01/30/2019 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| Overview: Alaska Mariculture Development Plan/task Force | |
| SB22 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | SB 22 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
January 30, 2019
3:30 p.m.
MEMBERS PRESENT
Senator Chris Birch, Chair
Senator John Coghill, Vice Chair
Senator Cathy Giessel
Senator Lora Reinbold
Senator Click Bishop
Senator Scott Kawasaki
Senator Jesse Kiehl
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Daniel Ortiz
COMMITTEE CALENDAR
OVERVIEW: Alaska Mariculture Development Plan/Task Force
- HEARD
SENATE BILL NO. 22
"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 22
SHORT TITLE: SHELLFISH ENHANCE. PROJECTS; HATCHERIES
SPONSOR(s): SENATOR(s) STEVENS
01/16/19 (S) READ THE FIRST TIME - REFERRALS
01/16/19 (S) RES, FIN
01/30/19 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
JULIE DECKER, Chair
Alaska Mariculture Task Force
Wasilla, Alaska
POSITION STATEMENT: Provided an overview of the task force's
Alaska Mariculture Development Plan.
SAM RABUNG, Section Chief-Aquaculture Section
Division of Commercial Fisheries
Alaska Department of Fish and Game
Juneau, Alaska
POSITION STATEMENT: Answered questions regarding the Alaska
Mariculture Development Plan.
SENATOR GARY STEVENS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Sponsor of SB 22, provided an overview.
TIM LAMKIN, Staff
Senator Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Provided an overview of SB 22 and answered
questions.
TOMI MARSH, President
Oceans Alaska
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of SB 22.
JEFF HETRICK, Director
Alutiiq Pride Shellfish Hatchery
Seward, Alaska
POSITION STATEMENT: Testified in support of SB 22.
TREVOR SANDE, Member
Alaska Fisheries Development Foundation
Ketchikan, Alaska
POSITION STATEMENT: Testified in support of SB 22.
STEVE RICCI, Staff
Aleutian Pribilof Island Community Development Association
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 22.
TOMMY SHERIDAN, Director of Government Affairs
Silver Bay Seafoods, LLC
Cordova, Alaska
POSITION STATEMENT: Testified in support of SB 22.
NANCY HILLSTRAND, Shareholder
Pioneer Alaskan Fisheries, Inc.
Homer, Alaska
POSITION STATEMENT: Testified in opposition of SB 22.
MARCOS SCHEER, Second Vice President
Southeast Conference
Juneau, Alaska
POSITION STATEMENT: Testified in support of SB 22.
JULIE DECKER, Executive Director
Alaska Fisheries Development Foundation, Inc.
Wrangell, Alaska
POSITION STATEMENT: Testified in support of SB 22.
JERRY MACCUNE, President
Cordova District
Fishermen United
Cordova, Alaska
POSITION STATEMENT: Testified in support of SB 22.
ACTION NARRATIVE
3:30:04 PM
CHAIR CHRIS BIRCH called the Senate Resources Standing Committee
meeting to order at 3:30 p.m. Present at the call to order were
Senators Giessel, Kawasaki, Bishop, Kiel, Reinbold, and Chair
Birch.
^OVERVIEW: Alaska Mariculture Development Plan/Task Force
OVERVIEW: Alaska Mariculture Development Plan/Task Force
3:31:24 PM
CHAIR BIRCH read a statement on the committee's intention for
the session as it pertains to the meeting's presentation on the
Alaska Mariculture Development Plan as follows:
With the primary focus of this legislative session
being where it should be, on the budget, it's our
intent over the coming months to have the Senate
Resources Committee explore topics that might be able
to help the state diversify and improve our economy.
We will be exploring ways to encourage new industries,
to resolve resource access issues, and to make
practical improvements to state permitting processes,
in other words, we will be looking for ways to show
that Alaska is indeed, "open for business;" in that
spirit, we've invited folks from the Alaska
Mariculture Task Force to give us a brief presentation
and an update on this promising industry.
3:32:19 PM
SENATOR COGHILL joined the committee meeting.
3:32:30 PM
JULIE DECKER, Chair, Alaska Mariculture Task Force, Wasilla,
Alaska, said the committee will be provided with an update on
what the task force has done over the last two years as well as
a presentation on the task force's comprehensive plan.
She addressed "What is Mariculture?" and specified that Alaska
mariculture does not mean "finfish" farming. She specified that
"finfish" farming is prohibited and is not what the task force
is talking about.
She said mariculture is enhancement, restoration and farming of
shellfish and seaweeds; for example, Pacific oysters, king
crabs, seaweed, blue mussels, sea cucumbers, and geoducks. She
noted that the previously mentioned sea creatures are some of
the specifies which have had the most activity so far in
mariculture.
She detailed that mariculture entails the following three
activities:
1. Fishery Enhancement (public/private).
2. Restoration (public/private).
3. Aquatic Farming (private).
She explained that "aquatic farming" is currently what is
legally allowed, "fishery enhancement" and "restoration" are not
allowed by statute and that is what Senate Bill 22 (SB 22) would
allow for. She said SB 22 is needed to do "fishery enhancement"
and "restoration." She explained that the "overlap" for all
three activities is at the hatchery site; in other words, where
the seed is produced or the juveniles to put into the water to
grow and that is the purpose of either the shellfish or seaweed
hatcheries.
