HB 253-FISHERIES ENHANCEMENT LOAN PROGRAM  10:32:23 AM CHAIR STUTES announced that the next order of business would be HOUSE BILL NO. 253, "An Act relating to the fisheries enhancement loan program; and providing for an effective date." 10:32:53 AM REPRESENTATIVE JEREMY BYNUM, Alaska State Legislature, as prime sponsor, introduced HB 253 to the House Special Committee on Fisheries. He noted that HB 253 pertains to the Fisheries Enhancement Loan Program and it has long played a vital role in sustaining commercial, sport, and subsistence related fisheries in Alaska by providing critical access to capital. He noted that this capital supports infrastructure improvements that strengthen both fish stocks and coastal economies. He explained that under current law, loan eligibility is limited to qualified regional associations and approved nonprofit corporations. He said that HB 253 would extend eligibility to include federally recognized tribal organizations that operate fish hatcheries. He said that the proposed legislation would make a few conforming changes to the authority of the commissioner to include the eligibility for tribal organizations and maintain the existing loan caps. He noted that by incorporating federally recognized tribal organizations in the Fisheries Enhancement Loan Program, it would strengthen collaboration and reinforce the long-term sustainability of fisheries in Alaska. 10:35:42 AM TREVOR SHAW, Staff, Representative Jeremy Bynum, Alaska State Legislature, on behalf of prime sponsor, Representative Jeremy Bynum, gave an overview of the Fisheries Enhancement Loan Program and read the sectional analysis to HB 253. He explained that the program was established in 1976 and prior to 1981, loans were presold to the Department of Revenue for funding. He said that in 1981, the fisheries revolving loan fund became an official fund. He said that loans are available for planning, construction, and operations of a fish hatchery facility. He said that loans can also support pre-construction operations necessary to obtain a permit. He explained that the maximum loan amount is $10 million with a maximum loan term of 30 years; the first 6-10 years of the loan do not accrue interest. Noted that in recent fiscal years (FYs), from FY21 to FY25 there was a total of $22,108,000 in loans issued He said that in FY21, the fund was the largest of the five years with loan totals at $10.8 million and FY22 was the smallest with only $1.6 million in loans issued. He said that of the 13 loans over the last fiscal years, the average amount was $1.7 million dollars. MR. SHAW noted that HB 253 would amend AS 16.10.500 which relates to the declaration of policy for the Fisheries Enhancement Loan Program. MR. SHAW proceeded to read the sectional analysis to HB 253 [original punctuation provided]: Section 1. Amends AS 16.10.500 relating to the declaration of policy for the fisheries enhancement loan program. This section updates and clarifies the state's policy governing the fisheries enhancement loan program. The section expands loan eligibility to include federally recognized tribal organizations that operate fish hatcheries on an Indian reservation or under a federal permit, in addition to qualified regional associations. Section 2. Amends AS 16.10.510 relating to the powers and duties of the commissioner. This section updates the commissioner's authority under the fisheries enhancement loan program to explicitly include eligible tribal organizations alongside qualified regional associations and approved local nonprofit corporations. Conforming changes ensure tribal organizations are treated consistently throughout the statute, while retaining existing provisions. Section 3. Amends AS 16.10.520(a) relating to loan limits. This section updates the loan limit provisions of the fisheries enhancement loan program to reflect the inclusion of eligible tribal organizations as borrowers. The section further clarifies that loans for other nonprofit hatchery corporation or tribal organization projects remain capped at $1,000,000. Section 4. Establishes an effective date of July 1, 2026. 10:38:45 AM REPRESENTATIVE BYNUM thanked the committee, staff, and department for addressing some of the prior concerns with the bill and the opportunity to collaborate on it. He said that there were initial concerns bringing the idea forward but noted that work has been done to address some of the concerns. Specifically, one concern had to do with loans issued to tribal organizations that there may not be a requirement that they would participate in fish tracking requirements like others. He said that working with his districts communities and after consultation, they are willing and wanting to work alongside other industry partners. He said that there would be a committee substitute (CS) that would address this concern in law. He noted that another concern was collateral on a loan. He noted that legislative legal services and others were consulted and there were already guardrails in place. 10:41:37 AM REPRESENTATIVE KOPP believed there may have been litigation between the Metlakatla Tribe and the State of Alaska (SOA) that went to federal court. He said that this pertained to jurisdiction of fisheries and the waters off the reservation, and whether fish stocks were tribal or were publicly accessible state fish. He said that he was unsure of the outcome of the court case. He wanted to ensure that using state money for a tribal hatchery operation would allow the public to access those fish stocks in state waters. He noted that there was significant litigation in the courts regarding this issue. REPRESENTATIVE BYNUM responded that he did not believe that this issue was specifically related to the proposed bill, but he would follow up with the committee. He understood that there is a permitting program with the tribe that allows fishing accessibility. 10:44:17 AM DOUG VINCENT-LANG, Commissioner, Department of Fish & Game, answered committee questions pertaining to HB 253. Commented that there is an ongoing lawsuit with the Metlakatla Tribe centered around whether the tribe has traditional fishing rights outside of their reservation. He noted that they were asking to fish a few districts around the reserve without needing a Commercial Fisheries Entry Commission (CFEC) permit. He said that the litigation was heard once at a Federal District Court and was elevated to an Appellate Court with later return to a District Court where the case continues deliberations. He said that his understanding with the proposed bill is that if the tribe received state money, the fish would become common property resources outside of the reservation. Furthermore, any funds used to produce fish would be done under the state permitting system. He said that the state needs to ascertain how many fish go out and what the composition would be, as this ties into treaty agreements. He noted that certain procedures would need to be followed. 