancements.  Through  a bypass system                                                               
they  are   recollected  and  "pipelined"  back   to  sea  level,                                                               
saltwater  net pens  where they  imprint  for 24  hours prior  to                                                               
release  into  the wild.    This  has  proven  to be  a  workable                                                               
operation,  involving  15  years   of  research  and  support  in                                                               
cooperation with FRED.   Despite its success and  benefits to the                                                               
fishery, without the  support of FRED, this operation  has had to                                                               
be scaled back.                                                                                                                 
                                                                                                                                
8:32:21 AM                                                                                                                    
                                                                                                                                
MR.  ESQUIRO  stated  that  NSRAA maintains  a  field  office  in                                                               
Haines,  manned by  a biologist,  temporary, and  seasonal staff.                                                               
Primarily,  he  said,  incubation  boxes are  the  focus  of  the                                                               
operation.  Chum  salmon eggs are collected and  incubated in the                                                               
boxes, keeping  them safe  from adverse  winter conditions.   The                                                               
eggs are then hatched and released  in the spring.  This provides                                                               
protection for  5-6 million  eggs in the  Haines area.   Spawning                                                               
channels are  also utilized in  the Haines area.   These projects                                                               
are possible due to the  favorable ground water sources unique to                                                               
Haines.   Through excavation, high quality  spawning channels are                                                               
created for chum  salmon.  Responding to  Representative  Wilson,                                                               
he  explained  that  this  spawning  channel  technology  is  not                                                               
possible  in  all areas  due  to  the  ground water  quality  and                                                               
sources.  Haines is the only  area in Northern Southeast which is                                                               
capable  of  sustaining this  type  of  enhanced habitat.    With                                                               
appropriations obtained  by Representative Thomas, of  Haines, an                                                               
expanded spawning channel system is being funded this year.                                                                     
                                                                                                                                
8:35:04 AM                                                                                                                    
                                                                                                                                
MR. ESQUIRO  reported that NSRAA  works cooperatively  with state                                                               
and  federal  agencies to  build  fish  ladders, supply  fry  for                                                               
enhancement  projects, and  other  improvements  to "jump  start"                                                               
fisheries.  The Division of  Sport Fish (SF), ADF&G, projects are                                                               
also recipients of fish stocks for the division's projects.                                                                     
                                                                                                                                
MR.  ESQUIRO pointed  out  that the  goal of  NSRAA  has been  to                                                               
provide a contribution of 70 percent  of the return catch for the                                                               
common property  fishery, and take  30 percent for  hatchery cost                                                               
recovery  and  brood stock  needs.    Until recently,  NSRAA  has                                                               
actually averaged a credible 80:20  ratio.  Although the goal has                                                               
not changed, during  the last couple of years NSRAA  has not been                                                               
able to maintain  the higher contribution to  the common property                                                               
fishery.                                                                                                                        
                                                                                                                                
MR.  ESQUIRO  informed  the  committee  that  the  original  debt                                                               
carried  by NSRAA  has been  repaid.   Currently, however,  a new                                                               
debt  of 2.8  million was  incurred for  operational purposes  to                                                               
establish  a new  hatchery for  coho salmon,  in the  Sitka area.                                                               
The  physical structure  will be  funded by  a federal  grant, he                                                               
reported.                                                                                                                       
                                                                                                                                
8:39:14 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   JOHANSEN  requested   an   explanation  of   the                                                               
enhancement tax, imposed  on the commercial fleet,  and whether a                                                               
hatcheries indebtedness effects the tax rate.                                                                                   
                                                                                                                                
MR. ESQUIRO responded that the  enhancement tax remains the same;                                                               
3 percent  for NSRAA.   He further explained that  three quarters                                                               
of  the association's  operating budget  is supported  by a  cost                                                               
recovery fishery,  with the remaining one  quarter being supplied                                                               
by the  enhancement tax.   To a follow-up question,  he responded                                                               
that coming out of debt allows  the hatchery to reduce the number                                                               
of fish taken  for cost recovery and increase the  number of fish                                                               
available for the  common property fishery.  He  pointed out that                                                               
since  1980,  the enhancement  tax  received  by NSRAA  has  been                                                               
approximately $28 million, and the  common property harvest catch                                                               
has been approximately $148 million; a cost effective ratio.                                                                    
                                                                                                                                
8:41:30 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  asked  if  the   hatcheries  cost  recovery  sales                                                               
influence the  ground price received  by the fishermen  for their                                                               
catch.                                                                                                                          
                                                                                                                                
MR.  ESQUIRO  opined  that  the cost  recovery  sales  provide  a                                                               
positive influence on the price  which the fishermen are paid for                                                               
their catch.   He further described the cost  recovery bid system                                                               
that  NSRAA uses  to maintain  a diversified  portfolio for  fund                                                               
receipts.    This encompasses  all  of  the species  which  NSRAA                                                               
enhances  and  the   various  hatchery  and  freshwater/saltwater                                                               
enhancement projects  that the association undertakes.   He noted                                                               
that  not  every  program  will be  cost  effective  every  year,                                                               
however,  barring a  total project  failure, the  diversification                                                               
has allowed NSRAA to maintained a  workable budget.  Bids for the                                                               
cost recovery catch  are established early in the  season and are                                                               
awarded  to the  highest bidder;  overall commanding  respectable                                                               
prices.  He  described the positive relationship  which NSRAA has                                                               
maintained with the fish processors  over the years.  Further, he                                                               
offered an  example of how the  price for cost recovery  fish can                                                               
increase the price paid for the common property catch.                                                                          
                                                                                                                                
