SB 64-SHELLFISH PROJECTS; HATCHERIES; FEES  4:05:01 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." CHAIR REVAK stated SB 64 was previously heard on February 22 with invited testimony and testimony from industry representatives. The intention today is to hear a recap of the bill, ascertain if there are further questions and engage the will of the committee. 4:05:43 PM SENATOR GARY STEVENS, speaking as the bill sponsor, stated SB 64 provides the legal framework for a large-scale fishery project. The goal is to nurture young shellfish, such as king crab, razor clams and geoducks in their earliest formative stages to improve their odds of survival in the wild. 4:06:15 PM TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, affirmed Senator Stevens' comments and added that this bill strengthens Alaska's fisheries portfolio. He noted many stakeholders want this bill to move forward. 4:06:50 PM CHAIR REVAK opened public testimony on SB 64. 4:07:10 PM FRANCES LEACH, Executive Director, United Fishermen of Alaska, Juneau, Alaska, testified in support of SB 64. She stated the United Fishermen of Alaska (UFA) is the largest commercial fishing organization in Alaska, composed of 37 multi-gear and regional commercial fishing groups. She spotlighted significant points from the 2014 UFA "Alaska Mariculture Initiative" resolution which correspond to this bill: • UFA supports environmentally sound programs for the aquatic farming of shellfish and marine plants. • UFA supports large-scale aquatic development projects which will open the door to renewable economic development. It will give the Alaska Seafood Marketing Institute (ASMI) an opportunity to promote aquatic farm products and a platform to grow consumership. • UFA supports economic development for Alaska. Ms. Leach described Washington state's financial success to illustrate Alaska's earnings potential: * Largest producer of farmed shellfish in the United States with an annual sales value over $100 million. * Directly and indirectly the industry employees over 3200 people. * Industry payroll over $27 million. * Total economic contribution of $270 million. MS. LEACH shared the environmental concerns of previous speakers and agreed scientific studies, due diligence and safe permitting practices are necessary for sustainable development. She expressed her belief that these concerns are adequately addressed in the bill's environmentally friendly protocols, and the methods to increase a sustainable shellfish harvest are sufficiently delineated. Ms. LEACH stated in wrap-up that mariculture production is proven to ameliorate some environmental challenges, like ocean acidification. She thanked Senator Stevens for introducing the bill. 4:09:36 PM ALAN PARKS, representing self, Homer, Alaska, testified in opposition of SB 64. He stated he fished commercially for 38 years, the bulk of which was community-based with local vessels and crews that delivered to shore-based processors and markets. Fishing was his primary source of income. He served as a member of many local committees, including the North Pacific Fisheries Management Stellar Sealion Committee and 10 years on the Alaska Marine Conservation Council. MR. PARKS requested due diligence of this bill on the following two points: First, a forensic audit of all salmon hatcheries prior to inserting mariculture loan language into the current Fisheries Enhancement Loan Program. He stated that the language in SB 64 is to be written into the statute that governs salmon hatcheries, which includes rules governing aquaculture association formation, how cost recovery is conducted, and access to the Fisheries Enhancement Loan Program. Mr. Parks stated that to simply remove salmon and insert crab into the statute creates concerns about loan and cost recovery. He brought up the Cook Inlet Aquaculture (CIAA) Association to illustrate how the Fisheries Enhancement Loan Program works, with the disclaimer that his intention was not to pick on the CIAA, but rather, it was the only hatchery for which he had data. MR. PARKS stated loans are to be secured with collateral. The CIAA January 15, 2021 balance sheet had $14 million in assets and $16 million in debt from the Alaska Fisheries Loan Enhancement Program. The state leases the Tutka Bay Hatchery for $25 per year to the CIAA. On the balance sheet, the lease is valued at $484,000 and infrastructure is valued at $2 million. He stated the details of the lease were unknown to him, but the infrastructure included buildings with foundations. The point is if the CIAA leaves the Tutka Bay Hatchery, it is hard to determine which property belongs to the CIAA and which belongs to the state, because 3 out of every 5 fish produced at the Tutka Bay Hatchery go to the hatchery and 2 go to common property. He recommended the state do its due diligence prior to incurring more loans, basically, verify current loan programs are viable prior to the addition of more loans. Second, he clarified that he is not opposed to the promotion and enhancement of crab but urges the legislature to verify the science is valid prior to the issuance of new mariculture loans. He stated a cookie-cutter approach to different types of fishery loans is not good. In other words, verify the mariculture enhancement science is sound first, then offer loans. Do not offer loans first, then verify the science. 4:15:01 PM CHAIR REVAK asked Mr. Parks to email additional testimony, if any, to [sres@akleg.gov]. 4:15:35 PM NANCY HILLSTRAND, Owner, Pioneer Alaskan Fisheries, Kachemak Bay, Alaska, testified in opposition of SB 64. She stated that the Pioneer Alaskan Fisheries was incorporated in 1964; it fished crab and shrimp for over 50 years and still does. She also worked 21 years for the Division of Fisheries Rehabilitation, Enhancement, and Development (FRED) hatchery program. She said at that time, 120 people worked for FRED whose purpose was to oversee the statutes. MS. HILLSTRAND stated the FRED Division no longer exists. ADFG does not have the capability to provide adequate oversight for a project of this scale nor is ADFG able to provide stopgap measures for blunders. She submitted an ADFG internal review publication which details the noncompliance of salmon hatcheries in Prince William Sound and resulting problems. She encouraged committee members to read the internal review and although the report is a decade old, the internal review is still relevant as the same issues persist, such as, straying. She warned that expensive remediation is inevitable when a lack of oversight is coupled with a potential mariculture experiment that went bad. With only an attached zero fiscal note, the state has underestimated the cost of the bill, she said. MS. HILLSTRAND stated salmon hatchery statutes are underutilized and cited a mismanaged permit issue as an example of this problem. Although the Hatchery Committee and the Board of Fisheries are at work to correct this problem, the Board of Fisheries is supposed to amend permits. She stated that it is a struggle to resolve problems because no one will come to the table and talk it out. She requested a review made up of impartial people, so group talks lead to sound decisions and not to rely on an appointee for a balanced point of view. 4:19:15 PM CHAIR REVAK closed public testimony on SB 64 after discerning nobody else wanted to speak. 