Legislature(2017 - 2018)BUTROVICH 205

04/05/2017 03:30 PM RESOURCES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 28 MUNICIPAL LAND SELECTIONS: PETERSBURG TELECONFERENCED
Heard & Held
-- Public Testimony --
*+ SB 89 SHELLFISH ENHANCE. PROJECTS; HATCHERIES TELECONFERENCED
Heard & Held
-- Public Testimony --
+ Bills Previously Heard/Scheduled: TELECONFERENCED
+= SB 88 AK MENTAL HEALTH TRUST LAND EXCHANGE TELECONFERENCED
Moved CSSB 88(RES) Out of Committee
+= SB 65 JONESVILLE PUBLIC USE AREA TELECONFERENCED
<Bill Hearing Canceled>
                    ALASKA STATE LEGISLATURE                                                                                  
              SENATE RESOURCES STANDING COMMITTEE                                                                             
                         April 5, 2017                                                                                          
                           3:31 p.m.                                                                                            
                                                                                                                                
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Cathy Giessel, Chair                                                                                                    
Senator John Coghill, Vice Chair                                                                                                
Senator Natasha von Imhof                                                                                                       
Senator Bert Stedman                                                                                                            
Senator Shelley Hughes                                                                                                          
Senator Kevin Meyer                                                                                                             
Senator Bill Wielechowski                                                                                                       
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 65                                                                                                              
"An Act establishing the Jonesville Public Use Area."                                                                           
                                                                                                                                
     - BILL HEARING CANCELED                                                                                                    
                                                                                                                                
SENATE BILL NO. 88                                                                                                              
"An Act authorizing  a land exchange with  the federal government                                                               
in which  certain Alaska  mental health  trust land  is exchanged                                                               
for certain  national forest  land and relating  to the  costs of                                                               
the exchange; and providing for an effective date."                                                                             
                                                                                                                                
     - MOVED  CSSB 88(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
SENATE BILL NO. 28                                                                                                              
"An Act  relating to the  general grant land entitlement  for the                                                               
Petersburg Borough; and providing for an effective date."                                                                       
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
SENATE BILL NO. 89                                                                                                              
"An Act relating  to management of enhanced  stocks of shellfish;                                                               
authorizing   certain  nonprofit   organizations  to   engage  in                                                               
shellfish enhancement projects; relating  to application fees for                                                               
salmon hatchery permits; and providing for an effective date."                                                                  
                                                                                                                                
     - HEARD & HELD                                                                                                             
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB  88                                                                                                                  
SHORT TITLE: AK MENTAL HEALTH TRUST LAND EXCHANGE                                                                               
SPONSOR(s): SENATOR(s) STEDMAN                                                                                                  
                                                                                                                                
03/10/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/17       (S)       RES, FIN                                                                                               
03/22/17       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
03/22/17       (S)       Heard & Held                                                                                           
03/22/17       (S)       MINUTE(RES)                                                                                            
04/03/17       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/03/17       (S)       Heard & Held                                                                                           
04/03/17       (S)       MINUTE(RES)                                                                                            
04/05/17       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB  28                                                                                                                  
SHORT TITLE: MUNICIPAL LAND SELECTIONS: PETERSBURG                                                                              
SPONSOR(s): SENATOR(s) STEDMAN                                                                                                  
                                                                                                                                
01/20/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
01/20/17       (S)       CRA                                                                                                    
02/02/17       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
02/02/17       (S)       Heard & Held                                                                                           
02/02/17       (S)       MINUTE(CRA)                                                                                            
02/07/17       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
02/07/17       (S)       Moved  SB 28 Out of Committee                                                                          
02/07/17       (S)       MINUTE(CRA)                                                                                            
02/08/17       (S)       CRA RPT 3DP 1NR                                                                                        
02/08/17       (S)       DP: BISHOP, GARDNER, STEDMAN                                                                           
02/08/17       (S)       NR: MACKINNON                                                                                          
03/20/17       (S)       RES REFERRAL ADDED AFTER CRA                                                                           
04/05/17       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
BILL: SB  89                                                                                                                  
SHORT TITLE: SHELLFISH ENHANCE. PROJECTS; HATCHERIES                                                                            
SPONSOR(s): SENATOR(s) STEVENS                                                                                                  
                                                                                                                                
03/10/17       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/10/17       (S)       RES, FIN                                                                                               
04/05/17       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
AKIS GIALOPSOS, staff to Senator Giessel                                                                                        
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SB 88, version R.                                                                               
                                                                                                                                
MELISSA KOOKESH, staff to Senator Stedman                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Provided information related to SB 28.                                                                    
                                                                                                                                
LIZ CABRERA, Director                                                                                                           
Community and Economic Development                                                                                              
Petersburg Borough                                                                                                              
Petersburg, Alaska                                                                                                              
POSITION STATEMENT: Supported SB 28.                                                                                          
                                                                                                                                
MARTY PARSONS, Deputy Director                                                                                                  
Division of Mining, Land and Water                                                                                              
Department of Natural Resources (DNR)                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions on SB 28.                                                                              
                                                                                                                                
TIM LAMKIN, Staff to Senator Stevens                                                                                            
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented SB 89 for the sponsor.                                                                          
                                                                                                                                
FORREST BOWERS, Deputy Director                                                                                                 
Division of Commercial Fisheries                                                                                                
Alaska Department of Fish and Game (ADF&G)                                                                                      
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions on SB 89.                                                                              
                                                                                                                                
SETH BEASANG, Assistant Attorney General                                                                                        
Natural Resources Section                                                                                                       
Department of Law                                                                                                               
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions on SB 89.                                                                              
                                                                                                                                
TOMI MARSH, President                                                                                                           
Oceans Alaska                                                                                                                   
Ketchikan, Alaska                                                                                                               
POSITION STATEMENT: Supported SB 89.                                                                                          
                                                                                                                                
NANCY HILLSTRAND                                                                                                                
Pioneer Alaskan Fisheries, Inc.                                                                                                 
Homer, Alaska                                                                                                                   
POSITION STATEMENT: Expressed concern with SB 89.                                                                             
                                                                                                                                
JEFF HETRICK, Director                                                                                                          
Alutiiq Pride Shellfish Hatchery                                                                                                
Seward, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 89.                                                                                          
                                                                                                                                
JULIE DECKER, Executive Director                                                                                                
Alaska Fisheries Development Foundation (AFDF)                                                                                  
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 89.                                                                                          
                                                                                                                                
GINNY ECKERT, Fisheries Professor                                                                                               
University of Alaska Fairbanks (UAF)                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 89.                                                                                          
                                                                                                                                
MICHELLE RIDGWAY, representing herself                                                                                          
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Supported SB 89.                                                                                          
                                                                                                                                
                                                                                                                              
ACTION NARRATIVE                                                                                                              
                                                                                                                                
3:31:19 PM                                                                                                                    
CHAIR  CATHY   GIESSEL  called  the  Senate   Resources  Standing                                                             
Committee meeting  to order at 3:31  p.m. Present at the  call to                                                               
order  were  Senators   Stedman,  Coghill,  Wielechowski,  Meyer,                                                               
Hughes, and Chair Giessel.                                                                                                      
                                                                                                                                
CHAIR GIESSEL advised that SB 65 was removed from the agenda.                                                                   
                                                                                                                                