8:46:01 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  referred to the  permit buy back program  and asked                                                               
if NSRAA anticipates any repercussions due to this program.                                                                     
                                                                                                                                
MR. ESQUIRO responded  that there should not be any  effects.  To                                                               
a  follow-up  question he  responded  that  chum salmon  are  the                                                               
primary focus of NSRAA.                                                                                                         
                                                                                                                                
8:47:19 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON  asked if  the other  regional associations                                                               
have been able to maintain similarly successful operations.                                                                     
                                                                                                                                
MR.   ESQUIRO   refrained   from   responding   for   the   other                                                               
associations.                                                                                                                   
                                                                                                                                
8:48:10 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  inquired which agency  sets the Deep  Inlet fishery                                                               
allocations.                                                                                                                    
                                                                                                                                
MR.  ESQUIRO answered  that NSRAA  operates  under the  Southeast                                                               
Enhanced Allocation Permit,  a plan approved by  the Alaska Board                                                               
of Fisheries.   Allocation permits are based  on historical catch                                                               
formulas and  effects all of  the Southeast fisheries;   although                                                               
the  Deep Inlet  fishery  was  begun before  this  scheme was  in                                                               
place.                                                                                                                          
                                                                                                                                
8:49:37 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  requested  further  information  on  the  egg  box                                                               
operation taking place in Haines,  and how successful the program                                                               
is for enhancement to the area.                                                                                                 
                                                                                                                                
MR.  ESQUIRO responded  that approximately  65-75 percent  of the                                                               
return catch is  possibly from these egg box  releases.  However,                                                               
he said it is not easy  to accurately enumerate releases from out                                                               
of  these boxes,  and stated  this project  is "just  ... helping                                                               
Mother Nature  along."  He  clarified that this  program utilizes                                                               
the same  egg collection and  spawning techniques as are  used at                                                               
the hatchery  operations.   In further  response, he  pointed out                                                               
that a wild spawn return averages only 22 percent.                                                                              
                                                                                                                                
8:52:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  asked for clarification on  the difference                                                               
between what NSRAA does by rearing fish vs. salmon farming.                                                                     
                                                                                                                                
MR. ESQUIRO  responded that a  comparison could be  drawn between                                                               
this type of enhancement and a  free range rancher.  These salmon                                                               
are considered wild reared fish.                                                                                                
                                                                                                                                
CHAIR  SEATON pointed  out that  the  brood stocks  are all  wild                                                               
salmon and not continuous pen-reared fish.                                                                                      
                                                                                                                                
8:53:24 AM                                                                                                                    
                                                                                                                                
MR. ESQUIRO closed  by stating that it would be  helpful to NSRAA                                                               
for  the  committee to  consider  providing  a means  of  support                                                               
similar to that  which was being provided by FRED.   The research                                                               
and    development    expertise     was    essential,    and    a                                                               
knowledge/resource  vacuum has  been  left in  the  wake of  this                                                               
division's closure.   He  stated, that this  lack of  support has                                                               
stifled the scope and level  of enhancement projects conducted by                                                               
NSRAA.  Having  been in the field of enhancement  in Alaska since                                                               
its  inception, he  underscored  that this  credible program  has                                                               
proven its  value to  the coastal  communities, which  it serves.                                                               
He stressed  the need for  further fisheries  enhancement support                                                               
from ADF&G.                                                                                                                     
                                                                                                                                
CHAIR SEATON requested that  written recommendations be submitted                                                               
to the  committee specifying the  areas of support that  would be                                                               
helpful for NSRAA.                                                                                                              
                                                                                                                                
^OVERVIEW:  DOUGLAS ISLAND PINK AND CHUM (DIPAC)                                                                              
                                                                                                                                
8:58:30 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
a  presentation  of the  Douglas  Island  Pink and  Chum  (DIPAC)                                                               
private non-profit (PNP) hatchery.                                                                                              
                                                                                                                                
ERIC  PRESTEGARD, Executive  Director,  Douglas  Island Pink  and                                                               
Chum  (DIPAC)  echoed  Mr.  Esquiro's  request  for  departmental                                                               
support to benefit all of  the PNP hatcheries and the aquaculture                                                               
associations.   He  then provided  a brief  history of  the DIPAC                                                               
organization from it's  inception in 1976 as a  pilot hatchery at                                                               
Kowee Creek,  Douglas Island,  and expanding  to the  Sheep Creek                                                               
Hatchery,  Thane,  the  Macaulay  Hatchery,  three  mile  Glacier                                                               
Highway, Juneau, and finally the  assumption of operations at the                                                               
state built hatchery in Snettisham, Stephens Passage.                                                                           
                                                                                                                                