3:34:45 PM
MS. DECKER addressed "Why Mariculture" and explained that
mariculture is an area of potential economic development and
diversification. She noted "Hump Island Oyster Company" as a
mariculture company in Ketchikan that won "Entrepreneur of the
Year" award from the Ketchikan Chamber of Commerce. She detailed
that Hump Island Oyster Company continues to expand and noted
their involvement in aquatic-farm tourism as well.
She addressed mariculture's "Opportunities and Benefits:
Cultural," connects Alaskans with traditional food sources,
harvesting activities and skills; and "Opportunities and
Benefits: Food Security" for increasing access to local foods.
She referenced mariculture's "Opportunities & Benefits:
Industrial:"
• Compliments and expands existing $6 billion seafood
industry.
• Builds on assets:
o Vessels,
o Plants,
o Sustainable fisheries,
o Salmon hatcheries,
o Alaska seafood brand and Alaska Seafood Marketing
Institute (ASMI).
She summarized that mariculture is complementary to Alaska's
existing seafood industry. She noted that if Alaska were its own
country, the state would be the ninth largest seafood producer
in the world. She emphasized that mariculture is a natural
component and would build on the state's existing assets. She
added that ASMI created a "name brand" for the state's seafood.
She referenced "Opportunities & Benefits: Environmental" as
follows:
• Potential climate change mitigation and habitat
improvements through ecosystem services:
o Water filtration,
o Carbon,
o Nitrogen,
o Phosphorus removal.
3:36:28 PM
SAM RABUNG, Section Chief-Aquaculture Section, Division of
Commercial Fisheries, Alaska Department of Fish and Game,
Juneau, Alaska, [Note: Chair Birch previously mentioned that Mr.
Rabung is vice-chair of the Alaska Mariculture Task Force], said
mariculture's ecosystem services is a positive. He noted that
recent studies have shown that kelp and seaweed cultures can
help to mitigate ocean acidification, and oyster farms are
starting to integrate kelp or seaweed cultures. He added that
oysters have been touted for their use in cleaning polluted
waterways by removing nitrogen and phosphorus.
MS. DECKER referenced news stories from "Mariculture in the
World" as follows:
• Aqua-Spark seafood investment fund plans up to 10 new deals
by the end of 2018.
• Chinese companies to invest $200 million for scallop
growing in Russia.
• Taylor Shellfish eyes $100 million in sales by 2019, up
from $70 million in 2016.
She detailed that the $200 million Chinese development in
eastern Russia is just for three species: scallops, sea
cucumbers, and mussels. The three noted species are also in
Alaska.
She said Taylor Shellfish is the largest shellfish farming
company in the United States, based in Washington state. Taylor
Farms' projected growth from $70 million in sales to $100
million in sales is nearly a 50-percent growth over a 3-year
period. She opined that Taylor Shellfish shows that mariculture
in Alaska is something that the state can do, but a lot of steps
need to be put into place to make mariculture a reality.
3:38:24 PM
She referenced "Alaska Mariculture Task Force" as follows:
• Administrative Orders (AO):
o By request of industry leaders, Governor Walker
established the Alaska Mariculture Task Force (MTF) by
AO 280 in 2016 and extended it by AO 297 in 2018.
o AO 280 Directive:
square4 TO develop a comprehensive plan for a viable and
sustainable mariculture industry producing
shellfish and aquatic plants for the long-term
benefit of Alaska's economy, environment and
communities.
o AO 297 Directive:
square4 The Task Force shall serve as an advisory panel
to the governor and will work with the
appropriate state, federal, and tribal entities,
industry and other stakeholders to encourage and
support implementation of the plan. The Task
Force shall make recommendations to present to
the governor by May 1, 2021, along with a report
regarding progress toward the plan's goal to grow
a $100 million mariculture industry in 20 years.
MS. DECKER emphasized that involving the state through the task
force's effort is important.
She detailed the Mariculture Task Force's membership and
research practices as follows:
• 11 members:
o 2 members from state departments including Sam Rabung
from ADF&G and a representative from the Department of
Commerce, Community, and Economic Development.
o 5 advisory committees to provide additional input.
• Utilization of existing research that the state had done
including the Alaska Shellfish Farm Size Feasibility Study.
o Key finding was that new farms should really be medium
to large scale because small scale operations struggle
to be profitable.
3:40:51 PM
She explained that the task force commissioned two additional
economic analysis. She said the "phase one" study was a set of
case studies from other regions around world who were somewhat
like Alaska where six-key elements were found for successful
mariculture development as follows:
1. Pre-existing seafood industry.
2. Public acceptance and support.
3. Favorable growing areas.
4. Existing development plan with coordinated research
and development strategy.
5. Successful business plans and growing technology.
6. Workforce development.
She pointed out that Alaska has many of the noted key elements
and the task force felt it was on the right track. She admitted
that the state needs to work on "successful business plans and
growing technology" and "workforce development."
MS. DECKER said the McDowell Group was commissioned to do the
phase-2 economic analysis to provide a reasonable idea of
expectations over time of how the industry could develop given
market demand, existing industry, and prioritizing the six
species that were previously noted. She referenced the McDowell
Group's economic framework expectations as follows:
• Total economic output:
o $100 million in 20 years.
o $275 million in 30 years.
o $445 million in 40 years.
o $570 million in 50 years.
She said the McDowell Group focused the task force on the first
20 years because the time period was believed to be the most
predictable. She disclosed that the McDowell Group noted in
their plan that the first five years is going to be the most
important to getting on the trajectory of growth to hit the 20-
year target. She said the task force adopted the 20-year target
as its overall goal in the plan. She referenced the printed
version of the Alaska Mariculture's Development Plan to
committee members that breaks down projections by species as
well as the plan's important parts.