10:45:55 AM REPRESENTATIVE KOPP asked how far from the shoreline does the reservation go into navigable waters. COMMISSIONER VINCENT-LANG responded that he read the lawsuit about two weeks ago and he could not recall. He thought it was around one or two miles. 10:46:33 AM REPRESENTATIVE HIMSCHOOT said that the memo talks about not being able to collateralize unless tribal immunity is waived, she asked whether this was addressed in the proposed bill. REPRESENATIVE BYNUM responded that initially it was thought that the bill needed an amendment to address this issue. However, he said that there is no amendment necessary to ensure that this legal requirement occurs. He said that the memo points directly to statute with what requirements are in place for the loan. The memo also highlights specific information on the Metlakatla requirements when accepting a loan regarding immunity. REPRESENTATIVE HIMSCHOOT asked whether this could be done in regulation rather than being a part of the proposed regulation. REPRESENATIVE BYNUM responded that this is correct. 10:48:07 AM CHAIR STUTES announced that the committee would hear invited testimony. 10:48:28 AM ALBERT SMITH, Mayor, answered questions and gave invited testimony in support of HB 253. He asked whether there were questions in which he could answer. REPRESENTATIVE KOPP asked Mr. Smith how far from the shoreline the reservation extends and how it pertains to tribal control of the fisheries. MR. SMITH noted that the reservation had its own Metlakatla Indian Community Fish & Wildlife Department and it was a hardworking and outstanding group. He said that the reserve shares a lot of their information with the state, including tagging reports and marking fish. He said that the community currently has 25 million chum salmon fry that are 100 percent marked. MR. SMITH responded that tribal waters extend 3000 feet from the low water mark, which equates to just over a half mile. 10:50:47 AM MR. SMITH proceeded with his invited testimony and noted that he was excited about the proposed bill. He said that it is something that the tribe has been working on for some time. He said that four years ago the tribe worked with Jim Anderson and details had been "ironed out" regarding collateral, payments, and other mechanisms. He said that the tribal hatchery was built around the same timeframe that the loan program had started and currently much of the hatchery infrastructure on the reservation is aging. He noted that Metlakatla was part of the only reserve in Alaska and contained a federally recognized fishery and hatchery. He said that in the last ten years, the tribe has worked on modernizing and expanding. He understood that the fish that get released migrate like all salmon. He said that what is good for Metlakatla is good for the region, and what is good for the region is good for the state. He understood that many coho salmon that originate from Metlakatla are caught in coastal waters, including near Sitka before they return inland. He said that the tribe is all for being good partners to the region and would love to Southeast and the rest of Alaska thrive. He said that the proposed bill could help with this. MR. SMITH had also noted that he heard Commissioner Vincent-Lang discussed needing a hatchery permit. He said that the bill to his knowledge would help with this process. He said that this was a hangup with previous discussions. He said that Metlakatla is a federally recognized and sovereign nation. He noted that Metlakatla was currently doing coded wire tags for Chinook, and coho at the same level as the state. He noted that chum salmon were marked slightly differently than other salmon varieties and was done by changing water temperatures to create otolith marks. He said that the bottom line is that in the last years, the tribe has appropriately marked fish and follows the same regulations as the state. He said that the tribe also participates in the Pacific Salmon Treaty meetings and were following Chinook salmon procedures. 10:56:41 AM REPRESENTATIVE HIMSCHOOT asked whether other tribes in Southeast Alaska support the proposed legislation. MR. SMITH responded that he recommends that she check with the other tribes since he cannot speak for them and has not asked. 10:57:21 AM REPRESENTATIVE BYNUM said that his office did some research and outreach with other tribes and he has not received any negative feedback regarding the proposed legislation. He noted that he would continue outreach efforts and share any insights with the committee. 10:57:48 AM REPRESENTATIVE VANCE asked for clarification regarding a sponsor substitute or any changes to the proposed bill. REPRESENATIVE BYNUM responded that there would be a change made to specifically address bill language to align with requirements for marking fish and ensuring compliance. He said that the current bill currently does not have this conforming language. REPRESENTATIVE VANCE said that the bill looks prescriptive to Metlakatla, she asked what potential is for other federally recognized tribes. She asked why it was prescriptive rather than permissive. REPRESENATIVE BYNUM responded that the bill should be identifying an Indian reservation and/or a Federally Recognized Tribe. 10:59:30 AM MR. SHAW added that the wording in the bill talks about an Indian reservation or operating with a federal permit. He said that any additional tribal organizations in the future that obtain a federal or state permit. He said that a future Committee Substitute could provide a provision that any tribal organization could meet criteria for an Alaska Department of Fish & Game (ADF&G) under state statute. He said that the bill was written this way because there are provisions in federal law that allow Metlakatla to operate their own hatchery without even technically needing a federal permit. He said that the proposed bill was written to be broad. REPRESENTATIVE VANCE said that this is about the loan program, and she knows that with it being a tribe, they can access loans that other Alaska organizations cannot since they are a federally recognized tribe. She asked if he could describe the need for why the bill was brought forward. 11:01:35 AM REPRESENATIVE BYNUM responded that the proposed bill was brought forward was so that it could be ensured that the Metlakatla Indian Community has the same equal access that other Alaskans have. 11:02:36 AM CHAIR STUTES noted that an amendment deadline would be set once a Committee Substitute was heard. 11:02:57 AM The committee took a brief at ease. 11:03:14 AM CHAIR STUTES closed invited testimony to HB 253.