9:00:12 AM                                                                                                                    
                                                                                                                                
MR.  PRESTEGARD reported  that DIPAC  has  a 32  member board  of                                                               
directors,   providing   a   diverse  representation   from   the                                                               
community.   The  Macaulay  hatchery  produces approximately  116                                                               
million  chum  salmon,  800,000 king  salmon,  and  600,000  coho                                                               
salmon annually.   The coho are targeted for the  troll and sport                                                               
fishing fleets, and  the king salmon are released in  a number of                                                               
locations  throughout the  Juneau  area to  enhance the  roadside                                                               
fishery.   In a joint  project with the  City of Skagway  and the                                                               
Alaska Department  of Fish  & Game  (ADF&G), 200,000  king salmon                                                               
are also  released in Skagway.   The chum salmon are  released in                                                               
Gastineau Channel,  in Stephens  Passage at Limestone  Inlet, and                                                               
in Lynn Canal at Amalga Harbor and Boat Harbor.                                                                                 
                                                                                                                                
9:01:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  WILSON asked  for  further information  regarding                                                               
the release of king salmon by DIPAC in the Skagway area.                                                                        
                                                                                                                                
MR. PRESTEGARD  responded that this  is a ten year  project which                                                               
involves  a brood  stock  exchange, and  does  not conflict  with                                                               
Northern  Southeast  Regional   Aquaculture  Association  (NSRAA)                                                               
operations.                                                                                                                     
                                                                                                                                
9:02:34 AM                                                                                                                    
                                                                                                                                
MR.  PRESTEGARD responding  to Chair  Seaton, stated  that, as  a                                                               
PNP,  DIPAC  does  not  receive   a  portion  of  the  3  percent                                                               
enhancement  tax  available to  the  regional  associations.   He                                                               
explained that  DIPAC cost recovery rates  fluctuate, from taking                                                               
40-60  percent of  the returned  catch, and  added that  the wild                                                               
stock returns influence this figure.                                                                                            
                                                                                                                                
MR. PRESTEGARD  provided a  slide showing  a contribution  of 1.5                                                               
million  chum, in  2006,  to  the gillnet  harvest.   An  overall                                                               
contribution of 43  percent, or $3 million, of  the gillnet catch                                                               
throughout the region was realized due to DIPAC returns.                                                                        
                                                                                                                                
9:04:42 AM                                                                                                                    
                                                                                                                                
MR.  PRESTEGARD  presented a  slide  of  the Snettisham  Hatchery                                                               
annual  release  statistics,  which illustrated  that  9  million                                                               
sockeye smolts  are released directly  from the hatchery,  and 12                                                               
million fry are  distributed in lakes.   The distribution program                                                               
is  in  conjunction  with  the  Pacific  Salmon  Treaty;  working                                                               
cooperatively with the Canadian government  to stock lakes in the                                                               
Taku  and  Stikine  River  systems.    For  the  benefit  of  the                                                               
committee he defined fry as an  egg that is incubated and hatched                                                               
at the  facility then transported to  a lake where they  rear for                                                               
one year  prior to migrating  out to sea.   Smolt are  reared and                                                               
fed  for the  first year  of maturity  in the  hatchery, and  are                                                               
released directly from the facility to the sea.                                                                                 
                                                                                                                                
9:06:29 AM                                                                                                                    
                                                                                                                                
MR.  PRESTEGARD  projected a  graph  to  illustrate the  hatchery                                                               
contributions to  the various fisheries  at the goal level  of 60                                                               
percent.   Chum salmon  make up  the heart  of the  DIPAC program                                                               
with  king, coho,  and sockeye  as supplemental  species.   Since                                                               
operations  began,  DIPAC  has contributed  $42  million  to  the                                                               
common  property  fishery.   Finally,  he  invited the  committee                                                               
members  to visit  the Macaulay  Hatchery.   He pointed  out that                                                               
being  located  in  the  city, this  facility  maintains  a  high                                                               
profile visitor center with a strong educational component.                                                                     
                                                                                                                                
^OVERVIEW:  COOK INLET AQUACULTURE ASSOCIATION (CIAA)                                                                         
                                                                                                                                
9:09:51 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
a presentation by the Cook Inlet Aquaculture Association CIAA.                                                                  
                                                                                                                                
9:10:19 AM                                                                                                                    
                                                                                                                                
GARY   FANDREI,  Executive   Director,  Cook   Inlet  Aquaculture                                                               
Association  (CIAA) introduced  this association  as having  been                                                               
created through  state legislation.   At  the time  of inception,                                                               
the Cook  Inlet fishermen voted  to provide  a 2 percent  tax, on                                                               
their catch, to support CIAA fishery enhancement.                                                                               
                                                                                                                                
REPRESENTATIVE LEDOUX asked if this tax is voted on yearly.                                                                     
                                                                                                                                
GARY FANDREI explained that this  tax is initially established by                                                               
a  one time  vote, however,  there is  a procedure  for making  a                                                               
change.                                                                                                                         
                                                                                                                                
