Legislature(2021 - 2022)BUTROVICH 205
02/22/2021 03:30 PM Senate RESOURCES
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SB 64-SHELLFISH PROJECTS; HATCHERIES; FEES 4:04:32 PM CHAIR REVAK announced the consideration of SENATE BILL NO. 64 "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 shellfish enhancement project permits; allowing the Alaska Seafood Marketing Institute to market aquatic farm products; and providing for an effective date." 4:04:52 PM SENATOR STEVENS, speaking as sponsor of SB 64, stated he appreciated the testimony on the previous bill and noted Ms. Curry made a good comment that the seafood industry is Alaska's only renewable industry. If the state treats it right, if the legislature creates opportunities for the processors to go into new lines, as well as shellfish enhancement, then the state will see a major long-term benefit. He said SB 64 is about strengthening Alaska's fisheries portfolios, promoting economic development policy, creating jobs, doing more research, and food security. In the big, long term picture the bill should be a win-win for Alaska, businesses, and consumers. 4:06:06 PM TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, explained SB 64 is a result of a considerable amount of work by stakeholders, biologists, and scientists. The large focus of the bill is on the crab and clam industry. He noted most of Alaska's crab fisheries have been shutdown for quite sometime for reasons that the scientific community does not entirely understand, but certainly may include overfishing of the state's crab fisheries. However, the state has not provided any substantive tools to fix the situation other than to discontinue the fishing of those species. MR. LAMKIN pointed out there has been what scientists call an environmental regime shift in Alaska's oceans where at one time the crustaceansor crabswere the dominant biomass of the state's waters, but nowadays that has shifted to finfish dominance. He explained finfish, for example, virtually all creatures out there really enjoy feeding on baby crabs and clamswhich are very vulnerable in the earliest stage of their lifeand predation is probably a bit part of this picture. MR. LAMKIN said SB 64 provides a legal framework for large scale, shellfish hatchery projects to function in Alaska to nurture the shellfish younglingsking crab, razor clams, and geoducksin their formative stages to provide them with a better shot at survival in the wild. The intent of the legislation is to carefully balance Alaska's wild versus enhanced programs and resources. He explained the policy structure contained in the bill represents an investment in the state's science, fisheries related jobs, private sector, and in Alaska's constitution for the principle of sustainable yield. He said hopefully the bill will ultimately improve what shows up on Alaska's dinner tables. MR. LAMKIN noted that earlier in the day, Senator Steven's office received two additional support letters from the Southeast Alaska Fishermen's Alliance as well as the Aleutian Pribilof Island Community Development Association in strong support of the bill. CHAIR REVAK asked Mr. Lamkin to proceed with the sectional analysis for SB 64. 4:09:07 PM MR. LAMKIN presented the following sectional analysis for SB 64: Section 1 AS 16.05.730(c) 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 AS 16.10.400(b) Removes a flat $100 permit application fee for new private nonprofit salmon hatcheries, to instead be determined by the department by regulation, as described in Section 3 of the bill, below Section 3 AS 16.10.400 Conforming language consistent with other fee structures set and adjusted by regulation, requiring fees to approximately reflect the cost of administering the application process, and to be reviewed and adjusted periodically. Section 4 Adds a new Chapter 12 to Title 16, "Shellfish Stock Enhancement Projects" AS 16.12.010 Provides direction to the commissioner of the Department of Fish and Game on the issuance of permits for private nonprofit shellfish fishery enhancement projects intended to improve the yield, rehabilitate stocks, or increase habitat for shellfish. This subsection also directs the commissioner to set an application fee and 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 the 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 the Board of Fisheries to establish regulations relating 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 restrictions on how monies receives 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. AS 16.12.100 Gives the department authority to inspect facilities at any time while the facility is in operation; AS 16.12.110 Requires a permit holder to submit an annual report to the department; AS 16.12.199 provides definitions for "enhancement project," "facility," "genetically modified shellfish," "hatchery," and "shellfish." 