3:43:40 PM
She addressed the "Alaska Mariculture Development Plan: Vision
and Goal" as follows:
• Vision:
o Develop a viable and sustainable mariculture industry
producing shellfish and aquatic plants for the long-
term benefit of Alaska's economy, environment, and
communities.
• Goal:
o Grow a $100 million mariculture industry in 20 years.
She referenced the "guiding principles" in attaining the $100
million goal as follows:
• Scope:
o For the purpose of this plan, mariculture is defined
as enhancement, restoration, and farming of shellfish
(marine invertebrates) and seaweeds (macroalgae).
Finfish farming is not legal in Alaska waters.
• Coordination and Leadership:
o Effective implementation of this comprehensive plan
requires coordination and commitment of time and
resources from local, state, federal and tribal
governments, industry, communities, the University,
and other interested stakeholders.
• Sustainability:
o Development of mariculture will be compatible with
sustainability principles to maintain and improve
environmental integrity, as required by the Alaska
Constitution and ADF&G management practices.
• Alaska Native Participation:
o Mariculture development will benefit from the
involvement of Alaska Natives in every element of the
process.
• Innovation:
o Alaska presents many unique challenges, and developers
will look globally to applicable research and
solutions to apply to Alaska's circumstances and
geography.
• Compatibility:
o Implementation of this plan must protect existing
marine uses such as subsistence, commercial fishing,
and recreation; it will also utilize Alaska assets and
infrastructure.
3:44:50 PM
MS. DECKER addressed priority recommendations for the Alaska
Mariculture Development Plan as follows:
• Secure see supply through hatcheries.
• Pass state legislation to:
o Help fund hatcheries through the Mariculture Revolving
Loan Fund:
square4 Note: passed the Legislature in 2018.
o Allow shellfish enhancement:
square4 Note: SB 22.
• Establish the Alaska Mariculture Development Council:
o Note: The current "task force" is an intermediary step
until the industry can establish its own council.
• Establish a Mariculture Research Center at the University
of Alaska:
o Note: important to coordinate research so that it fits
within the industry priorities and needs and is not
duplicative.
• Fill key position to enable the growth of the industry:
o NOAA Aquaculture Coordinator in Alaska:
square4 Note: NOAA has created the position and is
currently in the process of filling the position.
o Alaska Sea Grant Mariculture Specialist:
square4 Note: position connects workforce development
efforts.
3:47:36 PM
MS. DECKER addressed "Mariculture: Latest Developments," two new
NOAA mariculture positions for policy and research will be added
in Alaska.
She said Congress introduced the "Marine Aquaculture Act" in
2018 and the act will be reintroduced in 2019. She noted that
the U.S. Secretary of Commerce was interested in aquaculture to
reduce the country's trade deficit. She said the act includes a
state opt-out provision for any type of aquaculture a state does
not want from its shores, a key provision that the Alaska
congressional delegation asked to be inserted.
She explained that the University of Alaska is adding a
mariculture research lead position in Kodiak that dovetails with
seaweed activity that is occurring in Kodiak.
She referenced "Mariculture: Latest Developments, Industry
Activity as follows:
• 400 percent increase in new farm lease applications to DNR:
o 2016: 4;
o 2017: 16;
o 2018: 18;
o 2019: Application period is open until April 30.
• 1,500 acres of new farms would provide approximately
$150,000 of new revenue to state in annual lease fees.
• Largest farm to date has been approved:
o Premium Aquatics received approval for 127-acre farm
site near Craig/Klawock.
• Medium-scale operations ($5 million to $10 million initial
investments) are forming.
• Alaska seafood processors are taking interest in process
and farming.
• Clusters of development emerging in multiple regions of the
state:
o Ketchikan;
o Prince William Sound (PWS);
o Homer;
o Kodiak;
o Aleutians under investigation.
• New interest by Community Development Quota (CDQ) Groups
and Alaska Native Corporations.
• Fishermen are interested in diversifying into seaweed
farming. She explained that seaweed farming fits nicely
with the seasonality of many fisheries because seaweed is
planted in the fall and harvested in the spring.
3:51:45 PM
MS. DECKER referenced "Mariculture: Latest Developments:
Demonstration Farm" as follows:
• OceansAlaska in Ketchikan permitted seaweed demonstration
farm to show the local community farming techniques for
growing, harvesting, and seeding seaweed.
• Collaboration with ASG, Metlakatla, POW and local schools.
She referenced "Mariculture: Latest Developments: Tourism" as
follows:
• Tourism partnership between Hump Island Oyster Company
(Ketchikan) and Princess Cruises.
She referenced "Mariculture: Latest Developments: Kodiak Seaweed
Cluster" as follows:
• Companies are getting involved in the processing of
seaweed:
o Blue Evolution;
o Ocean Beauty;
o Trident committed to processing.
• Six or seven seaweed farms are permitted.
• Some seaweed farmers are working cooperatively on a project
with the U.S. Department of Energy to look at how to grow
and harvest seaweed more efficiently to potential be used
as a biofuel.
She addressed "Mariculture: Latest Developments: New Food
Products" in the State of Alaska that includes kelp beer, kelp
salsa, kelp pickles, and kelp pasta. She said the recent
mariculture food products is, "Just the tip of the iceberg."
3:53:36 PM
MS. DECKER referenced "Mariculture: Latest Developments: Seaweed
Farming 101" for seaweed farming as follows:
• Learn to identify seaweed species (get a book).