REPRESENTATIVE  WILSON interjected  that  an effect  on the  cost                                                               
recovery harvest, along with other  ramifications, will occur, if                                                               
a harvest tax undergoes change.                                                                                                 
                                                                                                                                
CHAIR  SEATON stated  that  the 2006  Legislature  passed a  bill                                                               
which allowed for   abolishment of a cost recovery  harvest by an                                                               
association, but allowed for incremental  increases of the tax on                                                               
the common  property catch  to be  paid for  enhancement support.                                                               
This  opportunity  has  not  been  acted upon  to  date,  but  it                                                               
represents  an   option  to  the  cost   recovery  mechanism  for                                                               
enhancement facilities.   Apparently,  he stated,  some fishermen                                                               
believed  that it  would  be advantageous  to  have sole  harvest                                                               
access to  the returning  stocks and pay  a higher  percentage of                                                               
their total catch to the association.                                                                                           
                                                                                                                                
9:15:26 AM                                                                                                                    
                                                                                                                                
MR. FANDREI  stated the mission  of CIAA  as being:   "To protect                                                               
self perpetuating salmon stocks and  the habitats upon which they                                                               
depend."     Rehabilitation   of   salmon  stocks   to  be   self                                                               
perpetuating populations is also an  emphasis.  The key issue for                                                               
CIAA is to  maximize the value of the Cook  Inlet common property                                                               
resource through the application of  science and technology.  For                                                               
CIAA the  Anchorage bowl area fishery  is the focus.   Due to the                                                               
concentration of Alaska's population being  in this area, many of                                                               
the statewide habitat  issues which arise tend to  stem from this                                                               
region.                                                                                                                         
                                                                                                                                
9:17:19 AM                                                                                                                    
                                                                                                                                
MR. FANDREI  named Kenai  as home  of the  association's regional                                                               
headquarters.   The Eklutna  hatchery was built  and is  owned by                                                               
CIAA as a primary facility.   This hatchery is currently operated                                                               
on a  part-time basis as a  back-up to the Trail  Lakes hatchery.                                                               
Trail  Lakes  is   located  at  Moose  Pass,   in  central  Kenai                                                               
Peninsula.  Trail Lakes is a  state owned hatchery leased to CIAA                                                               
for  twenty years;  currently in  the seventeenth  year.   In the                                                               
lower part of the Kenai Peninsula  is the Tutka Bay hatchery.  He                                                               
said that  this pink salmon  facility is no longer  in operation,                                                               
having released  fish for the  last time in  2004.  The  5-6 cent                                                               
per pound market price of pink  salmon forced the closure of this                                                               
hatchery.  The  area is, however, being used as  a remote release                                                               
site for a CIAA sockeye program.                                                                                                
                                                                                                                                
9:18:43 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON inquired what debt CIAA is carrying.                                                                      
                                                                                                                                
MR.   FANDREI    responded   that   loans    originally   totaled                                                               
approximately $4.5 million, with the  current debt at $2 million.                                                               
He reported that the repayment has not been an undue burden.                                                                    
                                                                                                                                
9:19:04 AM                                                                                                                    
                                                                                                                                
MR.  FANDREI drew  attention to  a slide  illustrating secondary,                                                               
non-hatchery facilities operated  by CIAA.  In the  Seward area a                                                               
weir  site provides  a small  raceway complex,  and on  the lower                                                               
west side  of Cook Inlet  is the Paint  River fish ladder.   This                                                               
ladder  was built  by CIAA  but  to date  has not  been put  into                                                               
operation  due  to funding  priorities  being  directed to  other                                                               
projects.   Also present  in the  Cook Inlet  area are  two state                                                               
operated  hatcheries,  as well  as  a  facility at  Port  Graham.                                                               
Additionally, the state hatcheries at  Crooked Creek and Big Lake                                                               
were closed and have subsequently been utilized by CIAA.                                                                        
                                                                                                                                
9:20:31 AM                                                                                                                    
                                                                                                                                
MR. FANDREI said CIAA operates  stocking projects for sockeye and                                                               
coho salmon.   Annually,  18-20 million  sockeye and  1.5 million                                                               
coho, smolts  and fry,  are released.   Additional  coho releases                                                               
have  been  made  in  the   communities  of  Seward,  Homer,  and                                                               
Seldovia, where the municipalities  have provided funding to CIAA                                                               
for enhancement.                                                                                                                
                                                                                                                                
9:21:18 AM                                                                                                                    
                                                                                                                                
MR.  FANDREI stated  that CIAA  also  operates a  number of  flow                                                               
control  structures  that  assist  wild  fish  to  achieve  their                                                               
spawning   grounds   in  low   water   years.     Responding   to                                                               
Representative Wilson, he clarified  that this is accomplished on                                                               
small  creeks   by  creating  dams  to   increase  water  levels.                                                               
Additionally,  CIAA   uses  helicopters  for  access   to  remote                                                               
locations to  breach beaver dams  and provide water flow  for the                                                               
returning salmon.   In  the last  couple of  years this  has been                                                               
critical  and many  fish have  died during  low water  conditions                                                               
despite efforts, he said.                                                                                                       
                                                                                                                                