4:11:55 PM Section 5 Provides the Commercial Fisheries Entry Commission : AS 16.43.400(a) Provides the Commercial Fisheries Entry Commission authority to issue special harvest area entry permits to holders of private nonprofit shellfish rehabilitation, or enhancement project permits. Section 6 AS 16.43.430 Defines legal fishing gear for special harvest area entry permit holders. Section 7 AS 16.51.090 adds marketing and promotion of aquatic farm products to the powers and duties of the Alaska Seafood Marketing Institute (ASMI). Section 8 AS 16.51.110 conforming amendment, prohibiting ASMI from promoting aquatic farm products not from Alaska, a specific region of Alaska, or by a specific brand name. Section 9 AS 16.51.180(7) conforming amendment regarding the definition of "seafood." Section 10 AS 16.51.180 (8) is a new referential subsection pointing to the existing definition of "aquatic farm product" as described in AS 16.40.199, which states "an aquatic plant or shellfish,.. that is propagated, farmed, or cultivated in an aquatic farm and sold or offered for sale." Section 11 AS 17.20.049(b) Exempts shellfish raised in a private nonprofit shellfish project from the definition of "farmed fish." Section 12 AS 37.05.146(c) Makes application fee revenues received by the Dept. of Fish and Game from the salmon hatchery and shellfish hatchery programs be accounted for separately. Appropriations from those program receipts are not made from the unrestricted general revenue fund. Section 13 AS 43.20.012(a) Exempts a nonprofit corporation holding a shellfish fishery enhancement permit from state corporate income tax when making shellfish sales and engaging in shellfish cost recovery activity Section 14 AS 43.20.012(a) Is a technical conforming amendment required by prior session law and has no impact on the policies being set in this bill. Section 15 AS 43.76.390 Exempts shellfish harvested under a special harvest area entry permit from seafood development taxes. Section 16 Establishes an effective date for the salmon hatchery permit application fee change, as described in Section 2 above. Section 17 Authorizes the Department of Fish and Game to adopt implementing regulations. Section 18 Establishes an immediate effective date for Section 17 pursuant to AS 01.10.070(c). Section 19 Is a technical, conforming effective date for Section 14 concomitant with 2 CH 55, SLA 2013 and has no effect on the policy set forth in this bill. 4:14:41 PM CHAIR REVAK announced the committee will hear invited testimony on SB 64. 4:15:04 PM DR. GINNY ECKERT, Professor, University of Alaska; Director, Alaska Sea Grant, Fairbanks, Alaska, testified in support of SB 64. She noted her expertise is in shellfishhaving worked in shellfish in Alaska since 2000and has worked in king crab rehabilitation since 2007 as well as served as the science director and co-chair of the Alaska King Crab Research, Rehabilitation and Biology (AKCRRAB) Program. She thanked Senator Stevens and the legislature for their work on SB 64, noting she testified in support of the previous version of the legislation in 2016. She stated she will speak to the need for rehabilitation for shellfish, a fishery resource that includes crabs, clams, and abalonemany of these stocks are in decline. She noted she has done some recent work on abalone, a species with potential as well. DR. ECKERT said she is going to talk more about king crab, an iconic species native to Alaska. Many of the state's king crab stocks have crashed. In the Gulf of Alaska, king crab stocks crashed in the early 1980s and have not recovered since, even with fisheries closure. Over fishing is very likely the cause of the decline due to very high fishing rates, and the state did not have much knowledge about fishery science then. There is great concern about bycatch, including at that time an allowance for foreign fleets until the early 1970s. She noted the king crab stocksin the absence of fishinghave not recovered in almost 40 years. There are current stocks todaythe Bristol Bay red king crab fisheryin decline that warrants concern for possible closure in the upcoming years. DR. ECKERT said AKCRRAB has done quite a bit of research on the feasibility of rehabilitation through culturing king crab in a hatchery and out-planting them. AKCRRAB has learned a lot about king crabs and is learning more about the bottlenecks and potential for recovery. AKCRRAB has very good evidence these stocks are recruitment-limited, and enhancement could help. AKCRRAB has out-planted animals on a small scale and is able to find these animals when they grow larger several years later However, moving forward, doing experiments at a larger scale, and to potentially rehabilitate stocks through stock enhancement requires SB 64. DR. ECKERT said she understands there could be concerns about genetics; however, the noted shellfish are very different from salmon. Hatcheries collect adult salmon and decide who is mating with each other. Through shellfish stock enhancement, the animals are reproducing in the wild, they are mating in the wild, and AKCRRAB brings them into the lab with the offspring somewhat intact. The females sort of carry the embryos, so AKCRRAB can just hatch them out to give them an advantage in the early stages and then put them out into the wild so that they can be more successful. 