00 CS FOR SENATE BILL NO. 22(RES) 01 "An Act relating to mariculture; relating to the Board of Fisheries; relating to the 02 commissioner of fish and game; relating to management of enhanced stocks of shellfish; 03 authorizing certain nonprofit organizations to engage in shellfish enhancement projects; 04 and providing for an effective date." 05 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 06 * Section 1. AS 16.05.300 is amended by adding a new subsection to read: 07 (c) The Board of Fisheries shall hold at least one annual public hearing 08 regarding the status of shellfish enhancement projects, shellfish hatcheries, and the 09 mariculture industry in the state. The board may hold a hearing under this subsection 10 in conjunction with another public hearing or meeting. At a hearing held under this 11 subsection, the commissioner of fish and game or the commissioner's designee shall 12 address the status of the state's mariculture industry. Before a hearing, the board may 13 identify specific mariculture-related matters of interest for discussion at the hearing 14 and request that the commissioner or the commissioner's designee address those issues 01 at the hearing. The board shall provide reasonable notice of each public hearing held 02 under this subsection. The notice must include the date, time, and place of the hearing. 03 In this subsection, "enhancement project," "hatchery," and "shellfish" have the 04 meanings given in AS 16.12.199. 05 * Sec. 2. AS 16.05.730(c) is amended to read: 06 (c) The board may 07 (1) consider the need of enhancement projects authorized under 08 AS 16.10.400 and contractors who operate state-owned enhancement projects under 09 AS 16.10.480 to harvest and sell fish produced by the enhancement project that are not 10 needed for brood stock to obtain funds for the purposes allowed under AS 16.10.450 11 or 16.10.480(d); 12 (2) consider the need of enhancement projects authorized under 13 AS 16.12.010 to harvest and sell shellfish that are not needed for brood stock to 14 obtain funds for the purposes allowed under AS 16.12.080; 15 (3) [. THE BOARD MAY] exercise its authority under this title as it 16 considers necessary to direct the department to provide a reasonable harvest of fish, in 17 addition to the fish needed for brood stock, to an enhancement project to obtain funds 18 for the enhancement project if the harvest is consistent with sustained yield of wild 19 fish stocks; and 20 (4) [. THE BOARD MAY] adopt a fishery management plan to 21 provide fish to an enhancement project to obtain funds for the purposes allowed under 22 AS 16.10.450, [OR] 16.10.480(d), or AS 16.12.080. 23 * Sec. 3. AS 16.10.400(b) is amended to read: 24 (b) The application for a permit under this section shall be on a form 25 prescribed by the department and be accompanied by an application fee of $1,000 26 [$100]. The commissioner may waive the submission of an application for a permit to 27 operate a hatchery under AS 16.10.480. 28 * Sec. 4. AS 16 is amended by adding a new chapter to read: 29 Chapter 12. Shellfish Enhancement Projects. 30 Sec. 16.12.010. Permits for shellfish enhancement projects. (a) Subject to 31 the restrictions imposed by statute or regulation under this chapter, the commissioner 01 may issue a permit to a nonprofit corporation organized under AS 10.20 for a shellfish 02 enhancement project. 03 (b) Each applicant for a permit under this section shall apply in a format 04 prescribed by the department and pay an application fee of $1,000. 05 (c) A permit issued under this section is nontransferable. If a permit holder 06 sells or leases a facility for which a permit has been issued under this section, the new 07 operator shall apply for a permit under this section. 08 (d) The commissioner shall consult with and solicit recommendations from 09 federal and state agencies and technical experts in the relevant area regarding permit 10 stipulations and issuance. 11 (e) The commissioner may not issue a permit under this section unless the 12 commissioner determines that the action would result in substantial public benefits and 13 would not jeopardize natural stocks. 14 Sec. 16.12.020. Hearings before permit issuance. (a) At least 30 days before 15 the issuance of a permit under AS 16.12.010, the department shall hold a public 16 hearing in a central location in the vicinity of the proposed release of shellfish. 