          SB  88-AK MENTAL HEALTH TRUST LAND EXCHANGE                                                                       
                                                                                                                                
3:32:10 PM                                                                                                                    
CHAIR  GIESSEL announced  consideration of  SB 88.  It was  first                                                               
heard on  March 22 when  public testimony was opened  and closed.                                                               
At the  second hearing, April  3, the Alaska Mental  Health Trust                                                               
Authority (AMHT)  indicated some technical changes  were required                                                               
to comply with federal legislation  related to this proposed land                                                               
exchange.                                                                                                                       
                                                                                                                                
SENATOR  COGHILL  moved  to  adopt   CSSB  88(RES),  version  30-                                                               
LS0417\R.                                                                                                                       
                                                                                                                                
CHAIR GIESSEL objected for discussion purposes.                                                                                 
                                                                                                                                
AKIS   GIALOPSOS,  staff   to  Senator   Giessel,  Alaska   State                                                               
Legislature, Juneau,  Alaska, explained the changes  in version R                                                               
of  SB 88.  He  said Section  3  has some  minor  changes to  the                                                               
acreage  of   particular  parcels  and  acreage   totals  due  to                                                               
Congressional action. On page 3,  line 15, the total AMHT acreage                                                               
changed to  18,258. On page 4,  line 25, in paragraph  20, parcel                                                               
acreage  is changed  to  3,374. On  page 4,  line  28, the  total                                                               
United  States Forest  Service (USFS)  acreage changed  to 20,580                                                               
acres.  On page  5, line  6, in  paragraph 4,  parcel acreage  is                                                               
changed to 1,067 acres. On page  5, line 23, language updates the                                                               
date of maps to reflect Congressional action.                                                                                   
                                                                                                                                
The final  changes are found  in Section 4, where  the past-tense                                                               
reading of  the language was  removed to  make it clear  that the                                                               
appraisal of the phase 1 transfer  will occur before phase 2 land                                                               
is conveyed. On  page 6, lines 3  & 4, "to be"  is inserted after                                                               
Land and "to be conveyed" replaces "described".                                                                                 
                                                                                                                                
CHAIR GIESSEL,  finding no questions, removed  her objection, and                                                               
announced that version R was adopted.                                                                                           
                                                                                                                                
SENATOR  COGHILL  moved to  report  CSSB  88 (RES),  version  30-                                                               
LS0417\R,  from  committee  with individual  recommendations  and                                                               
attached  fiscal note.  There were  no objections  and it  was so                                                               
ordered.                                                                                                                        
                                                                                                                                
3:35:29 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
          SB  28-MUNICIPAL LAND SELECTIONS: PETERSBURG                                                                      
                                                                                                                                
3:37:07 PM                                                                                                                    
CHAIR  GIESSEL announced  consideration  of SB  28.  She said  it                                                               
authorizes a land conveyance to  the Petersburg Borough of 14,666                                                               
acres from unallotted state land.                                                                                               
                                                                                                                                
SENATOR   BERT  STEDMAN,   sponsor   of  SB   28,  Alaska   State                                                               
Legislature,  Juneau,  Alaska,  stated  that  this  is  a  simple                                                               
borough expansion  bill to align  the Borough of  Petersburg with                                                               
land  expansions in  other  boroughs as  required  by the  Alaska                                                               
Constitution.                                                                                                                   
                                                                                                                                
MELISSA  KOOKESH,   staff  to   Senator  Stedman,   Alaska  State                                                               
Legislature,  Juneau,  Alaska,  said  this bill  would  give  the                                                               
Petersburg  Borough  a  chance to  grow,  generate  revenue,  and                                                               
increase economic  development from  nearby lands. Over  the last                                                               
several  months,  Senator  Stedman's office  and  representatives                                                               
from  the Petersburg  Borough  have reviewed  the  bill with  the                                                               
Department  of Natural  Resources (DNR)  and discussed  where the                                                               
borough selections  would occur,  and they  have no  objection to                                                               
the bill.                                                                                                                       
                                                                                                                                
CHAIR GIESSEL asked for a sectional analysis.                                                                                   
                                                                                                                                
3:39:14 PM                                                                                                                    
MS.   KOOKESH   said   section  1   adds   subparagraph   16   to                                                               
AS.29.65010(a), setting  a general land grand  entitlement to the                                                               
Petersburg  Borough  of 14,666  acres,  an  increase from  12,770                                                               
acres above what the borough would otherwise receive.                                                                           
                                                                                                                                
Section 2 is a conforming amendment  to allow the borough time to                                                               
make its additional selections.                                                                                                 
                                                                                                                                
Section  3 is  also  a  conforming amendment  to  allow the  land                                                               
selection  process at  DNR to  apply to  the new  Petersburg land                                                               
selections.                                                                                                                     
                                                                                                                                
Section 4 is an immediate effective date.                                                                                       
                                                                                                                                
3:40:10 PM                                                                                                                    
LIZ  CABRERA,  Director,   Community  and  Economic  Development,                                                               
Petersburg,  Alaska,  supported  SB  28. She  said  it  sets  the                                                               
general  land  entitlement  of  Alaska's  newest  borough  to  be                                                               
comparable  to  the  land  entitlement   received  by  all  other                                                               
boroughs  in the  state,  an amount  equal  to approximately  .70                                                               
percent of  a borough's land  mass, which, in  Petersburg's case,                                                               
is 14,666 acres.                                                                                                                
                                                                                                                                
She explained that  the Petersburg Borough is  located in central                                                               
Southeast Alaska  and encompasses an  area of 3,800  square miles                                                               
of land  and sea. The  borough's population center is  located on                                                               
the northern  tip of Mitkof  Island, which  is home to  a diverse                                                               
and  prolific commercial  fishing fleet  and three  major seafood                                                               
processing facilities.                                                                                                          
                                                                                                                                
In 2013, the residents of Petersburg  voted to form a borough for                                                               
a  number of  reasons, which  included  having a  greater say  on                                                               
land-use  decisions  in  the  surrounding   area  and  having  an                                                               
opportunity to increase their municipal  land base, and many also                                                               
felt  it was  very important  for all  area residents  to support                                                               
their school system through local taxes.                                                                                        
                                                                                                                                
3:41:40 PM                                                                                                                    
SENATOR VON IMHOF joined the committee.                                                                                         
                                                                                                                                
MS.  CABRERA  continued  that  about   12  months  after  borough                                                               
formation, Petersburg  received a general land  grant entitlement                                                               
certification from the state indicating  it was entitled to 1,896                                                               
acres under  AS 29.65.010.  However, this  amount was  reduced by                                                               
457 acres  that was already  received by the City  of Petersburg,                                                               
even though certain tracts of  the city's 457 acres is restricted                                                               
from development  and only available  for public,  charitable, or                                                               
recreational uses.  After deducting the 457  acres, the borough's                                                               
land  entitlement  was set  at  1,438  acres. Putting  this  into                                                               
context, this  is approximately one-third  the size  of Anchorage                                                               
International Airport.                                                                                                          
                                                                                                                                
She  explained  how the  DNR  used  a  statutory formula  in  the                                                               
calculation. A municipality  is entitled to 10  percent of vacant                                                               
unappropriated and  unreserved (VUU) land within  its boundaries.                                                               
The lands  available for selection  are designated as VUU  by the                                                               
State of Alaska.  These lands were unclassified  or classified as                                                               
agricultural, grazing, materials,  public recreation, settlement,                                                               
and resource management.  But, for the most  part, no development                                                               
has occurred on any of the state's VUU land.                                                                                    
                                                                                                                                