4:18:52 PM SENATOR KIEHL noted that terminal harvest areas are associated with salmon hatcheries, which is relatively easy because the salmon comeback to their release location. He asked if crab show the same affinity towards a place and whether that is an option the department will have in managing those cost recovery fisheries. CHAIR REVAK asked how crab migrate. DR. ECKERT replied crabs are very different from salmon, they are not going to migrate back to the place where they were born. She conceded AKCRRAB has a lot to learn about where these crabs go. She said AKCRRAB has done work in recent years that suggest the young crabs inhabit shallower waters and migrate into deeper waters. Crab fisherfolk will note crabs go deeper in the summer and shallower in the winter. Colleagues at the National Marine Fisheries Service in Kodiak have out-planted very small juveniles and they have been able to find them a couple of years later. DR. ECKERT summarized that AKCRRAB has opportunities to do more work, but the program believes these animals are probably staying relatively in a small area; ADF&G could talk about how to manage this in the future. SENATOR KIEHL noted the bill has a prohibition on genetically modified shellfish and it includes a definition. He pointed out freshwater fish hatcheries will modify their fish so they cannot reproduce. However, the sponsor spoke about the intension to enhance recovery and get reproducing stock numbers up. He asked if there is the possibility in the future, especially if shellfish stick to a particular area, to do the same sort of thing or if the definition of genetic modification rules out the possibility of enhancing a localized area with nonreproducing shellfish. 4:21:43 PM DR. ECKERT replied she does not know the answer. She explained AKCRRAB does not understand the biology that much but there are fascinating things that are happening with technology now. The way AKCRRAB currently grows crab in the hatchery is to allow female crabs to hatch-out their embryos without genetic manipulation. AKCRRAB wants to focus carefully to not overwhelm any of the natural genetic diversity. She noted there is potential for future modification. Norway is working on lobster; they are a leader in many of the aquaculture efforts. However, she does not know if Norway has done anything like [genetic modification], but if that were to happen, they would be first. SENATOR KIEHL conceded that concern is 15-20 years out at the closest and is not an issue. 4:23:36 PM HEATHER MCCARTY, Co-Chair, Alaska King Crab Research, Rehabilitation and Biology (AKCRRAB) Program, Juneau, Alaska, testified in support of SB 64. She noted she is also the Chair of the Alaska Governor's Mariculture Task Force (AMTF). She said her main interest in crab came from her employer, Central Bering Sea Fishermen's Association (CBSFA), one of Western Alaska's six [Community Development Quota] (CDQ) Program groups for St. Paul Island in the Pribilof Islands. Blue king crab used to surround St. Paul Island, it was a viable and lucrative fishery both for the local people and for the State of Alaska for many years. However, like several other crab stocks, the blue king crab had precipitously declined in the early 1980s and fisherfolk have not fished the area since then, but the stocks continue to decline. A group started the AKCRRAB Program in 2006 to try and bring the stock back as well as the red king crab in the Kodiak area. MS. MCCARTY noted she has been part of AMTF since the beginning in 2016. AMTF consists of scientists, industry people, community representatives, and agency representatives for the State of Alaska. AMTF is dedicated to developing mariculture in Alaska for the benefit of the state and its people. AMTF supports the passage of SB 64noting previous support for the legislation's various iterations for the last two legislative sessions. She said AMTF believes that the mariculture of shellfish and seaweed has great potential in Alaska to benefit the economies particularly of coastal communitiesto provide ocean-related jobs in those communities in entry-level ways for residents to make use of their experience on the water and their existing equipment such as boats and so onnot to mention the existing processing opportunities in those coastal communities. SB 64 is a big piece of that development. MS. MCCARTY explained the bill is one of AMTF's priorities because advancing the culture of shellfishas Dr. Eckert describedrequires the legislation for advancement. AMFT spent the last decade and a half developing methods of crab in captivity, release monitoring, and understanding habitat needs. AMTF cannot go the extra step into larger scale production without the benefit of SB 64 to implement regulations and help the program go one step further into making shellfish a viable industry. 4:27:50 PM SAM RABUNG, Director, Commercial Fisheries Division, Alaska Department of Fish and Game, Juneau, Alaska, testified in support of SB 64. He explained Alaska currently limits mariculture to aquatic farming, sometimes called "wet farming," which entails growing privately-owned organisms under positive control and not releasing themit is private property for private business for profit. In contrast, the fisheries in Alaska are common property and owned by all the people of Alaska. Mariculture could restore extirpated stocks, rehabilitate weak stocks, and enhance fisheries to support harvest levels above natural production; however, currently that is not legal and that is the reason for SB 64. MR. RABUNG said in response to Senator Kiehl's earlier question about special harvest areas for crab, there is a provision in SB 64 that allows for a fishery assessment as a cost recovery tool, so the common property could harvest the organisms in a release area and they pay an assessment to fund the cost of the project, it is just one of the many available tools if SB 64 were to pass. He noted to answer the previous question by Senator Kiehl regarding releasing non-reproducing organisms, the problem with that is that would preclude being able to restore or rehabilitate stocks because they would not be able to reproduce. Brood stock collection would occur in an area near the release location area and brought into a hatchery for spawning inducement and progency protection until their sizes allow for out-planting survival until maturity for harvest. MR. RABUNG said SB 64 would require that the entities performing the hatchery work be nonprofits. Mechanisms to support the hatchery work would entail either a fisheries assessment tax, stakeholder self-assessment, or a direct cost recovery from fishing. The program would require self-support. 