17 (b) Notice of the hearing shall be published in a newspaper of general 18 circulation once a week for three consecutive weeks, with completion of the notice at 19 least five days before the hearing. 20 (c) The department shall conduct the hearing. The applicant shall present a 21 plan for the proposed shellfish enhancement project describing relevant facts that may 22 be of interest to the department or to the public and the capacity of the facility. The 23 department shall give interested members of the public an opportunity to be heard. 24 (d) The department shall record and consider objections and recommendations 25 offered by the public at the hearing conducted under this section. The department shall 26 respond in writing, not later than 30 days after the hearing is held, to a specific 27 objection offered by a member of the public at the hearing. 28 Sec. 16.12.030. Conditions of a permit. The department shall require, in a 29 permit issued under this chapter, that the permit holder 30 (1) procure shellfish from the department or a source approved by the 31 department; 01 (2) place shellfish only in water of the state specifically designated in 02 the permit; 03 (3) not procure or place genetically modified shellfish into the water of 04 the state; 05 (4) not resell or transfer shellfish sold to a permit holder by the state or 06 by another party approved by the department; 07 (5) not release shellfish before approval of the department, and, for 08 purposes of pathological examination and approval, that the permit holder notify the 09 department at least 15 days before the date of the proposed release of shellfish; 10 (6) destroy diseased shellfish in a specific manner and place designated 11 by the department; 12 (7) harvest shellfish only at specific locations and under specific 13 conditions as designated by the department; 14 (8) make surplus shellfish available for sale first to the department and 15 then, after inspection and approval by the department, to other permit holders 16 operating under this chapter; 17 (9) provide a copy of the sales transaction to the department if surplus 18 shellfish are sold by a permit holder to another permit holder; 19 (10) release shellfish in an area where the shellfish will be available to 20 traditional fisheries, subject to the provisions of this chapter and regulations adopted 21 under this chapter. 22 Sec. 16.12.040. Alteration, suspension, or revocation of permit. (a) If a 23 permit holder fails to comply with the conditions and terms of the permit issued under 24 AS 16.12.010 within a reasonable period after notification by the department of 25 noncompliance, the permit may be suspended or revoked, in the discretion of the 26 commissioner. 27 (b) If the commissioner finds that the operation of the permitted activity is not 28 in the best interests of the public, the commissioner may alter the conditions of the 29 permit to mitigate the adverse effects of the operation or, if the adverse effects are 30 irreversible and cannot be mitigated sufficiently, initiate a termination of the operation 31 under the permit over a reasonable period under the circumstances, not to exceed four 01 years. During the period that the operation is being terminated, the permit holder may 02 harvest shellfish under the terms of the permit but may not release additional shellfish. 03 Sec. 16.12.050. Regulations relating to released shellfish. (a) Shellfish 04 released into the natural water of the state by a permit holder under this chapter are 05 available to the people for common use and are subject to regulation under applicable 06 law in the same way as shellfish occurring in their natural state except when they are 07 in a special location designated by the department for harvest by a permit holder. 08 (b) The Board of Fisheries may, after the issuance of a permit by the 09 commissioner, amend by regulation adopted in accordance with AS 44.62 10 (Administrative Procedure Act), the terms of the permit relating to the source of brood 11 stock, the harvest of shellfish by permit holders, and the specific locations designated 12 by the department for harvest. The Board of Fisheries may not adopt a regulation or 13 take an action regarding the issuance or denial of a permit required in this chapter. 