• Find a site and determine which species are available
within 50 kilometers of the site (walk the beaches, take a
boat ride).
• Learn about Alaska Department of Natural Resources (DNR)
Aquatic Farm Program and Lease Application Process.
• Find a market, product form.
• Develop a business plan.
• Find seed supply (Blue Evolution, OceansAlaska).
• Consider layout/design of farm.
She addressed "Alaska King Crab Research Rehabilitation and
Biology (AKCRRAB): Rehabilitation of depressed king crab stocks
in Alaska" as follows:
• Focus:
o Red king crab in Kodiak,
o Blue king crab near Pribilof Islands.
• Activities since 2006:
o Hatching and rearing at Alutiiq Pride hatchery,
o Experimental releases near Kodiak (2 years),
o Planning releases near Pribilof Islands.
She noted that activity is halted until SB 22 is passed.
She referenced "Mariculture Development: Immediate Needs" as
follows:
• Secure source of seed.
• Reduce statutory, regulatory and policy hurdles.
• Reduce backlog of permit applications at DNR.
• SB 22 passage to allow for shellfish enhancement and
provide regulatory framework.
• Coordination across stakeholders through Mariculture Task
Force.
3:55:18 PM
SENATOR BISHOP asked if the task force has interfaced with other
countries or provinces that are already involved in mariculture.
MS. DECKER replied that during the planning process the task
force had looked at documents from New Zealand, Scotland,
British Columbia as well as U.S. states.
MR. RABUNG answered that ADF&G focused mainly in Alaska but
noted that the task force did utilize comprehensive plans and
interfaced with individuals from other countries and states.
SENATOR BISHOP commented that the state was going in the right
direction with mariculture, especially from a food security
standpoint for Alaska.
SENATOR KIEHL asked Ms. Decker to address the mariculture's
growth from $1 million to $100 million in 20 years. He asked if
the growth would be steady or would keystone moments occur with
leaps-and-bounds.
MS. DECKER replied that growth would not be constant. She opined
that growth would be slow in the beginning and then taking-off.
She surmised that one keystone moment would occur when there is
an example of the successful business in the medium-sized scale.
3:57:49 PM
MR. RABUNG remarked that achieving the goal will occur if the
current permits in the pipeline come to fruition.
SENATOR KAWASAKI called attention to the pink salmon fishery in
Valdez and noted recent studies that pink salmon might be
competing red and king salmon. He asked if there are rules that
would make it so that science and research is done for non-
natural competing with natural stock.
MR. RABUNG replied that there is no evidence of "outcompeting."
He remarked that "outcompeting" is speculative. He emphasized
that ADF&G is always cognizant of "outcompeting." He explained
that ADF&G's guiding statutes, regulations and policies,
including SB 22 should it pass, requires a priority of
sustainability of wild production. ADF&G applies genetics and
fish pathology policies. ADF&G has the sustainable fisheries
policy where its principle can be applied to any species. He
pointed out that shellfish fishery enhancement means local
stocks will be used where breeding is not allowed, and large
enough effective populations are used so there is no genetic
bottlenecking, something that ADF&G has done with salmon from
the beginning. He detailed that ADF&G starts at a very small
level as a precautionary approach for evaluation to make sure
there are not any unforeseen effects before the species can
grow. He noted that ADF&G's approach is required by the Alaska
Constitution and state statutes.
4:00:40 PM
CHAIR BIRCH asked what the "high bar" projections are for
mariculture regarding tax revenues, economic indicators, and job
creation.
MR. RABUNG replied that a "McDowell Group" analysis can be done
on aquatic farm programs to study input to the general fund from
annual fees for using state waters, economic generation from
selling aquatic farm products, and employment. He explained that
fishery enhancement, which SB 22 addresses, targets existing
common-property fisheries; for example, a larger harvestable
amount will occur from wild-capture fisheries or commercial
fisheries harvests that are subject to the same raw-fish tax,
fishery business tax, and all the different license and fees
that currently occur.
MS. DECKER explained that the task force did not perform a "high
bar" analysis at the $100 million market level. She said the
task force could provide additional analysis.
CHAIR BIRCH asked if the task force members could follow up with
a brief discussion about the permitting process. He asked if
permitting is working or are there areas for improvement. He
opined that permitting is a key piece for any business
operation.
4:02:40 PM
MR. RABUNG explained that a joint agency application is used for
aquatic farming so that ADF&G, DNR, and DEC all get the same
application. The permitting process starts with DNR going
through the leasing process where there is an agency review from
ADF&G, DEC, and federal agencies to make sure there is nothing
that will hold up and prohibit leasing a farm site. When ADF&G
looks at a permit, the department addresses what are the
existing traditional uses of an area. He pointed out that an
application area is a high-use, important-use, or other-use
area, then aquatic farming will have the lowest priority in the
department's regulations.
He explained that the next area that ADF&G looks at is the
potential impacts or negative effects on fish wildlife and
habitat to find out if harm will occur to natural wild stocks.
He said once a permit gets through the agency reviews, the DNR
leasing process proceeds to public notice for a public review
and comment period. He noted that a permit can have a public
hearing if the public requests one, afterwards the permit goes
to a lease adjudicator as a real estate transaction. Once the
lease is issued by DNR then ADF&G issues its permit.
MR. RABUNG said ADF&G's issues have been impacted by DNR's
downsizing due to budget cuts and there was not a lot of
activity in the area, but at the same time interest increased.