Why so small?  She said the majority of land  within the borough,                                                               
over  96 percent,  is managed  by the  federal government  as the                                                               
Tongass  National Forest.  Of the  non-federal  lands within  the                                                               
borough, 1.73 percent is owned  by the Goldbelt Corporation, 1.34                                                               
percent by  the State  of Alaska,  and .4  percent by  the Alaska                                                               
Mental Health Trust and University  of Alaska. Only .3 percent is                                                               
in private  ownership, and  a mere  .04 percent  is owned  by the                                                               
municipality. When  DNR applied  the land entitlement  formula to                                                               
the  Petersburg  Borough,  only  a  very  small  amount  of  land                                                               
remained in VUU status.                                                                                                         
                                                                                                                                
They  realized their  entitlement  was inadequate  for what  they                                                               
were hoping to  accomplish and that other  boroughs also received                                                               
small  land entitlements,  initially, but  were able  to increase                                                               
these through  legislation. The most  recent example was  in 2010                                                               
when  both Wrangell  and Haines  received additional  acreage. In                                                               
the late  1990s, the Lake  and Peninsula Borough and  the Yakutat                                                               
Borough had their land entitlements set through legislation.                                                                    
                                                                                                                                
MS. CABRERA  said this is  important to Petersburg,  because just                                                               
over 96  percent of its  land base  is federally managed,  and of                                                               
its non-federal  lands, the major  land holders are  the Goldbelt                                                               
Corporation and the State of  Alaska. In short, while the borough                                                               
itself is large,  the majority of its land is  not and will never                                                               
be included  in their local tax  base, and most is  not available                                                               
to generate economic returns for residents or the state.                                                                        
                                                                                                                                
3:45:16 PM                                                                                                                    
The Petersburg  Borough would like  the opportunity to  move some                                                               
of these  lands into private  ownership and  add them to  its tax                                                               
base  as residential  or commercial  developments. They  want the                                                               
opportunity to  secure resource  development through  new sources                                                               
of rock  for construction, road maintenance,  and other projects.                                                               
In  general,  they   would  like  the  opportunity   to  be  more                                                               
economically  self-sufficient, and  1,400 acres  simply does  not                                                               
provide enough developable land to support these goals.                                                                         
                                                                                                                                
MS.  CABRERA  explained that  the  DNR  has  stated it  does  not                                                               
generally  voice  support  for  this  type  of  legislation,  but                                                               
neither  does  it oppose  the  request.  The borough  provided  a                                                               
general outline of  the lands they would select under  SB 28, and                                                               
DNR  did   not  express  any   concerns  about   these  potential                                                               
selections.                                                                                                                     
                                                                                                                                
Lastly,  Ms. Cabrera  said  the committee  knows  that these  are                                                               
difficult times and in its own  small way, Petersburg wants to be                                                               
part  of the  solution,  not a  casualty of  the  crisis, and  an                                                               
increased  land  base  is  a   key  component  to  the  long-term                                                               
sustainability of the municipality.                                                                                             
                                                                                                                                
3:46:28 PM                                                                                                                    
SENATOR  STEDMAN  asked  her  to  explain  her  position  in  the                                                               
borough.                                                                                                                        
                                                                                                                                
MS.  CABRERA  said  that  she   is  the  Community  and  Economic                                                               
Development Director  and works directly with  the local planning                                                               
commission; she  has also been  the staff  for their ad  hoc land                                                               
selection  committee, a  group of  residents that  have developed                                                               
criteria and  done some land  selections already. She  also works                                                               
with the local Economic Development Council.                                                                                    
                                                                                                                                
SENATOR MEYER  said he  wasn't as concerned  about the  number of                                                               
acres  as to  their value,  and asked  how this  compares from  a                                                               
dollar standpoint  to other  boroughs that  have been  formed and                                                               
been given land.                                                                                                                
                                                                                                                                
MS.  CABRERA  answered  that historically  fiscal  notes  weren't                                                               
attached to  any of the  land conveyances,  so they don't  have a                                                               
number. But  if you  were to  apply DNR's  number, the  value for                                                               
Fairbanks'  land   grant  would  have  been   $602  million,  and                                                               
Anchorage's  would have  been $241  million. So,  Petersburg's is                                                               
relatively small  both in acreage  and in dollar  amount compared                                                               
to the other municipalities.                                                                                                    
                                                                                                                                
SENATOR MEYER  said it  would be  better to  compare it  to other                                                               
boroughs in Southeast where there isn't as private much land.                                                                   
                                                                                                                                
MR.  CABRERA   answered  that  Wrangell's  land   was  valued  at                                                               
$51,600,000, using the DNR number.                                                                                              
                                                                                                                                
3:49:15 PM                                                                                                                    
MARTY  PARSONS, Deputy  Director,  Division of  Mining, Land  and                                                               
Water, Department of Natural  Resources (DNR), Anchorage, Alaska,                                                               
answered  that  question  explaining  that  they  were  asked  by                                                               
another committee  to provide a  number for the  additional lands                                                               
based  on  potential  land sales,  material  development,  timber                                                               
values, and those  types of things and they had  not done that in                                                               
the past for other Southeast communities.                                                                                       
                                                                                                                                
SENATOR MEYER said that sort of answered his question.                                                                          
                                                                                                                                
MR. CABRERA clarified  that she was using the number  DNR came up                                                               
with. It's not like that  number was attached to the legislation,                                                               
so it's not necessarily apples and apples.                                                                                      
                                                                                                                                
SENATOR HUGHES  noted there is no  fiscal note, and asked  if she                                                               
has  until  October 2018  for  land  selections  and if  that  is                                                               
adequate.  She  also  noticed  the  commissioner  didn't  have  a                                                               
timeframe  for   approval  and  asked   if  that  is   normal  or                                                               
problematic.                                                                                                                    
                                                                                                                                
MS. CABRERA replied that it can  be accomplished by the date, but                                                               
it would be nice  if DNR had a timetable. They  have been told it                                                               
it's a matter of years before the conveyance would be completed.                                                                
                                                                                                                                
SENATOR  HUGHES asked  if  she  is aware  that  any  of the  past                                                               
legislation had included a timeline for the commissioner.                                                                       
                                                                                                                                
MS. CABRERA answered none that she has seen.                                                                                    
                                                                                                                                
SENATOR HUGHES asked that question of DNR.                                                                                      
                                                                                                                                
MR.  PARSONS commented  that normally  those  timeframes are  not                                                               
included in  this kind of  legislation. They work  with statutory                                                               
requirements that have to do  with when the actual selections are                                                               
received  from   the  borough;  some   of  which   are  rejected.                                                               
Completing a conveyance is an interactive process he said.                                                                      
                                                                                                                                
SENATOR  HUGHES  asked if  he  knew  of  any  cases that  have  a                                                               
timeframe in statute.                                                                                                           
                                                                                                                                
MR. PARSONS  said he  had not seen  legislation with  a timeframe                                                               
attached to completion of a conveyance.                                                                                         
                                                                                                                                
SENATOR  WIELECHOWSKI asked  Mr. Parsons  to describe  the 14,000                                                               
acres.                                                                                                                          
                                                                                                                                
MR.  PARSONS answered  the lands  are varied;  some are  close to                                                               
Petersburg,  some  are  outlying  as  in  Thomas  Bay,  some  are                                                               
settlement lands  and some  lands the state  could have  used for                                                               
material  sites  for road  construction.  Some  of the  land  has                                                               
timber value  and some is  muskeg, but some areas  are relatively                                                               
high-value residential subdivisions.                                                                                            
                                                                                                                                
3:53:49 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if he  could figure out the  value of                                                               
the  lands  that were  provided  for  Wrangell and  Anchorage  in                                                               
relation to the proposed 14,000 acres in this bill.                                                                             
                                                                                                                                