14 Sec. 16.12.060. Department assistance and cooperation. (a) Before and after 15 permit issuance under AS 16.12.010, the department shall make reasonable efforts, 16 within the limits of time and resources, to advise and assist applicants or permit 17 holders, as appropriate, as to shellfish enhancement projects, including the planning, 18 construction, and operation of facilities. 19 (b) Nothing in this section exempts an applicant or permit holder from 20 compliance with this chapter or from compliance with the regulations or restrictions 21 adopted under this chapter. 22 Sec. 16.12.070. Brood stock sources. (a) The department shall approve the 23 source and number of shellfish taken for use as brood stock under AS 16.12.010 - 24 16.12.199. 25 (b) Where feasible, a permit holder shall first take shellfish from stocks native 26 to the area in which the shellfish will be released. 27 Sec. 16.12.080. Sale of shellfish; use of proceeds; quality and price. (a) A 28 permit holder that sells shellfish harvested from the natural water of the state, or sells 29 shellfish to another permit holder under this chapter, shall use the funds only for 30 reasonable operating costs, including debt retirement, expanding its facilities, shellfish 31 enhancement projects, shellfish research, or to assist in meeting the department's costs 01 of managing the affected fisheries for the area in which the shellfish release is located. 02 (b) A permit holder shall ensure that shellfish harvested and sold for human 03 consumption are of comparable quality to shellfish harvested by commercial fisheries 04 in the area and are sold at prices commensurate with the current market. 05 Sec. 16.12.090. Cost recovery fisheries. (a) A permit holder may harvest 06 shellfish for a shellfish enhancement project in 07 (1) a special harvest area through agents or employees of or persons 08 under contract with the permit holder as provided under a permit from the department 09 or regulations of the Board of Fisheries; or 10 (2) a special harvest area through the common property fishery under 11 this section. 12 (b) A permit holder may, by a majority vote of the membership of the permit 13 holder's board, elect to harvest shellfish in a special harvest area established for an 14 enhancement project through the common property fishery. At the request of the 15 permit holder and if the commissioner determines that there are no allocative issues 16 involved, and after reasonable consultation with affected commercial fishermen, the 17 commissioner may adopt regulations governing the harvest of shellfish in a special 18 harvest area through a common property fishery. The regulations must specify the 19 terms, conditions, and rules under which the common property fishery in the special 20 harvest area shall be conducted, including requirements for holding inspections and 21 reporting of harvests and sales of shellfish taken in the special harvest area. Following 22 adoption of regulations by the department, before January 15 of each year, the permit 23 holder's board of directors, by a majority vote of the board's membership, may 24 determine whether the permit holder will operate under the regulations adopted under 25 this subsection during the current calendar year and shall notify the department if the 26 permit holder intends to operate under the regulations adopted under this subsection. 27 The Board of Fisheries may adopt regulations under AS 16.05.251 regarding a 28 fisheries management plan governing operations under this subsection in a special 29 harvest area, including allocation plans. Participation in the fishery must be open to all 30 interim-use permit and entry permit holders who hold permits to operate a type of gear 31 that may be used in the fishing district in which the special harvest area is located if 01 that type of gear is authorized by regulation to be used in the special harvest area. An 02 interim-use permit holder or an entry permit holder who takes shellfish in a common 03 property fishery in a special harvest area may sell the shellfish to a fish buyer or 04 processor who is licensed to do business in the state. 05 (c) As a condition of participation in a common property shellfish fishery in a 06 special harvest area under this section, a fisherman who participates in the fishery is 07 subject to the payment of the assessment levied under (d) of this section on the 08 projected value of the shellfish or on the pounds of shellfish harvested. The 09 assessment is levied on the shellfish that the fisherman takes in the special harvest area 10 and sells to a licensed buyer. The buyer of the shellfish must be licensed under 11 AS 43.75, and the buyer shall collect the assessment on shellfish taken in a special 12 harvest area at the time of purchase and remit the assessment to the Department of 13 Revenue in accordance with regulations adopted by the Department of Revenue. 