DNR has been struggling to keep up with the demand of the
leasing process. He noted that ADF&G can issue its permit within
30 days or less of a lease being issued because the department
has a review head start during the DNR's agency review.
He explained that DEC steps in when the "farm is in the water"
to certify the water and certify that the product is safe for
human health. He said all three agencies work together. He added
that there are federal permits required to have Army Corps of
Engineers permits because an aquatic farm is in navigable
waters, something that has created potential issues because a
general permit that encompassed all aquaculture was not renewed
because there was not much activity until recently. He detailed
that each farm must get an individual permit because there is no
general permit, resulting in the "marine mammals" program
looking at the individual permits. He pointed out that "marine
mammals" is starting to say they might require consultation
which can slow things down. He explained that there are a lot of
concern from the "marine mammals" people about interaction with
harbor seals in Southeast Alaska, for example.
4:06:24 PM
SENATOR COGHILL said he guessed permit submissions tend to be
near communities due to transportation. He asked if permits end
up around communities that crowd the communities. He addressed
SB 22 and asked if investors watching the progress of the bill
may ultimately "load up communities with comment."
MR. RABUNG replied that for aquatic farming, the closer to a
community or transportation hub the better; however, the closer
to a community the greater the potential for conflict with other
users, an issue that requires a balance between users. He noted
that ADF&G has maps that identifies no-go zones; for example,
harbor seal haul outs, seine troll drags, or popular personal
use dungeness crab fishing areas. He said mariculture farmers
must work hard to find the right fit, a reason why most farms to
date have been small. He explained that not a lot of large
operations are going to be close to large communities and the
benefit will be for rural coastal communities.
4:09:04 PM
MR. RABUNG noted that commercial king crab have been depressed
for 40 years and all the department can do to manage for
recovery is not allow fishing. He said SB 22 will allow for
another tool to bring back king crab. He noted that AKCRRAB is
stakeholder-driven and funded which is like the salmon hatchery
program. He emphasized that the AKCRRAB program will start
slowly and cautiously because there are a lot of unknowns. He
detailed that a bay will be chosen that has a depressed king
crab population, the broodstock with be collected from pregnant
females in a hatchery and protected until the larva turns into
juvenile crabs where the crabs are released where their parents
came from. He summarized that different models will be applied
to different species.
MS. DECKER addressed farm proximity to towns and noted a case in
Craig where a new farm worked with the community to locate close
enough where workers can daytrip to the facility and Craig
benefits from new jobs. She said farming projects will be
addressed on a case-by-case basis to find the balance for
communities in how close a farm location fits.
4:12:17 PM
SENATOR COGHILL asked what products have the highest demand.
MS. DECKER replied that oysters and seaweed have had the most
industry interest. She noted that king crab is high on the list
for international demand.
SENATOR REINBOLD emphasized she wants to make sure Alaska's wild
seafood is protected.
MR. RABUNG replied that ADF&G's primary directive is the
sustainability of wild stock and natural production. He pointed
out that the department is directed by statute, AS 16.05.092, to
supplement without doing harm to wild stock and natural
production; however, the department must first ensure
significant negative effect on natural productivity does not
happen.
CHAIR BIRCH noted a freshwater clam species in Interior Alaska
and inquired about possible farming. He asked what the
production cycle is for an oyster that is farmed.
4:16:58 PM
MR. RABUNG replied that ADF&G does not know a lot about
freshwater species and the clam Chair Birch referenced is not
exploitable.
MR. RABUNG revealed that the Pacific oyster is not indigenous to
Alaska and is the one species exemption for aquaculture,
everything else is indigenous to Alaska. He detailed times-to-
market for aquaculture as follows:
• Pacific oysters:
o 3-4 years.
• Kelp:
o Planted in the fall, harvested in the spring.
o Commercial fishing industry is interested because
infrastructure that is typically idle during the
winter can be used.
• Geoduck:
o 7-10 years.
• Sea cucumber:
o 3 years.
• Razor and littleneck clams:
o 3-4 years.
SENATOR KIEHL noted that kelp and oysters will be "proprietary"
whereas crab will be "common property." He asked if the other
species will be "proprietary" or "common property."
4:20:25 PM
MR. RABUNG replied that a farm project that maintains positive
control in captivity is private property. Fishery enhancement or
fisheries rehabilitation is common property that is owned by
anybody who can legally access fisheries, including:
subsistence, personal use, sport and commercial.
4:22:02 PM
CHAIR BIRCH recognized that Representative Ortiz was in
attendance.
4:22:25 PM
At ease.
SB 22-SHELLFISH ENHANCE. PROJECTS; HATCHERIES
4:23:44 PM
CHAIR BIRCH announced the consideration of Senate Bill 22 (SB
22).
4:24:01 PM
SENATOR GARY STEVENS, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 22, revealed that he worked at his family's
cannery in Kodiak from 1970-1975 where king crab and shrimp was
canned. His family's cannery was ultimately sold when, "things
fell apart" in the Kodiak fishery. He said Kodiak still has king
crab, but not of a commercial nature.
SENATOR STEVENS set forth that SB 22 would lend itself to
creating a commercial fishery as well as a personal-use fishery
which is very important in Kodiak. He said SB 22 is about
enhancing and restoring the state's shellfish industry and the
usage of shellfish by Alaskans, particularly for crabs and
clams. He added that the bill promotes the constitutional duty
of the "sustained yield principle" for the state's fisheries. He
said SB 22 establishes a framework to permit and monitor
improvements of the state's shellfish population.