MR. PARSONS replied they looked  at lands that were available for                                                               
settlement:  both high-value  lands and  not-so-high value.  They                                                               
looked at estimated  timber resources and a base  value per acre.                                                               
They  also looked  at  certain  material sites  that  they had  a                                                               
revenue history  on, and that's  where the number  of $68,638,000                                                               
came from.                                                                                                                      
                                                                                                                                
SENATOR  WIELECHOWSKI responded  that  they just  got the  fiscal                                                               
note, and asked if he had estimated $5,375/acre.                                                                                
                                                                                                                                
MR. PARSONS answered yes.                                                                                                       
                                                                                                                                
SENATOR  WIELECHOWSKI asked  how  this acreage  compares to  what                                                               
would be  given to a  borough and if  he department had  done any                                                               
sort of comparison like that.                                                                                                   
                                                                                                                                
MR. PARSONS answered  the department did not do  a calculation on                                                               
Wrangell, but rather negotiated quite  heavily with them to reach                                                               
a  solution.  For the  acre  number,  he normally  calculates  10                                                               
percent of  the VUU land, which  according to statute is  what is                                                               
made available for the municipal  entitlement. In this particular                                                               
case, the 14,666  acres calculate out to about 95  percent of the                                                               
borough's VUU land.                                                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI  asked if  the standard for  VUU land  is 10                                                               
percent and if  he is saying that all the  other communities have                                                               
10 percent  of it. Statutory  exceptions were made for  Haines at                                                               
21.3 percent and Wrangell at 44.2  percent, and he wanted to know                                                               
what percent the Petersburg entitlement is.                                                                                     
                                                                                                                                
MR. PARSONS  replied the Petersburg entitlement  is approximately                                                               
95 percent of the VUU land within the borough boundaries.                                                                       
                                                                                                                                
SENATOR WIELECHOWSKI  asked if he has  a position on that  and if                                                               
it is a reasonable amount.                                                                                                      
                                                                                                                                
MR. PARSONS  answered that DNR  normally doesn't take  a position                                                               
on this  issue, but leaves it  up to the committee  to determine.                                                               
So much of the land in  Southeast is the Tongass National Forest.                                                               
The same is true for Wrangell.                                                                                                  
                                                                                                                                
SENATOR  STEDMAN  added that  Sitka  Borough  is the  same.  It's                                                               
virtually  all Tongass  National Forest  and very  little private                                                               
land.                                                                                                                           
                                                                                                                                
3:58:34 PM                                                                                                                    
CHAIR GIESSEL  asked about  the borough's  economic base  and how                                                               
this land will be of value to Petersburg residents.                                                                             
                                                                                                                                
MS.  CABRERA   replied  that   commercial  fishing   and  seafood                                                               
processing  is the  primary economic  force  in Petersburg.  With                                                               
this land  they could  diversify: some  remote property  could be                                                               
suitable for development for tourism,  and some property could be                                                               
available for resource development,  specifically sand and gravel                                                               
sites. She explained that generally  muskeg needs to be filled in                                                               
before one  can build on it,  and their supply of  good gravel is                                                               
running  out.   Some  parcels are  suitable  for settlement  into                                                               
private hands and onto the tax base.                                                                                            
                                                                                                                                
SENATOR STEDMAN remarked that families  used to live in Cleveland                                                               
Passage and  Whitney Island 100  years go and  it used to  have a                                                               
post office. Now  it's grown over. So, some of  the land has been                                                               
used before,  which could provide planning  opportunities. He was                                                               
not too  sure about the  timber value,  because it is  all broken                                                               
up.                                                                                                                             
                                                                                                                                
4:03:18 PM                                                                                                                    
SENATOR MEYER  asked if  she intends to  subdivide this  land for                                                               
homes and businesses,  which he thinks this is a  great idea, but                                                               
he didn't want to give away all  this acreage to be made into one                                                               
large park.                                                                                                                     
                                                                                                                                
MS. CABRERA responded that they live  in the middle of a big park                                                               
already.                                                                                                                        
                                                                                                                                
CHAIR GIESSEL  opened public testimony. Finding  none, she closed                                                               
it.                                                                                                                             
                                                                                                                                
SENATOR  STEDMAN closed  saying  he  appreciated the  committee's                                                               
time in hearing this bill.                                                                                                      
                                                                                                                                
[SB 28 was held in committee.]                                                                                                  
                                                                                                                                
         SB  89-SHELLFISH ENHANCE. PROJECTS; HATCHERIES                                                                     
                                                                                                                                
4:06:21 PM                                                                                                                    
CHAIR GIESSEL  announced consideration  of SB  89. She  said that                                                               
last  year the  governor introduced  SB 172  that dealt  with the                                                               
enhancement of  fish, shellfish,  and hatcheries.  This committee                                                               
worked  on the  bill quite  a bit,  but the  legislation did  not                                                               
pass.  So,  this  year  they  have  SB  89,  which  is  virtually                                                               
identical to last year's bill.                                                                                                  
                                                                                                                                
4:06:55 PM                                                                                                                    
TIM LAMKIN,  Staff to Senator Stevens,  Alaska State Legislature,                                                               
Juneau, Alaska,  presented SB 89 for  the sponsor. He said  SB 89                                                               
is  an effort  to  diversify  the economy  with  the seafood  and                                                               
mariculture  industry. It  provides for  qualified nonprofits  to                                                               
pursue enhancement and restoration  projects for shellfish, which                                                               
includes, for  example, crab, clams, oysters,  and sea cucumbers.                                                               
To  date, a  handful of  small hatcheries  have demonstrated  the                                                               
need for  scaling up these fisheries,  and SB 89 is  an effort to                                                               
set such a policy and framework into place and to effectuate it.                                                                
                                                                                                                                
4:08:50 PM                                                                                                                    
MR. LAMKIN provided a sectional analysis of SB 89, version A.                                                                   
                                                                                                                                
     Section  1  provides  the  Alaska  Board  of  Fisheries                                                                    
     authority   to   direct   the  department   to   manage                                                                    
     production of  enhanced shellfish stocks,  beyond brood                                                                    
     stock needs for cost recovery harvest.                                                                                     
                                                                                                                                
     Section 2 increases the permit application fee for new                                                                     
        private nonprofit salmon hatcheries from $100 to                                                                        
     $1,000.                                                                                                                    
                                                                                                                                
     Section  3 is  the most  substantive part  of the  bill                                                                    
     adding a new  chapter 12 to Title  16, "Shellfish Stock                                                                    
     Enhancement Projects."                                                                                                     
                                                                                                                                
4:09:24 PM                                                                                                                    
     AS 16.12.010 provides direction  to the commissioner of                                                                    
     the Department of Fish and  Game on issuance of permits                                                                    
     for  private  nonprofit shellfish  fishery  enhancement                                                                    
     project  and establishes  a  $1,000 permit  application                                                                    
     fee. This  section directs the commissioner  to consult                                                                    
     with  technical experts  in the  relevant areas  before                                                                    
     permit issuance.                                                                                                           
                                                                                                                                
     AS  16.12.020   provides  for  a  hearing   and  public                                                                    
     notification and  input process prior to  issuance of a                                                                    
     permit.                                                                                                                    
                                                                                                                                
     AS 16.12.030 describes terms  and conditions for permit                                                                    
     holders to conduct their  work, including cost recovery                                                                    
     fisheries,  harvest, sale,  and release  of enhancement                                                                    
     project  produced  shellfish,  and selection  of  brood                                                                    
     stock sources.                                                                                                             
                                                                                                                                
