HB 300-FISH/SHELLFISH HATCHERY/ENHANCE. PROJECTS  10:33:35 AM CHAIR STUTES announced that the final order of business would be HOUSE BILL NO. 300, "An Act relating to management of enhanced stocks of fish; authorizing the operation of nonprofit shellfish hatcheries; relating to application fees for salmon and shellfish hatchery permits; and providing for an effective date." 10:34:19 AM REPRESENTATIVE FOSTER moved to adopt the proposed committee substitute (CS) for HB 300, Version 29-GH2653\W, Bullard, 3/21/16, as the working document. CHAIR STUTES objected for discussion. 10:35:30 AM SAM COTTEN, Commissioner, Alaska Department of Fish & Game (ADF&G), introduced HB 300, and said it allows the department to issue permits for shellfish enhancement and for rehabilitation projects, as well as for the construction and operation of shellfish hatcheries by non-profit corporations for the same purpose. The goal to help improve the state's economy and provide a method to increase the available harvest of shellfish. For further details addressing the recommended changes to the original bill, he deferred comment. 10:37:20 AM FOREST BOWERS, Deputy Director, Division of Commercial Fisheries, Alaska Department of Fish & Game (ADF&G), said HB 300 caused a number of questions due to a need to standardize the text of the bill and reflect a unified syntax. The general public experienced confusion due to the inclusion of terminology which the department considered routine. Additionally, strong public interest was evident regarding shellfish enhancement and the rehabilitation of shellfish fisheries. After incorporating the public feedback, the bill required a title change. Also, a paragraph was added to prohibit permit holders from procuring or placing genetically modified shellfish into state waters. Specifications for brood stock sourcing was included and a series of definitions were added. Finally, an immunity of liability clause was inserted, and a provision for donation of shellfish to a food bank was removed. 10:40:13 AM CHAIR STUTES removed her objection, and without further objection, Version W was before the committee. 10:40:19 AM MR. BOWERS referred to the committee packet, to paraphrase from the document titled, "Sectional Analysis, HB 300, Version W, Shellfish Stock Rehabilitation and Fishery Enhancement Projects, March 23, 2016," which read as follows: Sec. 1  Provides the Alaska Board of Fisheries authority to direct the department to manage production of enhanced shellfish stocks, beyond brood stock needs, for cost recovery harvest. Sec. 2  Increases the permit application fee for new private nonprofit salmon hatcheries from $100 to $1,000. Sec. 3  Adds a new Chapter 12 to Title 16, "Shellfish Stock Rehabilitation Efforts, Enhancement Projects, and Hatcheries. Provides direction to the commissioner on issuance of permits for private nonprofit shellfish stock rehabilitation and fishery enhancement projects and associated shellfish hatcheries 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. This section provides for a hearing prior to issuance of a permit and describes certain permit terms including cost recovery fisheries, harvest, sale, and release of hatchery-produced shellfish, and selection of brood stock sources. This section describes reporting requirements and terms for modification or revocation of a permit. Sec. 4 Provides the Commercial Fisheries Entry Commission authority to issue special harvest area entry permits to holders of private nonprofit shellfish rehabilitation, enhancement or hatchery permits. Sec. 5 Defines legal fishing gear for special harvest area entry permit holders. Sec. 6 Exempts shellfish raised in a private nonprofit shellfish project from the farmed fish definition. Sec. 7 and 8 Establish tax exemption for a nonprofit corporation holding a shellfish hatchery, rehabilitation, or enhancement permit. Sec. 9 Exempts shellfish harvested under a special harvest area entry permit from certain taxes. Sec. 10 Establishes an effective date of the fee for salmon hatchery permits described in sec. 2. Sectional Analysis, HB 300 - 2 - April 4, 2016 Sec. 11 Authorizes the department to adopt implementing regulations. Sec. 12 Establishes an immediate effective date for sec. 12 pursuant to AS 01.10.070(c). Sec. 13 Establishes an effective date for sec. 9 concomitant with sec. 2 effective date. 10:43:41 AM MR. BOWERS added that the bill was structured after the existing statutes governing salmon, private, non-profit, programs to utilize applicable elements. 10:44:10 AM CHAIR STUTES opened public testimony. 10:44:33 AM HEATHER MCCARTY, Spokesperson, Central Bering Sea Fishermen's Association, stated support for HB 300, and said the crab fishery has not undergone a stock resurgence, and enhancement appears to be the best means to bring the industry back. The technology exists, and many committee and public members support an enhancement approach. 10:49:17 AM JULIE DECKER, Executive Director, Alaska Fisheries Development Foundation, stated support for HB 300, paraphrasing from a prepared statement, which read as follows [original punctuation provided]: The Alaska Fisheries Development Foundation (AFDF) would like to express support for HB 300. AFDF recognizes that HB 300 is part of a larger effort to develop mariculture in Alaska. AFDF's membership is comprised of seafood harvesters, seafood processors, and support sector businesses. Since 1978, AFDF's mission has been to identify problems and opportunities that are common across Alaska's seafood industry and to help develop solutions utilizing applied research and development which balance economic benefits with sustainability principles. One of AFDF's recent projects is to spearhead the Alaska Mariculture Initiative, which is meant to expedite the development of mariculture in Alaska with the vision to grow a $1 billion industry in 30 years. Governor Walker's recent Administrative Order #280 establishes the Alaska Mariculture Task Force and is also part of this larger effort to develop mariculture. The purpose of the Task Force is to provide recommendations for a comprehensive plan to develop a viable and sustainable mariculture industry producing shellfish and aquatic plants for the long and communities. HB 300 plays an important role in the development of mariculture in Alaska. HB 300 creates a regulatory framework with which ADF&G can manage shellfish fishery enhancement, restoration and hatcheries, in a similar fashion as the current management of salmon fishery enhancement and hatcheries. This would allow interested stakeholders to either continue or begin enhancement and/or restoration of species