He summarized that 40 years of no fishing in Kodiak is a shame
where a regime change occurred that went from crab to mostly
pollock. He said his hope is to go back to crab with a shellfish
enhancement project.
4:26:23 PM
TIM LAMKIN, Staff, Senator Stevens, Alaska State Legislature,
Juneau, Alaska, said he appreciated Chairman Birch's earlier
comments regarding the committee's goals of economic
diversification, building the state's portfolio and spurring
other economic development, goals that he believes SB 22 speaks
to.
He explained that SB 22 is the result of a lot of work by
stakeholders and the state's scientists and biologists. He noted
that the same legislation was introduced during the previous
session but did not make it.
He detailed that the state's fish industry is a multi-billion-
dollar industry that is the largest private employer in Alaska.
He noted that most of the wild crab fisheries have been dormant
and shutdown for quite some time for reasons that are not
entirely understood by the scientific community, but in part
might be for over harvesting. He opined that the state has not
provided any tools to fix the fisheries other than to simply
stop fishing. He said SB 22 will help try to bring a fix to the
table.
He explained that there has been an "environmental regime shift"
where crustaceans were once the oceans' dominant biomass and now
the finfish dominate. He detailed that the bill's intent is to
provide a legal framework where crabs can be raised in
hatcheries and released into the wild to provide a better shot
at growing to maturity for harvest. He said the policy addition
from SB 22 should have a positive effect on the state's economy,
science investment, fisheries-related jobs, and bolster the
constitution's principle of sustainable yield that will
ultimately show up on Alaskans' supper table.
4:29:51 PM
SENATOR KAWASAKI referenced the sponsor's statement for SB 22
and addressed the fifth paragraph as follows:
The bill creates a regulatory framework with which
Alaska Department of Fish & Game (ADF&G) can manage
shellfish enhancement projects and outlines criteria
for issuance of permits. It sets out stringent safety
standards to ensure sustainability and health of
existing natural stocks. The commissioner of ADF&G
must also make a determination of substantial public
benefit before a project can proceed.
He asked Mr. Lamkin to confirm that SB 22 sets out stringent
safety standards to ensure sustainability and health of existing
natural stocks.
MR. LAMKIN replied that SB 22 is closely modeled after existing
salmon hatchery permit language so in the spirit of it being
closely monitored in high standards of safety for those
hatcheries, they will likewise be applied for shellfish hatchery
projects.
SENATOR KAWASAKI readdressed the sponsor statement where the
fifth paragraph had stated, "The commissioner of ADF&G must also
make a determination of substantial public benefit before a
project can proceed." He asked what "substantial public benefit"
is defined as.
MR. LAMKIN replied that he did not have the definition memorized
but noted that the definition is either in statute or regulation
that is consistent with other preexisting statutory language
with salmon hatcheries which are applied to the shellfish
hatcheries.
CHAIR BIRCH asked Mr. Lamkim or ADF&G to address the bill's
fiscal note as it relates to commercial fishing as well as the
permitting process.
MR. LAMKIN replied that he will defer to ADF&G to address the
fiscal note for SB 22.
SENATOR GIESSEL asked that Mr. Lamkin provide a sectional
analysis for the bill.
MR. RAYBUNG explained that the fiscal note is indeterminate, but
if the fisheries grow there could be a fiscal impact if
additional staffing is required.
CHAIR BIRCH asked Mr. Lamkin to proceed with a sectional
analysis for SB 22.
4:33:08 PM
MR. LAMKIN referenced the sectional analysis for SB 22 as
follows:
Section 1:
Provides the Alaska Board of Fisheries authority to
direct the department to manage production of enhanced
shellfish stocks, beyond broodstock 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:
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 issuance of permits for private nonprofit
shellfish fishery enhancement projects 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 broodstock 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 a 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
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;
• 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.
Section 4:
Provides the Commercial Fisheries Entry Commission
(CFEC) authority to issue special harvest area entry
permits to holders of private nonprofit shellfish
rehabilitation, or enhancement project permits.
Section 5:
Defines legal fishing gear for special harvest area
entry permit holders.
Section 6:
Exempts shellfish raised in a private nonprofit
shellfish project from the farmed fish definition.
Sections 7-8:
Establish 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 section 2.
Section 11:
Authorizes the Department of Fish and Game to adopt
implementing regulations.
Section 12:
Establishes an immediate effective date for section 11
pursuant to AS 01.10.070(c).
Section 13:
Establishes an effective date for section 8
concomitant with section 2, Chapter 55, SLA 2013.
4:39:50 PM
SENATOR COGHILL addressed AS 16.12.070 in section 3 regarding
taking broodstock "where feasible." He asked Mr. Lamkin to
elaborate on taking approved broodstock "where feasible."
MR. LAMKIN answered that his understanding is the broodstock is
delicate and to the extent possible, practical, or feasible,
broodstock will be taken from the first selected location to
maximize quality. If the first choice is not available or
feasible, the appropriate next steps will be taken. He asked
that ADF&G confirm his previous assessment.
SENATOR COGHILL replied that ADF&G can corroborate later. He
said there have been discussions on how to keep the integrity of
local broodstocks. He said the concern moving forward is, "Where
the exception becomes the rule."
4:41:50 PM
CHAIR BIRCH [opened invited and public testimony].
4:42:22 PM
TOMI MARSH, President, Oceans Alaska, Ketchikan, Alaska,
testified in support of SB 22. She explained that Oceans Alaska
is a nonprofit shellfish hatchery located in Ketchikan.
