Background:

Fish hatcheries have operated in Washington for more than a century, beginning with one hatchery on the Kalama River in 1895. The Washington Department of Fish and Wildlife (WDFW) currently operates 88 hatcheries throughout the state. Seven salmon hatcheries, however, are proposed for closure in the Governor's 2009-2011 Omnibus Operating Budget, including the Colville, Omak, Arlington, Mossyrock, McKernan, Bellingham, and Palmer Ponds hatcheries.

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Summary of Substitute Bill:

The WDFW is directed to establish a program that uses public-private partnerships for the continued operation and management of state-owned salmonid hatcheries now closed or scheduled for closure during the 2009-2011 biennium. To implement the program, the WDFW must accept and review applications to determine the appropriateness of the private sector partners to manage and operate selected salmonid hatcheries until the WDFW chooses to resume sole management and operation. The application process must be accelerated for any hatchery currently in operation to ensure ongoing salmon production.

Selection of Private Sector Partners.

The WDFW must develop and apply criteria identifying the appropriateness of a potential private sector partner. The criteria are subject to the provisions of RCW 77.100.040 and must attempt to ensure that the private sector partner has a long-range business plan which may include a special harvest of hatchery salmon to ensure the long-range future solvency of the partnership. Partners must either: (1) be qualified under section 501(c)(3) of the Internal Revenue Code; (2) meet an equivalent level of organizational legitimacy; or (3) be a federally recognized tribe. The WDFW must prioritize partnership applications that maximize resumption or continuation of existing hatchery production.

Contents of Partnership Agreements.

All partnership agreements must ensure that the WDFW maintain full authority and oversight of the selected hatcheries. In addition, partnership agreements may not adversely affect existing state laws, agency rules, hatchery management policy involving species listed under the federal Endangered Species Act, or any applicable tribal hatchery management policy or recreational and commercial harvest policy. Finally, all partnership agreements must contain a provision requiring the private sector partner to hold the WDFW and the state harmless from any civil liability arising from the private partner's participation in the agreement.

Substitute Bill Compared to Original Bill:

The substitute bill adds the requirement that criteria developed by the WDFW for selecting private sector partners be subject to the provisions of RCW 77.100.040 (Cooperative projects--Sale of surplus salmon eggs and carcasses). The substitute bill includes federally recognized tribes as potential partners that the WDFW may enter into agreements with for the operation and management of salmonid hatcheries now closed or scheduled for closure during the 2009-2011 biennium. The substitute bill also removes the provision that requires potential partners to be qualified under section 501(c)(3) of the Internal Revenue Code only if the agreement is for more than two years. The substitute bill requires the WDFW to prioritize partnership applications that provide for the maximum resumption or continuation of existing hatchery production in a manner consistent with the WDFW's mandate under RCW 77.04.012 to maintain the economic well-being and stability of the fishing industry. Finally, the substitute bill adds recreational and commercial harvest policies to the list of laws, rules, and policies that partnership agreements may not adversely affect.

Staff Summary of Public Testimony:

(In support) The current economic condition of the state has led to the Governor's proposed closure of a half-dozen salmonid hatcheries throughout the state. Hatcheries contribute both to the revenue of the WDFW and to the economy of the state in general. This bill would provide a safety net to help struggling salmonid hatcheries survive until the state can resume full operation and management of them, and it opens the door to the possibility of other private entities helping the state to fund the operation of these hatcheries. In addition, this bill would not interfere with any existing contracts or agreements.

(With concerns) The WDFW is already actively engaged in private partnership agreements and has the authority to accept donations from and to lease hatchery facilities to private entities, so this bill may not be necessary. In addition, language should be added to this bill to ensure that the WDFW conducts an open, transparent process for deciding on private partners.

(Opposed) This bill represents a significant departure from current management policies of state hatcheries. Allowing only the WDFW to oversee and assume plenary control of the selection of private sector partners is contrary to an open, transparent public process. In addition, in developing criteria for the selection of private sector partners, the WDFW should not be allowed to include a special harvest of hatchery salmon to ensure the long range solvency of the partnership. This cost-recovery provision could have several negative impacts, including the harvest of low-value salmon that could serve to depress salmon prices for fishermen and on the open market. An economic impact analysis of this bill should be conducted to determine whether salmonid harvesters will be negatively impacted. Similarly, an economic cost-benefit analysis should be conducted to determine whether and how the state will benefit from this bill.

Persons Testifying: (In support) Representative Finn, prime sponsor; Ed Owens, Purse Seine Vessel Owners; Paul Ancich, Regional Fisheries Enhancement Groups; Ezra Eickmeyer, Fishing Industry and Salmon Harvesters Political Action Committee; and Jack Field, Washington Fish Growers Association.

(With concerns) Ron Warren, Washington Department of Fish and Wildlife.

(Opposed) David Harsila, Puget Sound Harvesters Association.