     AS 16.12.040 describes the  revocation process should a                                                                    
     permit holder fail to comply  with terms and conditions                                                                    
     of the permit.                                                                                                             
                                                                                                                                
     AS  16.12.050 specifies  that shellfish  produced under                                                                    
     an approved  enhancement project are a  common property                                                                    
     resource, with  provision for special harvest  areas by                                                                    
     permit holders.  This section  also specifies  that the                                                                    
     Board of Fisheries  shall establish regulations related                                                                    
     to this chapter.                                                                                                           
                                                                                                                                
     AS  16.12.060  directs  the department  to  advise  and                                                                    
     assist  permit holders  in their  planning, operations,                                                                    
     and  construction of  facilities  to  a reasonable  and                                                                    
     appropriate extent.                                                                                                        
                                                                                                                                
     AS 16.12.070  provides department authority  to approve                                                                    
     source  and  number  of  shellfish  taken  for  use  as                                                                    
     broodstock.                                                                                                                
                                                                                                                                
     AS 16.12.080 places restriction  on how monies received                                                                    
     from sale of  shellfish may be used  only for operating                                                                    
     costs associated with their facilities.                                                                                    
                                                                                                                                
     AS  16.12.090 relates  to cost  recovery fisheries  and                                                                    
     provides  a means  by which  a  shellfish hatchery  may                                                                    
     contract to  either harvest and  sell shellfish,  or to                                                                    
     implement   a   self-assessment    from   amongst   its                                                                    
     membership.  for  purposes  of  recovering  operational                                                                    
     costs  associated  with  the  hatchery  or  enhancement                                                                    
     project.                                                                                                                   
                                                                                                                                
     AS 16.12.100 gives the  department authority to inspect                                                                    
     facilities  at  any  time  while  the  facility  is  in                                                                    
     operations.                                                                                                                
                                                                                                                                
     AS  16.12.110 requires  a permit  holder  to submit  an                                                                    
     annual report to the department.                                                                                           
                                                                                                                                
     AS  16.12.199 provides  definitions  for commonly  used                                                                    
     terms in this  chapter including "enhancement project,"                                                                    
     "facility,"    "genetically     modified    shellfish,"                                                                    
     "hatcher," and shellfish."                                                                                                 
                                                                                                                                
4:12:38 PM                                                                                                                    
     Section  4  provides  the  Commercial  Fisheries  Entry                                                                    
     Commission  (CFEC) authority  to issue  special harvest                                                                    
     entry   permits  to   holders   of  private   nonprofit                                                                    
     shellfish rehabilitation or  enhancement project permit                                                                    
     holders.                                                                                                                   
                                                                                                                                
     Section  5  defines  legal  fishing  gear  for  special                                                                    
     harvest area entry permit holders.                                                                                         
                                                                                                                                
     Section 6  provides an  exemption for  shellfish raised                                                                    
     in  a  private  nonprofit shellfish  project  from  the                                                                    
     farmed fish definition.                                                                                                    
                                                                                                                                
     Sections  7-8 establish  a state  corporate income  tax                                                                    
     exemption  for   a  nonprofit  corporation   holding  a                                                                    
     shellfish fishery enhancement permit.                                                                                      
                                                                                                                                
     Section 9  exempts shellfish harvested under  a special                                                                    
     harvest  area  entry  permit from  seafood  development                                                                    
     taxes.                                                                                                                     
                                                                                                                                
     Section  10  establishes  an  effective  date  for  the                                                                    
     salmon  hatchery permit  application  fee described  in                                                                    
     sec. 2.                                                                                                                    
                                                                                                                                
     Section 11 authorizes the Department of Fish and Game                                                                      
     to adopt implementing regulations.                                                                                         
                                                                                                                                
     Section 12 establishes an immediate effective date for                                                                     
     sec. 11 pursuant to AS 01.10.070(c).                                                                                       
                                                                                                                                
      Section 13 establishes an effective date for sec. 8                                                                       
     concomitant with sec. 2, Chapter 55, SLA 2013.                                                                             
                                                                                                                                
SENATOR WIELECHOWSKI remarked that  it looks like "no genetically                                                               
modified shellfish,"  was inserted (from last  year's bill) along                                                               
with a provision saying it had  to be native to state waters. So,                                                               
you couldn't have invasive species.                                                                                             
                                                                                                                                
MR. LAMKIN said that was correct.                                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI  asked why one  would get a  special harvest                                                               
area entry permit  "for salmon," an addition on page  9, lines 7-                                                               
9.                                                                                                                              
                                                                                                                                
MR. LAMKIN asked the department to respond.                                                                                     
                                                                                                                                
4:15:20 PM                                                                                                                    
FORREST   BOWERS,  Deputy   Director,   Division  of   Commercial                                                               
Fisheries,   Alaska  Department   of  Fish   and  Game   (ADF&G),                                                               
Anchorage,  Alaska,  explained that  adding  those  two words  is                                                               
related  to lines  10 and  11 and  clarifies that  lines 8  and 9                                                               
(existing language)  are related  to hatchery permits  for salmon                                                               
enhancement. It's a grammatical construct.                                                                                      
                                                                                                                                
CHAIR GIESSEL  asked if one could  say what is identified  now in                                                               
lines  8 and  9  were assumed  to  be for  salmon,  and now  that                                                               
shellfish are being added, the two are being distinguished.                                                                     
                                                                                                                                
MR. BOWERS answered that was correct.                                                                                           
                                                                                                                                
SENATOR  WIELECHOWSKI asked  under what  circumstances one  would                                                               
get a special harvest area entry permit for salmon.                                                                             
                                                                                                                                
MR. BOWERS answered that special  harvest area permits for salmon                                                               
are issued for cost recovery operations.                                                                                        
                                                                                                                                
4:17:30 PM                                                                                                                    
SENATOR WIELECHOWSKI  asked if  this language  opens the  door to                                                               
farmed fishing.                                                                                                                 
                                                                                                                                
MR. BOWERS replied, "Definitely not."                                                                                           
                                                                                                                                
SENATOR MEYER asked if language on  page 3 that states "notice of                                                               
the  hearing  shall  be  published  in  a  newspaper  of  general                                                               
circulation"  includes  internet  posting   or  Facebook  and  if                                                               
general circulation would include Anchorage.                                                                                    
                                                                                                                                
MR.  LAMKIN answered  these provisions  are  similar to  existing                                                               
enhancement project language. So, he  assumed that would apply to                                                               
shellfish, but he deferred to the department to confirm that.                                                                   
                                                                                                                                
4:18:51 PM                                                                                                                    
MR. BOWERS responded that the  Department of Law (DOL) could give                                                               
a more complete answer to the public notice question.                                                                           
                                                                                                                                
4:19:04 PM                                                                                                                    
SETH  BEASANG, Assistant  Attorney  General,  Department of  Law,                                                               
Anchorage, Alaska,  answered that the prior  speaker was correct.                                                               
This  is modeled  after existing  statutes  providing for  salmon                                                               
hatcheries and the  intent is that the same rules  would apply to                                                               
notices from those hatcheries.                                                                                                  
                                                                                                                                
SENATOR  MEYER said  that  maybe  they need  to  look at  overall                                                               
standards  again,   because  he   didn't  know  if   people  read                                                               
newspapers  much  anymore.  He  also  asked  what  a  "reasonable                                                               
period" is referring to section 16.12.040  on page 4, line 10. He                                                               
also thought "in  the discretion of the commissioner"  on line 11                                                               
should be "at the discretion".                                                                                                  
                                                                                                                                