We believe mariculture is important for economic
diversification, existing businesses, education, and
fisheries. SB 22 helps create the regulatory framework
for which ADF&G can manage shellfish fishery
enhancement, restoration, and shellfish hatcheries;
this will allow interested stakeholders to either
continue or begin enhancement and or restoration of
certain species.
At Oceans Alaska we support SB 22 as it will diversify
economic development and increase environmental
stewardship through enhancement of traditional and
economically important commercially harvested
shellfish species such sea cumbers and geoducks which
have been impacted by sea otter predation; two,
enhance a shellfish species as integral to marine
ecosystems and habitat restoration; three, enhancement
of shellfish species that are vital to climate change
and pollution mitigation.
4:43:48 PM
CHAIR BIRCH announced that he "officially" opened public
testimony.
4:44:09 PM
JEFF HETRICK, Director, Alutiiq Pride Shellfish Hatchery,
Seward, Alaska, testified in support of SB 22. He explained that
Alutiiq is the institute that has been doing most of the work
towards shellfish enhancement for almost 20 years. He summarized
that Alutiiq worked on the following projects and species:
• Littleneck and butter clam's enhancement;
• Cockle projects;
• Red and blue king crab research;
• Worked with NOAA and AKCRRAB on king crab enhancement;
• Sea cucumber project with the Southeast Alaska Regional
Dive Fisheries Association (SARDFA) to test the feasibility
for large-scale enhancement;
• Abalone;
• Purple hinge rock scallops.
MR. HETRICK specified that Alutiiq's programs have been done
under a commissioner's permit or a research permit through
ADF&G.
He noted an earlier question by a committee member regarding
working with other regions and countries. He disclosed that
Alutiiq has been, "Sitting on this technology now for quite some
time and they look to us for advice and direction trying to
raise some of these species."
He disclosed that Alutiiq is in the final year of doing its out-
stock and experiments of Kodiak. Alutiiq has developed hatchery
technology and is currently working on out-stocking in terms of
size of release, location, density, and all the things that
scientists look for to maximize survival once stock is released.
He said Alutiiq believes they are at the point to do a large-
scale release of 500,000 crabs. He noted that a large-scale
release is needed to find out if king crab enhancement is going
to work.
He summarized that Alutiiq's primary focus is to bring back the
depressed stocks and is standing by for the approval of SB 22.
4:47:29 PM
TREVOR SANDE, member, Alaska Fisheries Development Foundation,
Ketchikan, Alaska, testified in support of SB 22. He disclosed
that he has operated an oyster farm for eight years. He
explained that hatcheries are learning how to adapt to changing
pH levels in the ocean. He opined that mariculture enhancement
will be a tool when ocean acidification impacts Alaska's wild
stock.
4:49:04 PM
STEVE RICCI, Staff, Aleutian Pribilof Island Community
Development Association (APICDA), Juneau, Alaska, testified in
support of SB 22. He referenced his support letter, paraphrased
as follows:
APICDA is one of six Community Development Quota (CDQ)
organizations created in 1992 by the Magnuson-Stevens
Act. Our mission is to increase direct participation
in the Bering Sea an Aleutian Islands fisheries for
our members and to develop fisheries related economic
opportunities in our communities.
The CDQ program utilizes fisheries resources to create
jobs, build infrastructure, and provide scholarships
and workforce development training. The CDQ program
has generated critically important and sustainable
economic opportunities to 65 coastal communities for
over 25 years and help leverage private sector dollars
through partnerships and investments.
We see tremendous opportunity in mariculture in
western Alaska. Business and revenue generation are
part of a larger picture. Potential increases to
subsistence fisheries, workforce development, and
furthering research efforts to better understand the
impacts of climatic related ocean changes are all
potential long-run benefits.
APICDA is a member organization of the [Alaska
Fisheries Development Foundation, Inc.] (AFDF), which
spearheaded the mariculture initiative. We have also
been involved in the AKCRRAB program which researches
the rehabilitation of king crab stocks. SB 22 will
fill a current gap that exists for permitting and
regulating restoration efforts such as the AKCRRAB
program and will provide a very important framework
for future enhancement efforts. We believe that SB 22
is consistent with the objectives of the Alaska
Mariculture Initiative and we fully support the bill.
4:51:37 PM
TOMMY SHERIDAN, Director of Government Affairs, Silver Bay
Seafoods, LLC, Cordova, Alaska, testified in support of SB 22.
He referenced his letter of support, paraphrased as follows:
Silver Bay Seafoods began in 2007 as a single salmon
processing facility in Sitka, Alaska and has since
grown into one of the largest seafood companies in the
state, currently operating large scale processing
facilities in Sitka, Craig, Valdez, and Naknek. The
company is also active in the California squid fishery
and is currently constructing a seafood processing
facility in False Pass where we will process salmon,
pollock, and cod. We also hope to expand into Kodiak
in the future as well. Silver Bay has aspirations for
developing production-scale mariculture operations in
Sitka Sound which at full production would yield up to
20 million Pacific oysters per year, bringing year-
round employment to the area along with the production
of an environmentally friendly, sustainable, and
healthy food source for sale and distribution both
locally and worldwide.