such as King crab, sea cucumber, geoduck, abalone, or razor clams. I would like to briefly address concerns of negative impacts to wild shellfish from hatchery shellfish. As a Client for the Alaska Responsible Fisheries Management (RFM) sustainability certification program, AFDF has a unique position and viewpoint on this issue. On one hand, AFDF hears concerns from industry that ADF&G's fishery enhancement policies are too restrictive, increase cost, and slow progress. On the other hand, AFDF is also in the position of facilitating a review of ADF&G's fishery enhancement policies by independent third determine whether they follow internationally accepted standards for sustainably managed fisheries. Alaska salmon maintains RFM certification, because of ADF&G's policies which are designed around a precautionary approach that prioritizes wild fish and minimizes adverse impacts to wild stocks. Following is a list of some of ADF&G's enhancement policies: genetics, disease, pathology, siting of hatcheries, fish culturing techniques, release strategies, harvest, habitat, marking, transportation, planning, and reporting. Given these extensive policies, AFDF and independent third is fulfilling its constitutional mandate to manage our fishery resources for sustainability. Finally, I understand that a committee substitute (CS) will be introduced at Thursday's meeting that mirrors the latest version of the companion bill (SB 172) which was passed out of Senate Resources Committee. This is our preferred version with changes that improve the clarity and intent of the bill. AFDF supports this CS of HB 300 and appreciates the Administration's proactive role in introducing the legislation. 10:53:13 AM NANCY HILLSTRAND, Pioneer Alaskan Fisheries, stated opposition to HB 300, and said the governance of shellfish needs to be independent of the statutes that were written for salmon. Legislation needs to address shellfish specifically. She pointed out that a species of king crab was released into the Bering Sea and is now considered invasive. 10:57:07 AM GINNY ECKERT, PhD, Professor, University of Alaska Fairbanks (UAF), stated support for HB 300, and paraphrased from a prepared statement, which read as follows [original punctuation provided]: The Steering Committee of the Alaska King Crab Research, Rehabilitation and Biology (AKCRRAB) program would like to express appreciation and support for House Bill 300, version W. The AKCRRAB program is a coalition of university, federal and stakeholder groups, formed in 2006 with the goals of adding to the scientific understanding of crab life history and ecology, as well as the eventual rehabilitation of depressed king crab stocks in Alaska. AKCRRAB is developing scientifically sound strategies for hatching, rearing and out planting king crab in Alaska, in order to help restore populations to self-sustainable levels. In phase one, from 2006 to 2011, AKCRRAB researchers made significant accomplishments in developing and improving methods of hatchery rearing of larval and juvenile king crab from wild-caught brood stock, to the point where large-scale production is feasible. Parallel field and laboratory studies of crab ecology and population genetics were also conducted during this time. In the second and current phase, hatchery studies have been complemented by studies essential to understanding optimal release strategies, appropriate habitat, and potential impact on existing ecosystems. This research is providing the science necessary for informing the responsible release of hatchery-reared animals. Increased knowledge will allow scientists and managers to assess the feasibility of ecologically sound rehabilitation of depressed stocks, with potentially substantial benefits to Alaska. In the third and final phase, AKCRRAB intends to evolve from the current, research-oriented coalition, to a formal entity focused on transitioning hatchery techniques and out planting technologies to communities and industry as part of statewide efforts to help rehabilitate depleted king crab stocks. As phase three develops, the program will require support and guidance from the State of Alaska, as the transition from feasibility to implementation will need to be guided with a new regulatory structure. House Bill 300, as aligned with the recent Senate Resources Committee Substitute for Senate Bill 172, is a response to the need for new regulations for shellfish culture. The AKCRRAB Steering Committee is pleased that the Administration and the Legislature are addressing this need. In a preliminary review of the proposed legislation, the original version of Senate Bill 172, we identified several areas of concern for AKCRRAB program participants. We were pleased that our concerns, and those of others, were addressed in the Committee Substitute. We intend to participate fully in further discussions and hearings on this important legislation. The AKCRRAB Steering Committee stands ready to interact with Committee members and staff as needed. Please let us know how we can be of help. 10:59:49 AM CHRIS MIERZEJEK, Director of Administration, Community Development Quota (CDQ), stated support for HB 300 and opined that it could generate economic opportunities throughout the western coastal areas of Alaska. CHAIR STUTES closed public testimony. 11:01:34 AM REPRESENTATIVE ORTIZ asked about sea otter management and whether reducing populations would have a positive impact. 11:02:51 AM MR. BOWERS responded that sea otters are limiting shell fish production in some areas of the state. However, the areas impacted by the sea otter may be good rehabilitation locations, especially if the otters have moved to other areas. Certainly abalone would be a good species for rehabilitation, he opined. REPRESENTATIVE ORTIZ said when speaking about restoration versus rehabilitation, what are the differences. MR. BOWERS explained scenarios for both approaches: Stock rehabilitation and fisheries enhancement are what the department practices, and restoration is not the agencies purview. Rehabilitation is when a native species have been extirpated, or nearly so, and the effort is to rebuild a species to natural production levels. Enhancement relates to boosting production of fisheries above natural levels for additional yield, in the common property fishery. The majority of the projects in the area of salmon are for enhancement purposes, he finished. 11:06:00 AM REPRESENTATIVE FOSTER moved to report the proposed CS for HB 300, Version 29-GH2653\W, Bullard, 3/21/16, out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, CSHB 300(FSH) was reported from the House Special Committee on Fisheries.