9:23:18 AM                                                                                                                    
                                                                                                                                
MR. FANDREI presented a slide  which indicated the sites for fish                                                               
monitoring  activities.   This  is  a  joint effort  with  Alaska                                                               
Department  of Fish  & Game  (ADF&G) to  collect information  for                                                               
fisheries  management.     He  provided   examples  of   how  the                                                               
monitoring projects  can provide critical assessment  data to the                                                               
department, assisting the process  of making in-season management                                                               
decisions.   The CIAA habitat  projects include:   correcting low                                                               
dams, replacing culverts, and  installing temporary fish ladders.                                                               
These habitat projects are  primarily accomplished in cooperation                                                               
with local community groups.                                                                                                    
                                                                                                                                
9:25:33 AM                                                                                                                    
                                                                                                                                
MR. FANDREI  reported that  CIAA initiated  an intern  program in                                                               
2005.    Universities  and students  throughout  the  continental                                                               
Unites States responded to a  web site posting, which resulted in                                                               
5  interns participated  from 3  states.   This program  provides                                                               
needed manpower  for projects, and  is also a means  to cultivate                                                               
potential  employees.   The program  was expanded  to receive  26                                                               
students from six  states, in 2006.  The expectation  for 2007 is                                                               
that 40 interns  will be arriving from the  lower states, Canada,                                                               
and Australia.   It is  also valuable a  bonus to have  access to                                                               
the professors who  are attached to the interns.   In response to                                                               
a question from Representative Wilson,  he reported that interest                                                               
from  the University  of  Alaska  has not  been  present via  the                                                               
current  website announcement,  however,  plans  call for  direct                                                               
contact  efforts   at  in-state   campuses  to   encourage  local                                                               
participation.                                                                                                                  
                                                                                                                                
9:28:33 AM                                                                                                                    
                                                                                                                                
MR.  FANDREI presented  the  current major  needs  and issues  of                                                               
CIAA.   This includes  improving the  public perception/outreach.                                                               
The CIAA  has experienced the  presence of misconceptions  in the                                                               
Anchorage  bowl   area,  of  the   role  which   the  aquaculture                                                               
association plays  in the community.   He  opined that this  is a                                                               
statewide  issue,  and  expressed  hope   that  a  facet  of  the                                                               
internship  program will  address this  somewhat.   Additionally,                                                               
the  loss   of  the  Fisheries  Rehabilitation   and  Enhancement                                                               
Division (FRED),  ADF&G, has  had a critical  impact on  CIAA, as                                                               
with the other regional associations.   To offset this loss, CIAA                                                               
has entered  into cooperative agreements with  private companies,                                                               
such as  the Sea Life  Center, located in  Seward, as well  as an                                                               
East Coast  company with  an expertise in  smolt production.   He                                                               
underscored the loss  of FRED, as having been  a valuable support                                                               
from ADF&G.                                                                                                                     
                                                                                                                                
9:29:58 AM                                                                                                                    
                                                                                                                                
MR.  FANDREI  finished  by   describing  the  association's  base                                                               
funding  issue.    The  need  for  consistency  in  a  budget  is                                                               
important, he  stressed, and the  enhancement tax  has fluctuated                                                               
from a  $1.5 million floating  average to the current  average of                                                               
$190 thousand.   This change is a especially  difficult for CIAA,                                                               
as  production is  targeted at  sockeye  salmon.   The long  life                                                               
cycle  of the  sockeye salmon,  5-6 years,  means that  CIAA must                                                               
make budget  adjustments six  years out;  not an  easy task  in a                                                               
volatile  market.    In response  to  Representative  LeDoux,  he                                                               
explained that  not all of  the association's projects  allow for                                                               
cost  recovery  activities.   When  enhancing  wild stocks,  cost                                                               
recovery  is difficult  as the  stocks  can not  be separated  at                                                               
harvest.   However,  certain projects  provide a  more segregated                                                               
return making cost recovery possible.   The CIAA has managed a 60                                                               
percent   recovery   some   years,  but   the   fluctuation   and                                                               
availability of the  harvest has proven inconsistent.   A diverse                                                               
funding portfolio is being developed.                                                                                           
                                                                                                                                
9:33:01 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE EDGMON   asked that, given the  amount of industry                                                               
located  in  the Cook  Inlet  watershed  area,  and the  need  to                                                               
emphasize habitat protection, if  CIAA has discussed, or possibly                                                               
advocated  for,   the  relocation   of  the  Office   of  Habitat                                                               
Management &  Permitting (OHM&P)  from the Department  of Natural                                                               
Resources (DNR) and back to ADF&G.                                                                                              
                                                                                                                                
MR.  FANDREI  answered  that  the association  has  not  taken  a                                                               
position on this issue.                                                                                                         
                                                                                                                                
9:33:45 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON further  inquired whether  having OHM&P  within DNR                                                               
effects the permitting process for CIAA enhancement projects.                                                                   
                                                                                                                                
