Legislature(2017 - 2018)BUTROVICH 205
04/05/2017 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB88 | |
| SB28 | |
| SB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 28 | TELECONFERENCED | |
| *+ | SB 89 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 88 | TELECONFERENCED | |
| += | SB 65 | TELECONFERENCED | |
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.