4:31:15 PM SENATOR KIEHL referenced cost recovery to a fishery. He asked him if the department is concerned with the comingling of a common property stocknatural versus enhancedor does he see the fishery as comparable to the incidental catch of some wild stock when a hatchery cost recovery is fishing salmon. MR. RABUNG replied yes, the department will start off at low levels with monitoring with the intention to augment the harvest. The harvest will have wild stock with it, but the intent for a direct cost recovery harvest is to focus on hatchery or project-produced organisms. He conceded [crabs] are not as clean a fit as the salmon because the salmon returns to their release location at maturity; however, this is a species-by-species approach. For example, crabs are mobile and can move around, but clams are beach planted, so each species is unique. He noted the Eastside Cook Inlet razor clams are in declineno personal-use permits openings for 5-7 yearsand they are a candidate for a rehabilitation project for those beaches via hatchery out- planting. MR. RABUNG said dive fisheries for [sea cucumbers] and geoducks in Southeast Alaska is another enhancement-type project example. Rotating harvests for common-property dive fisheries occur approximately every three yearsfor natural stock recovery. Out- planting hatchery juveniles from the area after the fishery occurs could speed up the rotation. MR. RABUNG said he feels that most of these projects are probably not going to be directed-cost recovery because it is not as easy to sort them out and keep them segregated from their naturally produced cohorts. The other tools in the billfishery assessment tax or stakeholders taxing themselveswould probably be more likely used. 4:35:23 PM JEREMY WOODROW, Executive Director, Alaska Seafoods Marketing Institute, Juneau, Alaska, testified in support of SB 64. He said he will speak to the parts of the bill that pertain to the Alaska Seafoods Marketing Institute (ASMI). The Alaska Mariculture Task Force (AMTF) and the Alaska Shellfish Growers Association support the statutory change. He said as a public-private partnership between the State of Alaska and the Alaska seafood industry, ASMI has established a fostered economic development of Alaska's renewable natural seafood resources. ASMI plays a key role in the repositioning of Alaska's seafood industry as a competitive, market driven, food production industry. MR. WOODROW detailed ASMI accomplished its work to boost the value of Alaska's seafood through partnerships with retail grocers, foodservice distributors and operators, restaurant chains, universities, culinary schools, and the media. ASMI conducts consumer campaigns, public relations, advertising activities, and aligns with industry efforts to maximize effectiveness. ASMI also functions as a brand manager for the Alaska seafood family of brands. He said the economic opportunity for mariculture in Alaska is expanding quickly. With the support and efforts of AMTF, the industry is seeing growth from small family businesses selling boutique products to fisherfolk looking to utilize their vessels and skills in shoulder-seasons, to significant investment in production by Alaska's major seafood companies, recognizing the opportunity to diversify their existing Alaska product portfolios. MR. WOODROW detailed AMTF has identified the goal to build Alaska's mariculture production into a $100 million per year industry; this is no small feat and will require quite literally all-hands-on-deck to meet this objective. Providing the same opportunity for Alaska mariculture products that have benefited Alaska's fisheries for 40 years will undoubtingly help meet this goal by utilizing ASMI's expertise to include mariculture products and consumer retail foodservice and food aid outreach, and domestic and both in targeted markets. MR. WOODROW said the ASMI board would like to thank Chairman Revak and the members of the Senate Resources Committee for recognizing the value of Alaska's maritime economy and for the committee's consideration of meaningful legislation to aid economic development across Alaska's coastal communities. 4:38:21 PM JEFF HETRICK, Mariculture Director, Alutiiq Pride Marine Institute (APMI), Seward, Alaska, testified in support of SB 64. He detailed the Alutiiq Pride Marine Institute (APMI) houses its shellfish hatchery in Seward. APMI has been developing the hatchery technology for many of the important Alaska shellfish species such as littleneck clams, butter clams, razor clams, softshell clams, cockles, purple-hinged rock scallops, as well as red and blue king crab, Bosworth abalone, sea cucumbers, and most recently kelp; APMI is the first entity to successfully raise many of these species. He said in response to the questions concerning genetic manipulation, it is a common practice to create triploid or infertile mollusk shellfish. However, technology for crustaceans is not quite as understoodas Dr. Eckert saidbut triploidy is a valuable tool for addressing concerns with genetic impacts from shellfish hatcheries. MR. HETRICK