(1)(a) The department shall establish a program that utilizes department-partner agreements for the resumption or continued operation and management of state-owned salmonid hatcheries that are located in the Hood Canal basin. To implement the program, the department shall accept and review applications to determine the appropriateness of the partner to manage and operate selected salmonid hatcheries. The department shall accelerate the application process relating to any hatchery currently in operation to avoid cessation of ongoing salmon production.

(((2)(a)))(b)(i) To select a partner, the department shall develop and apply criteria identifying the appropriateness of a potential partner. The criteria must seek to ensure that the partner has a long-range business plan, which may include the sale of hatchery surplus salmon, including eggs and carcasses, to ensure the long-range future solvency of the partnership. The business plan may also allow the partner to harvest hatchery chum salmon in a designated area through persons under contract with the partner as provided under a permit from the department or by rule of the commission. All chum salmon harvested must be sold at prices commensurate with the current market and all funds must be utilized by the partner to operate the hatchery.

(((3)))(c) The department shall place a higher priority on applications from partners that provide for the maximum resumption or continuation of existing hatchery production in a manner consistent with the mandate contained in RCW 77.04.012 to maintain the economic well-being and stability of the fishing industry.

(((4)(a)))(d)(i) Agreements entered into with partners under this section must be consistent with existing federally recognized tribal rights, state laws, agency rules, collective bargaining agreements, hatchery management policy involving species listed under the federal endangered species act, or, in the case of a tribal partner, any applicable tribal hatchery management policy or recreational and commercial harvest policy.

(((b)))(ii) Agreements under this section must also require that partners give preference to retaining classified employees whenever possible. In circumstances where it is not possible, partners conducting hatchery operations must maintain staff with comparable qualifications to those identified in the class specifications for the department's fish hatchery personnel.

(((5)))(e) All partnership agreements entered into under this section must contain a provision that requires the partner to hold harmless the department and the state for any civil liability arising from the partner's participation in the agreement or activities at the subject hatchery or hatcheries.

(((6)))(f) All partnership agreements entered into under this section must identify any maintenance or improvements to be made to the hatchery facility, and the source of funding for such maintenance or improvements. If funding for the maintenance or improvements is to come from state funds or revenue sources previously received by the department, the work must be performed either by employees in the classified service or in compliance with the contracting procedures set forth in RCW 41.06.142.

(2)(a) Subject to the availability of amounts appropriated for this specific purpose, the department shall implement a pilot program to examine the opportunities and challenges, including initiating consultation with federal agencies, associated with organizing the state's fish hatchery activities to emulate the fish hatchery policies of the state of Alaska with regard to salmon. The directive provided to the department under this subsection includes the authority to actively pursue opportunities for partnerships with nonprofit and private organizations to build and operate state-approved fish hatcheries, either independently or in cooperation with the department. The objective of the directive provided to the department under this subsection is to evaluate the development of a system of fish hatcheries that will be financially self-supporting over the long term. Specifically, the department has the authority to work with a nonprofit organization devoted to restoring salmon abundance within marine area 7 to determine the feasibility of a pilot hatchery at the port of Bellingham's property within a redevelopment area located on Bellingham's central waterfront. The pilot hatchery may use remote release sites in northern Puget Sound.

(b) The department may enter into contracts for the purpose of producing technical studies and reports necessary to carry out the pilot program authorized in this section. The department must consult with governments, agencies, tribes, and other similar entities as appropriate for the purpose of carrying out its responsibilities under this section.

NEW SECTION. Sec. 2. The department of fish and wildlife shall submit a report to the legislature that provides recommendations for legislation related to the state hatchery program that would be necessary, in the department's opinion, to satisfy the state's salmon recovery goals in an efficient and fiscally sustainable manner, including options for privatization, public-private partnerships, and enhancing contributions of salmon for harvesting opportunities. The report required under this section must be submitted to the legislature by December 1, 2020.