SB 22 creates a regulatory framework for the effective
management of shellfish fishery enhancement, shellfish
restoration activities, and shellfish hatcheries. Seed
security for such operations has been identified as an
impediment to mariculture development in Alaska and it
certainly has been a consideration in the development
of our own program. This act will allow interested
stakeholders to either begin or continue with the
enhancement and or restoration of species such as king
crab, sea cucumber, geoduck, abalone, or razor clams,
thereby supporting shellfish hatchery development in
the state.
4:54:01 PM
NANCY HILLSTRAND, Shareholder, Pioneer Alaskan Fisheries, Inc.,
Homer, Alaska, testified in opposition of SB 22. She detailed
that Pioneer Alaskan Fisheries has been a corporation in Alaska
since 1964, primarily crab fishermen in addition to salmon,
herring, and seafood processing.
She explained that she is concerned with SB 22 based upon what
she has seen with legislation that has been used for salmon
hatcheries. She noted that she submitted to the committee an
ADF&G review regarding the potential for the legislation to
devolve into a problem for wild stocks as well as the wild stock
fishermen.
She asserted that AKCRRAB needs to take a step-by-step approach
for research rather than opening wide open to the large-scale
industrial activities that will happen with SB 22. She contended
that ADF&G does not have the money to adequately monitor and
provide oversight. She opined that ADF&G should have additional
funds to do a good job or not do the project at all.
She pointed out that some wild stocks are rebounding and noted
that a similar situation occurred with salmon wild stocks were
naturally coming back when hatcheries were coming on.
She asked if the program has an on-off switch and noted that an
on-off switch with salmon hatcheries is not used. She disclosed
that king crab was released in the Barents Sea and the crab
became an invasive species that impacted its cod fishery. She
asked that a feasibility study, cost analysis, and risk
assessment be done ahead of time.
CHAIR BIRCH confirmed that Ms. Hillstrand had submitted a 2009
ADF&G review to the committee.
5:00:31 PM
MARCOS SCHEER, Second Vice President, Southeast Conference,
Juneau, Alaska, testified in support of SB 22. He disclosed that
he is the founder and CEO of Premium Aquatics which is an
aquatics farming company. He added that he has served on the
board as well as being a member for Alaska Fisheries Development
Foundation since 2007.
He explained that Southeast Conference is a state and federally
funded designated regional economic development organization for
southeast Alaska. He continued as follows:
For more than 60 years, Southeast Conference has
served as a collective voice in advancing the
southeast region's economy. Southeast Conference has
over 200 members from organizations representing
business and governments from 32 regional communities.
My company is also a member of Southeast Conference.
The mission of Southeast Conference is to undertake
and support activities that promote strong economies,
healthy communities, and quality environment in
southeast Alaska.
He set forth that SB 22 is important to the communities and user
groups in southeast Alaska that might be advantaged by the
legislation, particularly for the rehabilitation of the stocks
that have been decimated by sea otter predation.
5:02:49 PM
JULIE DECKER, Executive Director, Alaska Fisheries Development
Foundation, Inc. (AFDF), Wrangell, Alaska, testified in support
of SB 22. She noted in her previous presentation that she failed
to mention that AFDF partakes in facilitating seafood
sustainability certification in some of Alaska's fisheries. She
explained that Alaska's major fisheries are certified as
sustainably managed by two international standards via two
different programs: The Marine Stewardship Council, and the
Alaska Responsible Fisheries Management Program. She said the
reason why AFDF seeks certification is because ADF&G puts a
priority on wild stocks and uses a precautionary approach to
managing Alaska's fisheries. She disclosed that the noted
language is included in SB 22 and AFDF expects the same would
happen moving forward with shellfish enhancement.
5:04:11 PM
SENATOR KIEHL noted that SB 22 does not address seaweed, a
subject that Ms. Decker addressed in her previous presentation.
He asked if ADF&G looks at seaweed seed producers elsewhere and
how seaweed is addressed.
MS. DECKER explained that there is no commercial fishery in the
state for seaweed, therefore a fisheries enhancement is not
eligible for seaweed. She specified that when seaweed is
addressed as a mariculture development species, seaweed is
expressed only in the aquatic farming realm.
SENATOR KAWASAKI asked where in the bill does it have
protections for "existing" or "natural" stocks. He referenced
the pink salmon issue where studies talk about the possible
impact on red and king salmon stocks in Prince William Sound.
MS. DECKER replied that ADF&G would be best suited to answer
Senator Kawasaki's question. She noted that ADF&G has strict
policies around genetics, marking, disease, and where to site
enhancement activities in order to reduce conflicts. She said
some of ADF&G's policies are embedded and do help with a
precautionary approach.
5:06:49 PM
JERRY MACCUNE, President, Cordova District, Fishermen United,
Cordova, Alaska, testified in support of SB 22. He revealed that
Cordova was once known as the "clam capital of the world." He
noted that the legislation does not involve a "full blown"
hatchery for all the shellfish. He specified that the intent is
to boost the stock in some places to see if it will take root.
He said in reference to pink salmon, he disclosed that a multi-
million-dollar study being paid for by the processors and
hatcheries will be completed within two years. He explained that
the study will address the interaction between wild stocks and
pink salmon. He emphasized that there is no direct evidence at
this time that pink salmon are impacting red or king salmon. He
opined that SB 22 is a great opportunity. He noted that seaweed
is taking off in the world and will be productive for a lot of
people in Alaska.
5:08:30 PM
CHAIR BIRCH closed public testimony.
5:08:33 PM
CHAIR BIRCH held SB 22 in committee.
5:08:58 PM
There being no further business to come before the committee,
Chair Birch adjourned the Senate Resources Committee meeting at
5:08 p.m.