4:19:51 PM SAM RABUNG, Director, Division of Commercial Fisheries, Alaska Department of Fish and Game, Juneau, Alaska, provided feedback on today's testimony regarding SB 64, specifically: • ADFG owns Tukta Lagoon Bay Hatchery. It is not leased and there is no $25 per month lease fee. The hatchery is contracted to CIAA at no cost to the state. The state maintains ownership of the hatchery while CIAA operates it and pays associated expenses. • The internal review was written in 2006. Since that time, ADFG worked with the operator to resolve the internal review concerns. This issue has been resolved in writing. • All of the hatcheries that operate in the State of Alaska as private nonprofits have been individually reviewed; all of these documents are published and available on the ADFG website. He stated all hatcheries comply with statutes, regulations, and policies. • Straying is a valid concern which is why ADFG established straying safeguards. He pointed out that Prince William Sound king salmon releases began in the mid-1970s. And since the mid-1990s, the king salmon wild stock returned three of the fourth highest wild stock returns in the entire history of Prince William Sound in the last 10 years. So, while straying occurs, it does not seem to have a significant negative effect on natural productivity. MR. RABUNG explained that SB 64 is primarily designed to enable restoration, rehabilitation, and enhancement and he offered these definitions: • Restoration - bringing a depressed stock back to its normal level of productivity that can be naturally sustained; re-establishing a depleted stock or an extirpated stock, so it returns to its natural productivity. • Enhancement providing additional harvestable surplus above what can be naturally produced in that area. So, if you stop the efforts, it drops back down to normal levels of productivity. For example, Kodiak king crab were overfished coincident with a regime change. Those crab stocks never recovered. They still exist in low numbers, too low to have fisheries for well over 30 years. The only action ADFG can take is to keep the fishery closed. MR. RABUNG stated this bill gives ADFG another tool to restore, rehabilitate and enhance stocks. This applies not only to king crab in Kodiak, but abalone in Southeast, and razor clams in Cook Inlet, all examples of projects that could be permitted if this bill were to pass. 4:24:22 PM GINNY ECKERT, Professor of Fisheries and Ocean Sciences, University of Alaska, and Director, Alaska Sea Grant, Juneau, Alaska, said she provided scientific input to this bill for years and wanted to pass on some of her scientific work which addresses concerns. She described her credentials which include work on The Alaska King Crab Research and Rehabilitation Biology Program, active for 10 years. The program produced 30 peer reviewed publications which focus on aspects of king crab biology. The publications are useful to understand king crab biology and king crab fishery management in general, but equally important is to understand potential detrimental impacts of enhancement. MS. ECKERT stated much of the programs work has been done in Kodiak where king crab are not recovering. Outplanting experiments have yet to produce naturally recurring recruitment. So, there is evidence that king crab in Kodiak are recruitment limited and this appears to be true in many other king crab areas that have crashed. To better understand the lack of recruitment, further research is needed, and this bill allows the research to occur. The next phase of the project is to do larger scale outplanting, but until this bill passes, that project is on hold. MS. ECKERT said she hears the environmental concerns. She agreed restrictions are necessary; not just anything should be placed in the ocean at any time. She stated that safety protocols and a review period are written into the bill, both of which address safety concerns. She stated she is happy to participate in the process in the future to make sure enhancement is implemented in a sustainable manner. 4:27:12 PM CHAIR REVAK thanked the testifiers and asked if members had questions. 4:27:23 PM SENATOR MICCICHE stated that he shares Ms. Hillstrand's concerns pertaining to pink salmon releases, however, he does not see the connection between pink salmon releases and this shellfish enhancement bill. He clarified that he does not speak against Ms. Eckert's testimony, but views pink salmon releases and this bill as two separate issues that are not directly related. 4:28:18 PM SENATOR STEVENS harkened back to the robust king crab industry in Kodiak 50 years ago that has since markedly declined. He asked Ms. Eckert whether it is possible to restore king crab fishing in an area like Kodiak. MS. ECKERT answered that Russia and Norway introduced king crab in the Barents Sea successfully in the 1960s. She stated that she was uncertain how Russia and Norway did it, but larvae and adults were released which resulted in a vibrant king crab industry in both areas. Based on the successful king crab fishery in the Barents Sea, it is possible the Kodiak king crab industry has recovery potential. She emphasized that king crab were not native to the Barents Sea, and she does not recommend the release of non-native species into the environment. 4:30:32 PM CHAIR REVAK found no further questions or comments and solicited the will of the committee. 4:30:44 PM SENATOR MICCICHE moved to report SB 64, work order 32-LS0421\A, from committee with individual recommendations and attached fiscal note(s). 4:30:58 PM CHAIR REVAK found no objection and SB 64 was reported from the Senate Resources Standing Committee.