noted, although APMI produces geoducks and oysters for the commercial operations, a major focus has been invested beyond the aquatic farm industry to conduct trial shellfish enhancement projects and APMI does that through planting and monitoring local beaches with clams and other species in an effort to have some tools to perhaps bring back some of these declining populations; all this work to date has been conducted under research permits through the Alaska Department of Fish and Game (ADF&G)they have been wonderful partnersas APMI develops this technology. MR. HETRICK explained due to lack of legislation, APMI has not been able to conduct programs that might be large enough to provide more scientific data and harvest opportunities. APMI has worked in some areasPort Graham, Seldovia, Lower Cook Inlet where locals are actually harvesting some of APMI's enhanced populations, but those were planted under research permits and minimal. MR. HETRICK noted with king crabs, APMI has assembled a large team of experts in crab biology and management. APMI just finished its third year of an out-stocking program in Kodiak that has given APMI great expectations for success if APMI continues along the crab enhancement path. He said he cannot understate the significance of having SB 64 in play. Alaska's native coastal communities that have financially supported APMI's work for almost 20 years are anxiously awaiting some projects to bring back some of those resources. AMPI is certainly prepared to move beyond the experimental to the implementation phase of AMPI's work. 4:41:52 PM JULIE DECKER, Executive Director, Alaska Fisheries Development Foundation, Wrangell, Alaska, testified in support of SB 64. She said the bill creates a framework to develop the shellfish fishery enhancement and allows for ASMI to market aquatic products which will further the development of the new mariculture industry. She stated SB 64 accomplishes two-priority recommendations of the AMTFwhich she also serves onas a part of a larger plan to fully develop the mariculture industry in Alaska with a goal to grow a $100-million-per-year industry in 20 years. MS. DECKER detailed Alaska Fisheries Development Foundation (AFDF) membership is comprised of seafood harvesters, seafood processors, and support businesses. AFDFfounded in 1978has a mission to identify opportunities common to the Alaska seafood industry; and develop efficient, sustainable outcomes that benefit the economy, environment, and coastal communities. She noted one of foundation's recent areas of work is the development of mariculture. As a direct result of this work with others, AMTFestablished in 2016completed a statewide comprehensive plan in 2018 with the goal of growing a $100- million industry. MS. DECKER explained as the facilitator for the certification of the Alaska salmon fishery as sustainable, AFDF has a unique viewpoint on some of the concerns of others for the potential of negative impacts from SB 64. AFDF is the client for both the Alaska Responsible Fisheries Management (RFM) and the Marine Stewardship Council (MSC) certifications of Alaska salmon. As a part of these certifications, ADF&G management of the salmon fishery, including salmon enhancement program, receives review every year by independent third-party experts to determine whether it meets internationally accepted standards for sustainably managed fisheries. Alaska salmon is currently certified as sustainable under both the RFM and MSC programs because ADF&G's management incorporates a cautionary approach that prioritizes wild fish and minimizes adverse impacts to wild stocks. MS. DECKER pointed out ADF&G has extensive enhancement policies which protect wild stocks, including genetics policies, release sites, marking, and disease policies; given these policies, ADF&G's is fulfilling its constitutional mandate to manage the state's fishery resources for sustainability. ADF&G will similarly manage shellfish enhancement with the same constitutional mandate to protect wild stocks. She said another benefit of developing shellfish fishery enhancement is the important role that shellfish hatcheries may play in helping the state adapt to ocean changes and acidification. During additional shellfish hatchery technique development, the state will learn more about its abilities to mitigate the effects of ocean acidification in a hatchery setting. For example, adjusting pH levels at critical juvenile stages in hatchery can improve survival after crab release into the wild. Therefore, shellfish hatcheries may play a critical role in the future by helping to protect wild stocks from negative impacts of ocean acidification. MS. DECKER stated shellfish enhancement can diversify and expand economic opportunities by increasing harvest for sports, subsistence, and commercial uselike Alaska's salmon enhancement program. For example, salmon enhancement, from 2012-2017, contributed approximately $720 million in ex-vessel value and $2.1 billion in first wholesale value to the state's economy. Similarly, shellfish enhancement can infuse the economies of Alaska's communities. She said AFDF believes that growth of the mariculture industry can play an important role in Alaska's economic recovery from the COVID-19 disaster, and passage of SB 64 is central to fully enabling that recovery and potential. 4:47:10 PM CHAIR REVAK announced the committee will hear public testimony on SB 33 and SB 64 during an upcoming meeting. 4:47:18 PM CHAIR REVAK held SB 64 in committee.