4:20:35 PM                                                                                                                    
MR. LAMKIN replied  he was pretty certain the  "discretion of the                                                               
commissioner" would be embodied in  regulation and it would be 30                                                               
days to 120 days, depending on the season of the fishery.                                                                       
                                                                                                                                
MR. BOWERS answered if the  department identifies an issue with a                                                               
permit holder's  operations they would  try to work with  them to                                                               
try to correct  the deficiency before getting to  the point where                                                               
a  permit would  be suspended  or revoked.  The preference  is to                                                               
correct the problem.                                                                                                            
                                                                                                                                
SENATOR MEYER noted  a Finance Committee member  was present, and                                                               
referring to  page 5,  line 15,  he asked if  the money  going to                                                               
support fisheries  management would be a  dedicated assessment or                                                               
fee.                                                                                                                            
                                                                                                                                
MR.  LAMKIN replied  that  particular section  is  about when  an                                                               
enhancement   project  organization   is   contracting  to   have                                                               
shellfish harvested, and they have the  rights to the funds to go                                                               
back  into  the  operational  costs of  the  enhancement  project                                                               
itself,  or likewise  for a  self-assessment. He  wasn't sure  it                                                               
would go to the general fund at all.                                                                                            
                                                                                                                                
MR. BOWERS said that Mr. Lamkin  was correct; this relates to the                                                               
sale  of shellfish  that would  be taken  for cost  recovery, and                                                               
those  assessment  monies  are collected  by  the  Department  of                                                               
Revenue  and  are  eventually  transmitted  back  to  the  permit                                                               
holders. They are used to pay  for operating costs related to the                                                               
enhancement project.                                                                                                            
                                                                                                                                
4:24:37 PM                                                                                                                    
SENATOR MEYER noted that a permit  holder is a nonprofit, and the                                                               
income it gets  from selling the shellfish is  exempt from Alaska                                                               
corporate  income  tax  law.  He  asked if  that  is  typical  of                                                               
nonprofits and why.                                                                                                             
                                                                                                                                
MR. BOWERS  replied that  the nonprofits  described in  this bill                                                               
are exempt  from corporate  income tax,  and that's  identical to                                                               
the current salmon enhancement programs.  The intent is that they                                                               
are  producing a  resource that  is used  by the  common property                                                               
fisheries, so it's benefiting all Alaskans.                                                                                     
                                                                                                                                
4:26:14 PM                                                                                                                    
CHAIR   GIESSEL   commented   on   publication   in   newspapers.                                                               
Legislation   expanding  notifications   to  include   electronic                                                               
notification was introduced a few years ago but didn't pass.                                                                    
                                                                                                                                
SENATOR  HUGHES   said  she  was  wondering   about  whether  the                                                               
requirement that the department respond  in writing to any member                                                               
of the  public who  objects, on  page 3, is  normal. What  is the                                                               
purpose, and is it done  with other enhancement projects or other                                                               
permit public hearings  across the board at DNR?  Is this opening                                                               
up something new or is it standard?                                                                                             
                                                                                                                                
MR.  LAMKIN answered  that he  was  quite sure  this is  standard                                                               
based on practices in other enhancement projects.                                                                               
                                                                                                                                
MR. BOWERS confirmed that.                                                                                                      
                                                                                                                                
SENATOR  WIELECHOWSKI  said  his  understanding  is  that  salmon                                                               
enhancement  zones can  be taxed,  and asked  if these  shellfish                                                               
enhancement projects can be taxed.                                                                                              
                                                                                                                                
MR.  BOWERS   answered  that   the  common   property  commercial                                                               
fisheries  in the  enhanced  fishery areas  would  be paying  the                                                               
normal fishery business or seafood landing taxes.                                                                               
                                                                                                                                
SENATOR WIELECHOWSKI said AS 16.20.090  talks about cost recovery                                                               
fisheries and asked if that can  be done for shellfish since they                                                               
move around.                                                                                                                    
                                                                                                                                
MR. BOWERS  replied that is  a good  question, and there  are two                                                               
approaches:  one  works well  with  the  salmon program,  because                                                               
adult  salmon return  to the  area  where they  were released  as                                                               
juveniles. So,  those hatchery-produced  salmon can  be harvested                                                               
at  a known  area.  With  shellfish, most  of  the projects  they                                                               
envision   would   be   intermingled  with   naturally   produced                                                               
shellfish, so  a cost recovery fishery  might not be the  best. A                                                               
cost recovery assessment  might be used, where  an additional fee                                                               
is  paid  by each  fisherman  who  participates in  the  fishery,                                                               
similar to the fishery business tax or landing tax.                                                                             
                                                                                                                                
4:31:47 PM                                                                                                                    
SENATOR WIELECHOWSKI asked if that  section needs to be looked at                                                               
before passing this bill.                                                                                                       
                                                                                                                                
MR. BOWERS answered  that the bill language  provides options for                                                               
both models.                                                                                                                    
                                                                                                                                
CHAIR GIESSEL asked if Senator  Wielechowski wanted the assistant                                                               
attorney general's opinion, and he said yes.                                                                                    
                                                                                                                                
MR. BEASANG said  he agreed with everything Mr.  Bowers said just                                                               
now and that he has no conflicting information.                                                                                 
                                                                                                                                
SENATOR  VON IMHOF  asked what  kind  of entities  (demographics)                                                               
will apply for  a grant and how much grant  money can each entity                                                               
get. Do they  have to provide a business plan  and who vets those                                                               
and  decides how  much money  goes  to it  and how  is the  money                                                               
allocated  to them  over time,  so  they can  get this  shellfish                                                               
regeneration effort under way?                                                                                                  
                                                                                                                                
MR.  LAMKIN answered  that he  is involved  in other  legislation                                                               
that speaks  specifically to grants  to nonprofits, but  it's not                                                               
in this bill.                                                                                                                   
                                                                                                                                
SENATOR VON IMHOF  added that the sponsor statement  says the use                                                               
of  state  funds  through  "capital   grants  and  investment  in                                                               
hatchery  infrastructure". So,  this is  the technical  part, but                                                               
it's part  of a  bigger picture,  which she  wanted to  know more                                                               
about.                                                                                                                          
                                                                                                                                
MR. LAMKIN  answered that this  piece of legislation sets  up the                                                               
mechanics  of the  program, and  a related  piece of  legislation                                                               
covers  the financing.  The current  legislation proposes  to cap                                                               
the grants  at $100,000.  He added  that a  loan program  is also                                                               
under way  that would also have  caps of up to  about $1 million,                                                               
and those monies must be fully accounted by the organizations.                                                                  
                                                                                                                                
4:35:41 PM                                                                                                                    
SENATOR VON  IMHOF said,  as nonprofits,  these entities  are not                                                               
necessarily expected  to make a  profit, and  the bill has  a way                                                               
for cost recovery  through the sale of some of  the shellfish. It                                                               
is an  investment by which  the fisheries will  hopefully recover                                                               
and then profit will be taken at that time.                                                                                     
                                                                                                                                
4:36:21 PM                                                                                                                    
CHAIR GIESSEL opened public testimony.                                                                                          
                                                                                                                                