MR. FANDREI clarified  that, because of the  joint projects, CIAA                                                               
is not  necessarily involved in  permitting issues.   However, he                                                               
expressed a  preference for  working with ADF&G  over DNR  due to                                                               
the user fee system attached  to each permit request submitted to                                                               
DNR.    To  a  follow-up question,  he  responded  that  specific                                                               
services  which  FRED  provided  to  CIAA  included  limnological                                                               
studies  and sample  analysis.   He explained  that the  imminent                                                               
closure of  the states  limnology lab, in  Soldotna, will  pose a                                                               
serious problem.   For  the benefit of  the committee  he defined                                                               
limnology as  the study of  lakes including: nutrient  levels for                                                               
the   food   chain,    physical   measurements   of   temperature                                                               
fluctuation, and food sources needed for aquatic life support.                                                                  
                                                                                                                                
9:36:31 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE WILSON  referred to the natural  rearing situation                                                               
described  in  the  Northern  Southeast  Aquaculture  Association                                                               
(NSRAA)  presentation, and  asked whether  CIAA is  able to  take                                                               
advantage of similar conditions.                                                                                                
                                                                                                                                
MR.  FANDREI  explained  that because  CIAA  does  a  significant                                                               
amount  of natural  rearing in  lakes, such  as Hidden  Lake, the                                                               
association's ability to  do cost recovery is  effected.  Natural                                                               
rearing in Tustumena  Lake has been suspended, after  30 years of                                                               
operation,   due  to   the  enactment   of  federal   regulations                                                               
prohibiting this  activity, despite  the resource  benefits which                                                               
this project provided to the central Cook Inlet fisheries.                                                                      
                                                                                                                                
9:37:59 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON asked  for an  overview of  the problems  currently                                                               
effecting CIAA projects, such as the Paint River.                                                                               
                                                                                                                                
MR.  FANDREI described  that the  Paint River  project is  a fish                                                               
ladder  to accommodate  salmon making  their way  over a  35 foot                                                               
falls   into   a   lake   that   will   support   their   natural                                                               
spawning/rearing cycle.   Although CIAA managed  the $2.9 million                                                               
construction cost it has been  unable to fund the operation other                                                               
than on  an ad hoc basis.   He clarified that  permitting has not                                                               
been the issue,  but the $900,000 needed to operate  has not been                                                               
available  to start  this system.    A federal  request has  been                                                               
submitted  for  this purpose.    He  assured the  committee  that                                                               
having  this  type   of  facility  in  that  area   will  make  a                                                               
significant impact  by providing a  fishery in an  area currently                                                               
experiencing low  fish levels, as  well as providing  a potential                                                               
cost  recovery  fishery  for  CIAA.    He  will  provide  further                                                               
information on this project to the committee.                                                                                   
                                                                                                                                
9:41:16 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  referred to the  halted Tustumena and  Kasilof Lake                                                               
projects and  asked what percentage  of the fishery  was supplied                                                               
by these projects.                                                                                                              
                                                                                                                                
MR. FANDREI  stated that the  stocking ended in 2004,  at Kasilof                                                               
Lake.  The  returns for the last couple of  years have been 30-40                                                               
percent enhanced, prior  to the that it was 10  percent.  Returns                                                               
to Tustumena Lake  have been strong and,  he speculated, probably                                                               
made up a significant percent  of the central Cook Inlet harvest,                                                               
possibly as much as one third.                                                                                                  
                                                                                                                                
9:42:22 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON requested further clarity  on the federal regulation                                                               
prohibiting the use of Tustumena Lake.                                                                                          
                                                                                                                                
MR.  FANDREI  answered  that  the  lake is  in  a  refuge  and  a                                                               
designated  federal  wilderness  area.     The  waters  are  also                                                               
designated wilderness,  however boats, planes, and  snow machines                                                               
are  allowed.   Environmental  groups  objected  to the  hatchery                                                               
operations,  the objection  was  upheld by  the  courts, and  the                                                               
permit held by  CIAA was suspended.  Following-up,  he said, that                                                               
an  exception  to  the wilderness  designation  would  allow  the                                                               
operation to  go forward.   Clarifying his earlier  statement, he                                                               
noted  that  Tustumena  Lake returns  provide  approximately  one                                                               
third of  the central Cook Inlet  salmon catch, and one  third of                                                               
the catch are enhanced stocks.                                                                                                  
                                                                                                                                
9:44:15 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX  asked if all of  the regional associations                                                               
are allowed  to perform cost  recovery activities on  mixed stock                                                               
returns, or does a unique by-law provide CIAA the opportunity.                                                                  
                                                                                                                                
MR.  FANDREI responded  that generally  the returns  to the  Cook                                                               
Inlet area  are 10 percent  enhanced.  When the  enhanced percent                                                               
of  the  return  is  that  low  a  cost  recovery  harvest  takes                                                               
advantage of wild stocks.  This  is what often creates a conflict                                                               
issue that results in CIAA having cost recovery permits denied.                                                                 
                                                                                                                                
^OVERVIEW:  PRINCE WILLIAM SOUND AQUACULTURE CORPORATION (PWSAC)                                                              
                                                                                                                                