14 (d) The Department of Revenue may, by regulation, annually, by March 1 of 15 each year, set the assessment levied on shellfish taken in a special harvest area in 16 consultation with the Department of Commerce, Community, and Economic 17 Development, the permit holder, and representatives of affected commercial 18 fishermen. The assessment shall provide sufficient revenue to cover debt service, 19 reasonable operating expenses, reasonable maintenance expenses, and development or 20 maintenance of a reserve fund up to 100 percent of annual operating costs of the 21 permit holder's shellfish enhancement project. In setting the assessment, the 22 department shall consider the estimated harvest of shellfish in the special harvest area, 23 the projected price to be paid for shellfish in the region, the amount of the existing 24 reserve held by the permit holder, and the amount by which the assessment collected 25 in previous years exceeded or fell short of the amount anticipated to be collected. The 26 assessment may not exceed 50 percent of the value of the shellfish. The department 27 may levy the assessment as a percentage of the projected value of the shellfish 28 harvested in the special harvest area or as a flat rate on each pound of shellfish 29 harvested in the area, to the nearest whole cent. 30 (e) The Department of Revenue shall deposit the assessments collected under 31 this section in the general fund. The legislature may appropriate the funds collected 01 under this section to the permit holder who is carrying out an enhancement project, 02 including the operation of a facility, in the special harvest area in which the 03 assessment was levied. A permit holder shall use funds appropriated under this 04 subsection for the purposes set out under AS 16.12.080(a). The legislature may also 05 appropriate funds collected under this section to the Department of Revenue for costs 06 incurred by the department under this section. 07 (f) A person who violates a regulation adopted under (b) of this section is 08 guilty of a violation under AS 16.05.722 or a misdemeanor under AS 16.05.723. A 09 person who violates a regulation adopted by the Department of Revenue under (c) of 10 this section is guilty of a class A misdemeanor. 11 (g) In this section, 12 (1) "special harvest area" means an area designated by the 13 commissioner or the Board of Fisheries where shellfish may be harvested by permit 14 holders under this chapter and by the common property fishery; 15 (2) "value" has the meaning given in AS 43.75.290. 16 Sec. 16.12.100. Inspection by the department. (a) A permit holder shall 17 allow the department to inspect the permit holder's enhancement project facility at any 18 time the enhancement project facility is in operation. The department shall conduct the 19 inspection in a reasonable manner. 20 (b) The department shall bear the cost of an inspection performed under this 21 section. 22 Sec. 16.12.110. Annual report. A person who holds a permit under this 23 chapter shall submit an annual report not later than December 15 to the department. 24 The report must be made on a form prescribed by the department and contain 25 information pertaining to 26 (1) species; 27 (2) the brood stock source; 28 (3) the number, age, gender, and size of spawners; 29 (4) the number of eggs collected and juveniles produced; and 30 (5) the number, age, gender, and size of harvested shellfish attributable 31 to releases by the permit holder. 01 Sec. 16.12.199. Definitions. In this chapter, 02 (1) "enhancement project" means a project to 03 (A) augment the yield and harvest of shellfish above naturally 04 occurring levels by natural, artificial, or semi-artificial production systems; 05 (B) rehabilitate a shellfish stock by restoring it to its natural 06 levels of productivity; or 07 (C) increase the area of productive natural shellfish habitat; 08 (2) "facility" means a hatchery or other facility for a shellfish 09 enhancement project; 10 (3) "genetically modified shellfish" means shellfish whose genetic 11 structure has been altered at the molecular level by recombinant DNA and RNA 12 techniques, cell fusion, gene deletion or doubling, introduction of exogenous genetic 13 material, alteration of the position of a gene, or other similar procedure using artificial 14 processes; 15 (4) "hatchery" means a facility for the artificial propagation of stock, 16 including rearing of shellfish and release of shellfish into the natural water of the state; 17 (5) "shellfish" means a species of crustacean, mollusk, or other 18 invertebrate, in any stage of its life cycle, that is indigenous to state water. 