TOMI  MARSH, President,  Oceans Alaska,  Ketchikan, Alaska,  said                                                               
they are a nonprofit shellfish  hatchery located in Ketchikan and                                                               
they  support  SB  89.  She said  mariculture  is  important  for                                                               
economic  diversification,  businesses,  and the  fisheries.  She                                                               
said it creates  a regulatory framework with which  the ADF&G can                                                               
manage shellfish fishery  enhancement, restoration, and shellfish                                                               
hatcheries.  It  will  allow   existing  stakeholders  to  either                                                               
continue  or  begin  enhancement  and a  restoration  of  certain                                                               
species.   It  will   diversify  economic   development,  sustain                                                               
cultural legacy,  and increase environmental  stewardship through                                                               
enhancement   of    traditional   and    economically   important                                                               
commercially harvested  shellfish species, such as  sea cucumbers                                                               
and geoducks, which  have been impacted by  sea otter predations.                                                               
It will  help with enhancement  of shellfish species  integral to                                                               
the marine ecosystem and habitat restoration.                                                                                   
                                                                                                                                
MS. MARSH  added that enhancement  of shellfish species  is vital                                                               
to climate  change and pollution  mitigation, as many  of species                                                               
are the cleaners of the oceans.                                                                                                 
                                                                                                                                
4:38:20 PM                                                                                                                    
NANCY  HILLSTRAND,   Pioneer  Alaskan  Fisheries,   Inc.,  Homer,                                                               
Alaska, expressed  concern with  SB 89  because of  cost recovery                                                               
issues  and possibly  putting  fish where  they  shouldn't be  or                                                               
moving them around  the state by accident. These  are 40-year old                                                               
statutes, and  a lot  has been learned  since they  were created.                                                               
They  have  no  monitoring  or  oversight.  The  commissioner  is                                                               
mentioned in the statutes 50 or 60 times. It's unrealistic.                                                                     
                                                                                                                                
In 2000, the  common property fishermen in Lower  Cook Inlet took                                                               
in  $8,580 in  pink salmon,  whereas the  Cook Inlet  Aquaculture                                                               
Association  took  in   $1,043,705.  The  non-profit  aquaculture                                                               
associations can  use their  money to get  them out  of financial                                                               
problems. It  becomes self-serving, and  there is no way  to stop                                                               
it. Once the permits are in place you can't get rid of them.                                                                    
                                                                                                                                
MS. HILLSTRAND said hatchery strays  come all the way from Prince                                                               
William Sound,  87 percent in  some streams in lower  Cook Inlet,                                                               
and  no  one  is saying  a  word  about  that,  and there  is  no                                                               
monitoring to  recognize the problem.  Existing statutes  need to                                                               
be looked at closely and  someone needs to understand them fully.                                                               
She provided  the committee  with the 2015  annual report  of the                                                               
Lower Cook Inlet management for fin fish.                                                                                       
                                                                                                                                
4:44:28 PM                                                                                                                    
JEFF  HETRICK,   Director,  Alutiiq  Pride   Shellfish  Hatchery,                                                               
Seward,  Alaska, spoke  in  support  of SB  89.  The hatchery  is                                                               
operated by  Chugach Regional  Resources Commission,  an umbrella                                                               
organization that  focuses on  natural resources  in Southcentral                                                               
Alaska. He  said he  is one  of the  reasons this  legislation is                                                               
being introduced.  He has  been conducting  shellfish restoration                                                               
projects for  almost a decade  under a fisheries  resource permit                                                               
that is manage by ADF&G. Projects  they work with are little neck                                                               
clams, cockles, butter clams, sea  cucumbers, and king crab. This                                                               
legislation will  allow them to  go beyond the  limited fisheries                                                               
resources permit.  They believe  they have proven  the technology                                                               
in the  hatchery and other  experiments that can bring  back some                                                               
of  the  depressed  shellfish   populations.  Many  people  don't                                                               
realize that most  of the hard-shell clam stocks  and crab stocks                                                               
are very depressed.                                                                                                             
                                                                                                                                
He  said  funding  for  the   shellfish  hatchery,  because  cost                                                               
recovery  is  decades  down  the  road,  is  very  important.  He                                                               
explained that  federal agencies and granting  organizations they                                                               
work  with need  to know  that the  state supports  this kind  of                                                               
work. Working  under a fisheries resource  permit is experimental                                                               
and limiting; under  it they don't have the framework  to go to a                                                               
larger size  operation. With State  of Alaska support  they could                                                               
get federal  funds and  funds from  nongovernmental organizations                                                               
and other types of organizations.                                                                                               
                                                                                                                                
JULIE  DECKER, Executive  Director, Alaska  Fisheries Development                                                               
Foundation  (AFDF),   Juneau,  Alaska,   supported  SB   89.  Her                                                               
organization  broadly   represents  the  seafood   industry,  the                                                               
harvesters,   processors,  and   it   supports  industry   sector                                                               
businesses.  A few  years ago,  they started  looking at  ways to                                                               
expedite development  of the mariculture  industry in  the state,                                                               
because it  is a  significant opportunity that  is being  done in                                                               
other  places in  the world,  like New  Zealand, Europe,  and the                                                               
State of Washington. It's a  very real possibility for Alaska, as                                                               
it marries  very well with  the existing seafood industry  in the                                                               
sense  that  Alaska  has seafood  processing  plants,  harvesting                                                               
vessels, and people already active  in this area. Alaska also has                                                               
the Alaska Seafood Marketing Institute (ASMI).                                                                                  
                                                                                                                                
MS. DECKER said  they recognized that the State of  Alaska had to                                                               
be on board in a very  significant way and play a pro-active role                                                               
in  spearheading something  like  this. So,  they discussed  this                                                               
vision with  the governor and  asked him to create  a Mariculture                                                               
Task Force to look at a comprehensive  plan for how to do this in                                                               
a strategic way.                                                                                                                
                                                                                                                                
4:49:14 PM                                                                                                                    
MS. DECKER said  she now serves on that task  force along with 10                                                               
other  people. The  task force  has identified  this bill  as one                                                               
piece  of a  framework to  help  move this  concept forward.  The                                                               
House companion bill  (HB 128) has 14 letters of  support from 14                                                               
different organizations  that are working  their way over  to the                                                               
Senate version.  She said this  legislation is modeled  after the                                                               
Salmon  Enhancement Program,  which is  very a  successful model.                                                               
Back in  the 1980s,  the state helped  support and  create salmon                                                               
hatcheries  and an  entire enhancement  program, and  a revolving                                                               
loan fund that  helped build and operate those  hatcheries in the                                                               
short term was  created until salmon were returning  on a regular                                                               
basis that  could be  taxed, a  portion of  which could  be taken                                                               
through cost  recovery to pay  back those loans. Now  those loans                                                               
are  paid back  with interest,  and salmon  are still  returning,                                                               
amounting to $100-200 million annually.                                                                                         
                                                                                                                                
MS. DECKER  said there has  been some activity around  king crab,                                                               
sea cucumbers, and geoducks, but  other shellfish need help also.                                                               
ADF&G's  conservative   approach  always  gives  wild   stocks  a                                                               
priority, and they  will continue to do that  with shellfish. She                                                               
urged their support and quick action.                                                                                           
                                                                                                                                
GINNY   ECKERT,  Fisheries   Professor,   University  of   Alaska                                                               
Fairbanks  (UAF), Juneau,  Alaska, said  she serves  as associate                                                               
director of Alaska  Sea Grant. She has been in  Alaska since 2000                                                               
as  a fisheries  expert and  fisheries professor;  for about  the                                                               
last 10 years  she has been working on  king crab rehabilitation.                                                               
In  that capacity,  she serves  as the  science director  and co-                                                               
chair  of  the  Alaska  King  Crab  Research  Rehabilitation  and                                                               
Biology Program (AKCRRAB).                                                                                                      
                                                                                                                                