9:45:54 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON announced  that the next order of  business would be                                                               
a  teleconference  presentation  by   the  Prince  William  Sound                                                               
Aquaculture Association (PWSAC).                                                                                                
                                                                                                                                
9:46:26 AM                                                                                                                    
                                                                                                                                
DAVID   REGGIANI,   General   Manager,   Prince   William   Sound                                                               
Aquaculture Corporation  (PWSAC), outlined the history  and scope                                                               
of PWSAC.   Founded  in 1974,  the first  facility built  was the                                                               
Armin  F.  Koernig  hatchery,  Southwest  Prince  William  Sound,                                                               
followed  by  the Wally  M.  Norenberg  hatchery, Esther  Island.                                                               
Additionally, PWSAC  contracted with  the state to  operate three                                                               
hatcheries in the area, those  being Main Bay, Cannery Creek, and                                                               
the Gulkana facility at Paxson.   The Solomon Gulch Hatchery is a                                                               
private  non-profit (PNP)  facility.   Continuing, he  said, that                                                               
together these five hatcheries  release approximately 578 million                                                               
fry and  smolt annually.  Of  these, 400 million are  pink salmon                                                               
fry, 148 million are chum salmon  fry, 32 million are sockeye fry                                                               
and smolts,  and 1 million  are coho  smolts.  He  reported that,                                                               
from 1990 to 2004, the  economic impact to the commercial harvest                                                               
has been  $189 million.   During this time, the  commercial fleet                                                               
has  paid  an  approximate  total  of $10  million  to  PWSAC  in                                                               
enhancement  taxes.   He stated  that the  value of  PWSAC salmon                                                               
contributions to  the seafood processing  industry, to  date, has                                                               
been  $736  million,  with  an annual  average  of  $49  million.                                                               
Additionally, the  sport fishing,  subsistence,  and personal use                                                               
fisheries each benefit from the  coho salmon enhancement program.                                                               
Approximately 100,000  coho smolts are released  into Cordova and                                                               
Whittier, with an  additional 50,000 released into  Chenega.  Two                                                               
sport fisheries have  also been developing in recent  years:  one                                                               
at the Main Bay hatchery with  the sockeye salmon return; and one                                                               
at the  Wally M. Norenberg  hatchery, focused on the  chum salmon                                                               
return.                                                                                                                         
                                                                                                                                
9:50:47 AM                                                                                                                    
                                                                                                                                
MR. REGGIANI  underscored the economic impacts  that PWSAC salmon                                                               
returns contributed  to the 2006  harvest.  He reported  that 5.1                                                               
million PWSAC  pink salmon contributed  to the  commercial catch.                                                               
This  represents 43  percent of  all  pink salmon  taken in  that                                                               
fishery.   When combined  with the  local PNP  contributions, the                                                               
total enhanced  catch jumps to 10  million, or 83 percent  of the                                                               
contribution.    The  chum  contribution   was  1.2  million,  88                                                               
percent; the  sockeye contribution  was 832 thousand,  38 percent                                                               
when  including   the  Gulkana   returns,  or  74   percent  when                                                               
considering  only the  returns of  hatcheries  in Prince  William                                                               
Sound; and enhancement  fish represent nearly 100  percent of the                                                               
coho salmon catch.  Addressing  the operations of the facilities,                                                               
he stated that,  similar to the other regions,  PWSAC is evolving                                                               
to  become more  cost  effective, and  has developed  cooperative                                                               
agreements  with Alaska  Department of  Fish &  Game (ADF&G)  for                                                               
project monitoring and evaluation.                                                                                              
                                                                                                                                
9:54:09 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  asked if  there has been  discussion with  PWSAC to                                                               
offset  cost  recovery   funds  by  receiving  a   gross  of  the                                                               
fishermen's return  vs. having a  dedicated cost  recovery system                                                               
conducted by the association.                                                                                                   
                                                                                                                                
MR. REGGIANI  responded that it  may come  up at a  cost recovery                                                               
committee meeting,  but no discussion  has occurred at  the board                                                               
level to date.                                                                                                                  
                                                                                                                                
9:54:54 AM                                                                                                                    
                                                                                                                                
CHAIR SEATON  inquired whether there has  been resolution between                                                               
PWSAC and  ADF&G regarding  the management  of combined  wild and                                                               
enhanced stock.                                                                                                                 
                                                                                                                                
MR. REGGIANI stated  that an action plan is  being developed with                                                               
ADF&G to  outline this concern  and address  the issue.   He will                                                               
forward material to  apprise the committee of  the progress being                                                               
made on this front.                                                                                                             
                                                                                                                                
^OVERVIEW:   SOUTHERN SOUTHEAST REGIONAL  AQUACULTURE ASSOCIATION                                                             
(SSRAA)                                                                                                                       
                                                                                                                                
9:56:42 AM                                                                                                                    
                                                                                                                                
CHAIR  SEATON  announced  final  order of  business  would  be  a                                                               
teleconference  presentation by  the Southern  Southeast Regional                                                               
Aquaculture Association (SSRAA).                                                                                                
                                                                                                                                
