Bill Summary – FastDemocracy

SB 350
                       Department of Legislative Services
                              Maryland General Assembly
                                    2021 Session
                            FISCAL AND POLICY NOTE
                                 Enrolled - Revised
Senate Bill 350               (Chair, Education, Health, and Environmental Affairs
                              Committee)(By Request - Departmental - Natural
                              Resources)
Education, Health, and Environmental Affairs           Environment and Transportation
                        Natural Resources - Aquaculture - Leases
This departmental bill repeals provisions governing the establishment of Aquaculture
Enterprise Zones (AEZs) in the Chesapeake Bay. The bill also authorizes the Department
of Natural Resources (DNR) to issue an “enterprise lease” to a person for use in the waters
of the State to assess the feasibility of cultivating native or naturalized species of aquatic
plants for commercial purposes.
                                     Fiscal Summary
State Effect: The bill is expected to be implemented with existing staff. Any revenues
from application fees and rent, and the costs of any public informational meetings or
hearings (of protests) on the issuance of leases, are not expected to materially affect State
finances.
Local Effect: None.
Small Business Effect: DNR has determined that this bill has a meaningful impact on
small business (attached). The Department of Legislative Services concurs with this
assessment. (The attached assessment does not reflect amendments to the bill.)
                                         Analysis
Bill Summary: The bill repeals provisions governing the establishment of AEZs in the
Chesapeake Bay, which are zones that statute requires DNR to establish, within which the
department may issue, to any person, an aquaculture lease.
The bill newly authorizes DNR to issue an “enterprise lease” (a lease of the water column)
to a person for use in the waters of the State to assess the feasibility of cultivating native
or naturalized species of aquatic plants for commercial purposes. “Native” means having
historically lived, grown, and reproduced in State waters. “Naturalized” means
documented as having lived, grown, and reproduced in State waters without known harm
to the ecosystem.
The bill establishes application procedures, location restrictions, public notice provisions,
the ability for an adversely affected person to protest the issuance of a lease (and any person
to request a public informational meeting), and other provisions applicable to an enterprise
lease, that are similar to those applicable to existing aquaculture leases.
An applicant for a lease must pay a nonrefundable application fee, and the department, in
consultation with the Aquaculture Coordinating Council, must establish an annual amount
of rent for an enterprise lease. The term of a lease may not exceed five years (and a lease
cannot be renewed) and the size of a lease may not exceed two acres.
The department may adopt regulations to implement the bill’s enterprise lease provisions,
including regulations concerning species that may not be cultivated or gear that may not
be used in a leased area.
Current Law/Background:
Aquaculture Enterprise Zones
DNR eliminated, in February 2019, the only two AEZs established in DNR regulations,
indicating that subsequent to the establishment of the AEZs, the department implemented
a new shellfish aquaculture leasing program that reduced the utility and function of AEZs
and, as a result, no leasing program for AEZs was developed. One of the AEZs, and a
portion of the other, were converted to public shellfish fishery areas.
Enterprise Leases
DNR indicates that it has received inquiries over the years about experimenting with the
feasibility of growing aquatic grass species in Maryland. Similar in concept to the existing
demonstration lease program (available to educational and nonprofit institutions to
demonstrate the ecological benefits of growing shellfish or for research or education), DNR
indicates the bill makes limited-acre and short-term aquaculture leases available to private
entities to explore the commercial potential of culturing nontraditional aquatic grass
species in the State.
SB 350/ Page 2
                               Additional Information
Prior Introductions: None.
Designated Cross File: None.
Information Source(s): Department of Natural Resources; Office of Administrative
Hearings; Department of Legislative Services
Fiscal Note History:   First Reader - January 12, 2021
rh/lgc                 Third Reader - March 16, 2021
                              Revised - Amendment(s) - March 16, 2021
                              Revised - Correction - March 16, 2021
                       Enrolled - April 9, 2021
                              Revised - Amendment(s) - April 9, 2021
Analysis by: Scott D. Kennedy                    Direct Inquiries to:
                                                 (410) 946-5510
                                                 (301) 970-5510
SB 350/ Page 3
         ANALYSIS OF ECONOMIC IMPACT ON SMALL BUSINESSES
TITLE OF BILL:       Natural Resources – Aquaculture – Enterprise Leases
BILL NUMBER:         SB 350
PREPARED BY:         James McKitrick, Director, Legislative and Constituent Services
PART A. ECONOMIC IMPACT RATING
This agency estimates that the proposed bill:
       _____   WILL HAVE MINIMAL OR NO ECONOMIC IMPACT ON
       MARYLAND SMALL BUSINESSES
       OR
        X      WILL HAVE A MEANINGFUL ECONOMIC IMPACT ON
       MARYLAND SMALL BUSINESSES
PART B. ECONOMIC IMPACT ANALYSIS
Small business will benefit to the extent that the legislation allows for more innovation
and economic opportunity in the aquaculture industry by allowing private entities to
explore the commercial potential of culturing aquatic grass species in Maryland.
SB 350/ Page 4