19 * Sec. 5. AS 16.43.400(a) is amended to read: 20 (a) In addition to entry permits, interim-use permits, and educational permits, 21 the commission may issue special harvest area entry permits to 22 (1) holders of private, nonprofit hatchery permits issued by the 23 Department of Fish and Game under AS 16.10.400 - 16.10.475 for salmon; or 24 (2) nonprofit organizations holding a permit under AS 16.12 for a 25 shellfish enhancement project. 26 * Sec. 6. AS 16.43.430 is amended to read: 27 Sec. 16.43.430. Authorized gear. For the purposes of harvesting salmon or 28 shellfish, a special harvest area entry permit holder may employ any fishing gear 29 designated as legal gear in the applicable special harvest area by the Board of 30 Fisheries. 31 * Sec. 7. AS 17.20.049(b)(1) is amended to read: 01 (1) "farmed fish" means fish that is propagated, farmed, or cultivated 02 in a facility that grows, farms, or cultivates the fish in captivity or under positive 03 control but that is not a salmon hatchery that is owned by the state or that holds a 04 salmon hatchery permit under AS 16.10.400 or a shellfish facility that is permitted 05 under AS 16.12.010; in this paragraph, "positive control" has the meaning given in 06 AS 16.40.199; 07 * Sec. 8. AS 43.20.012(a) is amended to read: 08 (a) The tax imposed by this chapter does not 09 (1) apply to an individual; 10 (2) apply to a fiduciary; 11 (3) for a tax year beginning after December 31, 2012, apply to an 12 Alaska corporation that is a qualified small business and that meets the active business 13 requirement in 26 U.S.C. 1202(e) as that subsection read on January 1, 2012; [OR] 14 (4) for a tax year beginning after June 30, 2007, apply to the income 15 received by a regional association qualified under AS 16.10.380 or nonprofit 16 corporation holding a hatchery permit under AS 16.10.400 from the sale of salmon or 17 salmon eggs under AS 16.10.450 or from a cost recovery fishery under AS 16.10.455; 18 or 19 (5) apply to income received by a nonprofit corporation holding a 20 permit under AS 16.12.010 from the sale of shellfish under AS 16.12.080 or from 21 a cost recovery fishery under AS 16.12.090. 22 * Sec. 9. AS 43.20.012(a), as repealed and reenacted by sec. 2, ch. 55, SLA 2013, is 23 amended to read 24 (a) The tax imposed by this chapter does not apply to 25 (1) an individual; 26 (2) a fiduciary; [OR] 27 (3) the income received by a regional association qualified under 28 AS 16.10.380 or nonprofit corporation holding a hatchery permit under AS 16.10.400 29 from the sale of salmon or salmon eggs under AS 16.10.450 or from a cost recovery 30 fishery under AS 16.10.455; or 31 (4) the income received by a nonprofit corporation holding a 01 permit under AS 16.12.010 from the sale of shellfish under AS 16.12.080 or from 02 a cost recovery fishery under AS 16.12.090. 03 * Sec. 10. AS 43.76.390 is amended to read: 04 Sec. 43.76.390. Exemption. AS 43.76.350 - 43.76.399 do not apply to salmon 05 or shellfish harvested under a special harvest area entry permit issued under 06 AS 16.43.400. 07 * Sec. 11. The uncodified law of the State of Alaska is amended by adding a new section to 08 read: 09 APPLICABILITY. AS 16.10.400(b), as amended by sec. 3 of this Act, applies to 10 salmon hatchery permits applied for on or after the effective date of sec. 3 of this Act. 11 * Sec. 12. The uncodified law of the State of Alaska is amended by adding a new section to 12 read: 13 TRANSITION: REGULATIONS. The Department of Fish and Game and the Board 14 of Fisheries may adopt regulations necessary to implement this Act. The regulations take 15 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of the 16 law implemented by the regulation. 17 * Sec. 13. Section 12 of this Act takes effect immediately under AS 01.10.070(c). 18 * Sec. 14. Section 9 of this Act takes effect on the effective date of sec. 2, ch. 55, SLA 19 2013.