9:57:03 AM                                                                                                                    
                                                                                                                                
JOHN  BURKE,  General  Manager,  Southern  Southeast  Aquaculture                                                               
Association (SSRAA) described  the 21 member board  of SSRAA with                                                               
13  being   seats  dedicated  for   fishermen:    4   seiners,  4                                                               
gillnetters,  4  power  trollers,  and 1  hand  troller.    These                                                               
positions  are  held by  members  who  were selected  from  their                                                               
respective  fishing fleets.   The  board then  makes the  policy,                                                               
budget, and  philosophical decisions for  SSRAA, as do  the other                                                               
regional boards for their associations.                                                                                         
                                                                                                                                
9:58:33 AM                                                                                                                    
                                                                                                                                
MR.  BURKE  explained  the  route  which  the  fish  follow  when                                                               
returning  to the  SSRAA enhancement  sites.   The path  circuits                                                               
through several common property  fisheries in Northern Southeast,                                                               
prior to  arriving at the SSRAA  waters.  Because of  this route,                                                               
the SSRAA enhancement projects are  designed to provide catch for                                                               
these  traditional fisheries  vs. terminal  special harvest  area                                                               
fisheries.   Four  hatcheries  are operated  by  SSRAA, with  the                                                               
primary two being  Whitman Lake and Neets Bay,  which provide the                                                               
eggs  and fry  for the  other  facilities.   The primary  release                                                               
sites are:   Nakat Inlet,  16 million chum salmon;  Kendrick Bay,                                                               
20 million  chum salmon; and  Anita Bay, 22 million  chum salmon.                                                               
Additionally, 2  million coho salmon  are released at  Neck Lake.                                                               
He  pointed out  that these  areas all  represent remote  release                                                               
sites.    All  of  the   brood  stock  and  cost  recovery  catch                                                               
activities  are performed  at Neets  Bay, and  the cost  recovery                                                               
catch is  processed by  the hatchery.   This  is to  minimize the                                                               
pressure on the Ketchikan market.                                                                                               
                                                                                                                                
10:01:08 AM                                                                                                                   
                                                                                                                                
MR.  BURKE  referred to  the  debt  repayment accomplishments  of                                                               
SSRAA  and  explained  that  the original  loan  of  $22  million                                                               
principal has been  retired, but the association  is still paying                                                               
down the accrued interest of approximately $8.5 million.                                                                        
                                                                                                                                
10:01:35 AM                                                                                                                   
                                                                                                                                
MR. BURKE  continued, describing the chinook  project operated in                                                               
conjunction with  the Division of  Sport Fish,  Alaska Department                                                               
of Fish  & Game (ADF&G).   The Crystal Lake hatchery  is owned by                                                               
ADF&G, which provides  funds for SSRAA to  operate that facility.                                                               
The final  hatchery is at  Burnett Inlet, a "summer"  coho salmon                                                               
facility.  He  described this fish as "a little  coho that thinks                                                               
it's a sockeye."  It  represents a valuable early return fishery,                                                               
during June and  July.  The fall coho project  releases 6 million                                                               
fish per year,  providing a fishery for the  trollers, with catch                                                               
rates of 90-95 percent.                                                                                                         
                                                                                                                                
10:02:32 AM                                                                                                                   
                                                                                                                                
MR. BURKE  reported that  for cost  recovery purposes  30 percent                                                               
of  the chum  salmon returns  were taken  at Neets  Bay.   Only 5                                                               
percent  of the  coho  can be  expected to  return,  and no  king                                                               
salmon.   Thus,  the primary  cost recovery  is made  through the                                                               
chum harvest, and  the king salmon project costs  are covered via                                                               
contracts with ADF&G.                                                                                                           
                                                                                                                                
10:03:23 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON  asked if  there has been  discussion with  SSRAA to                                                               
offset  cost  recovery   funds  by  receiving  a   gross  of  the                                                               
fishermen's return  vs. having a  dedicated cost  recovery system                                                               
conducted by the association.                                                                                                   
                                                                                                                                
MR.  BURKE  responded  that  the  discussion  has  not  occurred.                                                               
Primarily,  he  stated,  given the  circumstances  of  the  local                                                               
harvest  as   previously  outlined,  such  a   program  would  be                                                               
difficult to implement.                                                                                                         
                                                                                                                                
10:04:28 AM                                                                                                                   
                                                                                                                                
CHAIR SEATON inquired  whether straying wild stocks  have been an                                                               
issue at any of the SSRAA remote release sites.                                                                                 
                                                                                                                                
MR.  BURKE answered  that nothing  of significance  has occurred,                                                               
and  that the  chum returns  do not  represent a  direct conflict                                                               
with the local  runs.  He added that the  sockeye, coho, and king                                                               
salmon do not tend to stray when they return.                                                                                   
                                                                                                                                
10:06:16 AM                                                                                                                   
                                                                                                                                
MR. BURKE suggested  that the committee look  for the forthcoming                                                               
ADF&G report  to provide  further details and  data on  the SSRAA                                                               
enhancement projects.                                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Special  Committee on  Fisheries meeting  was adjourned  at 10:07                                                               
a.m.                                                                                                                            

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