She  spoke   to  the  need   for  rehabilitation   of  shellfish,                                                               
particularly king  crab. King crab  is native to Alaska  and many                                                               
of these  stocks crashed in  the 60s, 70s,  and 80s. Many  of the                                                               
fisheries were  closed in the  early 80s and have  not recovered.                                                               
Overfishing  is  likely the  cause  of  the decline,  but  people                                                               
didn't realize  that these  stocks were being  fished as  hard as                                                               
they were. In  addition, by-catch in trawl  fisheries and foreign                                                               
fisheries  happened before  the 1976  bill, the  Magnuson Stevens                                                               
Act, that prohibited it.                                                                                                        
                                                                                                                                
MS. ECKERT  said research was  conducted trying to  determine the                                                               
feasibility  of rehabilitating  king crab  and many  other stocks                                                               
that have crashed,  and much has been learned about  king crab in                                                               
the first few years of life.  Efforts have been made to grow king                                                               
crab in  the hatchery,  and work  has been done  in the  field to                                                               
identify whether habitat has changed,  which it hadn't. A lack of                                                               
natural recruitment has  been identified in many  of these places                                                               
indicating  the  possibility   of  enhancing  and  rehabilitating                                                               
through hatchery supplementation. Experiments  in the 50s and 60s                                                               
were conducted  suggesting that this  is possible.  For instance,                                                               
the Russians  introduced king  crab to the  Barents Sea  where it                                                               
was not  native, and it  is now a  vibrant fishery in  Russia and                                                               
Norway.  AKCRRAB is  only proposing  to do  this in  places where                                                               
crabs  were traditionally  harvested  and  were traditionally  an                                                               
important sport, subsistence, and commercial fishery.                                                                           
                                                                                                                                
4:54:35 PM                                                                                                                    
SENATOR WIELECHOWSKI said this bill is  a great idea but asked if                                                               
she  was concerned  with  the "horror  stories"  from across  the                                                               
world about introduced species that outcompete everything else.                                                                 
                                                                                                                                
MS. ECKERT responded  that this is just a proposal,  and the bill                                                               
adds  special qualifications  that only  native species  would be                                                               
used for the shellfish enhancement.  The ADF&G specifies that the                                                               
adults  that would  be used  for any  supplementation would  come                                                               
from  the  local  area.  She  agreed that  they  didn't  want  to                                                               
introduce  things  that  don't  belong here,  and  she  wants  to                                                               
protect wild stocks.                                                                                                            
                                                                                                                                
MICHELLE   RIDGWAY,   representing   herself,   Juneau,   Alaska,                                                               
supported SB  89. She is also  a marine ecologist on  the science                                                               
panel  of  the  Alaska  King  Crab  Research  Rehabilitation  and                                                               
Biology  Program  (AKCRRAB). She  appreciated  the  depth of  the                                                               
questions on  financial, management,  and big  picture scenarios.                                                               
She believes a  wholistic approach is needed  to support recovery                                                               
of the stocks.  She said she is a lifelong  Alaskan and now lives                                                               
in Georgia where  one of the new hatcheries  is potentially going                                                               
to be  taking off. Shellfish enhancement  and mariculture provide                                                               
an opportunity  for coastal  communities for  year-round economic                                                               
employment  and more  advancement  of some  of  the science  that                                                               
supports  those  industries. It  is  extremely  important now  to                                                               
consider carefully how to proceed.                                                                                              
                                                                                                                                
She related  that she had also  served for 10 years  on the North                                                               
Pacific Fisheries  Management Council  (NPFMC) as well  as worked                                                               
with ADF&G  for many years  out of Craig,  and she has  seen some                                                               
very significant  declines in that time.  She observed first-hand                                                               
the decline of  abalone in southern Southeast  Alaska; she worked                                                               
in the Pribilof region and saw  the decline of blue king crab and                                                               
others.  These  things  occur, and  technology  is  available  to                                                               
improve  enhancement efforts.  It takes  years to  understand the                                                               
life  history of  these species  and years  of commitment  on the                                                               
state's part to see some of these efforts come to fruition.                                                                     
                                                                                                                                
MS. RIDGWAY  said this  bill is  a good  vehicle to  advance this                                                               
enhancement effort even if it  needs some fine-tuning of language                                                               
to   better  fit   a  shellfish-based,   mariculture  enhancement                                                               
industry for  Alaska. This will  not only benefit  our fishermen,                                                               
it  will  benefit the  young  up  and  coming scientists  in  the                                                               
university programs who  need jobs. It is  a great, comprehensive                                                               
program to do  that. She encouraged them to  maintain their broad                                                               
thinking, because  this requires  not just  money, not  just law,                                                               
but community support.                                                                                                          
                                                                                                                                
4:59:21 PM                                                                                                                    
SENATOR COGHILL said the timeline  for cost recovery in shellfish                                                               
is very  different from finfish and  asked for a concept  of what                                                               
they  are  talking about  in  terms  of cycles:  decades,  years,                                                               
months?                                                                                                                         
                                                                                                                                
5:00:09 PM                                                                                                                    
MS. RIDGWAY answered that many  of these species - sea cucumbers,                                                               
red king crab, blue king crab,  scallops, and abalone - have very                                                               
different life  histories, and their  longevity is  variable. The                                                               
very youngest of  these species could be harvested as  young as 3                                                               
years and some would not be  available for harvest until 7 years,                                                               
as in the case of a blue king crab.                                                                                             
                                                                                                                                
SENATOR  WIELECHOWSKI   asked  if   any  ADF&G   biologists  have                                                               
expressed concerns about this concept.                                                                                          
                                                                                                                                
CHAIR GIESSEL said she would forward the question and distribute                                                                
the answer. Finding no further testimony, she closed public                                                                     
testimony and held SB 89 in committee.                                                                                          
                                                                                                                                
5:02:22 PM                                                                                                                    
CHAIR GIESSEL adjourned the Senate Resources Committee meeting                                                                  
at 5:02 p.m.                                                                                                                    
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
SB 28 - Version A.PDF SRES 4/5/2017 3:30:00 PM
SB 28
SB 28 - Sponsor Statement.pdf SRES 4/5/2017 3:30:00 PM
SB 28
SB 28 - Sectional Analysis.pdf SRES 4/5/2017 3:30:00 PM
SB 28
SB 28 - Supporting Documents - Maps.pdf SRES 4/5/2017 3:30:00 PM
SB 28
SB 28 - Letter of Support - Petersburg Borough Assembly.pdf SRES 4/5/2017 3:30:00 PM
SB 28
SB 89 - Version A.PDF SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Support - City and Borough of Wrangell.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Support - Southwest Alaska Municipal Conference.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Support - Alaska Fisheries Development Foundation - 3 - 27 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Support - Alaska Mariculture Task Force - 3 - 27 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Support - Alaska Fisheries Development Foundation - 3 - 27 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Fiscal Note - DFG COMM - 3 - 31 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Support - OceansAlaska - 3 - 1 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Fiscal Note - DFG CFEC - 4 - 3 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 88 - Explanation of Changes - From Version J to Version R - 4 - 4 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 88
SB 88- Sen Resources Draft CS - Version R - 4 - 3 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 88
SB 89 - Support -APICDA.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 89 - Sponsor Statement.pdf SRES 4/5/2017 3:30:00 PM
SB 89
SB 28- Support - City and Borough of Juneau.pdf SRES 4/5/2017 3:30:00 PM
SB 28
SB 28 - Support- Petersburg Chamber of Commerce - 2 - 3 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 28
Updated Agenda - 4 - 5 - 17.pdf SRES 4/5/2017 3:30:00 PM
SB 89 - Sectional Analysis.pdf SRES 4/5/2017 3:30:00 PM
SB 89