Legislators pass fish bills as session end nears

April 24--Fishers, processors and the general public will see changes to certain fisheries regulations under bills passed by the Alaska Legislature this session.

In the final days of the 2014 session, lawmakers agreed to extend and expand a fisheries product development tax credit program for processors, change the fisheries landing tax for harvesters, authorize a new source of funding for fisheries infrastructure and alter the existing Commercial Fishing and Agriculture Bank.

"I think that we did OK with fisheries issues this year," said Julianne Curry, executive director of United Fishermen of Alaska. "We didn't really have any big ticket items on the legislative horizon."

April 20, the Legislature passed a combo bill that included Senate Bill 71 and House Bill 204. Now that is just waiting for Gov. Sean Parnell's signature.

SB 71 was originally introduced to adjust the schedule and calculations of fishery landing tax payments, generally to better align the payments with when, and how much, fish was caught. That bill, which was introduced by Sen. Peter Micciche, R-Soldotna, passed the Senate in February, and was heard in the House Finance Committee in early March, but did not make it to the House floor for a vote until the very end of the session.

Toward the end of the session, that bill was expanded to also include hatchery cost recovery provisions, Curry said.

On the House floor, HB 204 was added, which extends the tax credit that incentivizes processors to develop new salmon products, and expand it to include herring, as well.

The two were combined April 19, with the joint bill passing the House April 20.

Pacific Seafood Processors Association Vice President Vince O'Shea said his organization was glad to see the legislation passed.

"It continues a program that has been successful in encouraging and enabling salmon processors to invest in equipment to improve the quality and value of Alaskan salmon products," O'Shea wrote in an email. "The changes will encourage the purchase of equipment to more fully utilize salmon, as well as herring, and to produce more finished products within our state. This will benefit harvesters, enable Alaskan processors to better compete in global markets, and increase fish landing tax revenues paid to Alaska and municipalities."

The bill was originally introduced by Rep. Alan Austerman, R-Kodiak, in 2013. O'Shea said it was a "great capstone" to the representative's career in the Legislature.

Curry said the salmon and herring production tax credits encourage innovation in Alaska. Previously, the credits have helped encourage processors to change their canning lines to provide the size most desired on the market; they can also be used to better utilize fish, she said.

"Whether its turning heads and guts into protein powder or developing fish oil or whatever else is on the horizon...it encourages processors to purchase the equipment necessary to be able to do that," Curry said.

The prior salmon production tax credits were set to expire in 2016. Now, the sunset will likely be pushed out to 2020.

Curry said that adding herring to the program is beneficial to Alaska because currently, there's a strong herring fishery in the state but the market to sell those fish isn't as robust. This should help with that.

Herring is caught statewide, however, so fishers in several regions could benefit, she said.

"Lots of boats participate and lots of processors participate as well, so it's great to see this kind of product development being encouraged by the state legislature," Curry said.

As of press time April 23, the Legislature was still considering House Bill 306, which is an overall look at tax credit programs throughout the state introduced by Rep. Steve Thompson, R-Fairbanks.

Nearly all tax credits would be given a sunset date and be up for review in the next several years, with the exception of certain oil and mining credits.

The affected fish tax credits include the salmon utilization tax credit, fisheries tax credits for scholarships, the fisheries business education credit and others. Most sunset in 2016 or 2018, with the salmon and herring production tax credit and a community development quota program credit due for review in 2020.

Curry said that the sunsets came about as a result of concerns regarding foregone revenue to the state.

Fisheries funding changes

Two bills addressing fisheries loans also passed toward the end of the session.

Senate Bill 140 -- if signed by Parnell -- will allow the Alaska Industrial Development and Export Authority to make loans or loan guarantees for fishing infrastructure as part of its Arctic Infrastructure Fund.

The legislation created the infrastructure fund, and included the Arctic Ocean, and the Beaufort, Bering, and Chukchi seas, and the Aleutian Chain in its definition of the Arctic. Generally, it can be used for developing various Arctic infrastructure -- ports, roads, emergency services and telecommunications projects.

According to the legislation, a project may not receive more than one-third of its value in a loan from the fund.

Curry said the purpose of that bill was to help incentivize some of the Alaska fishing fleet that is currently based in Seattle to make its home in Alaska. UFA did not take a position, but tracked the issue because there was interest in the fishing industry, she said.

Earlier iterations of the bill would have allowed the fund to make loans for fisheries quota, too. The version that passed April 21, however, specified that loans could be used for "the construction, improvement, rehabilitation, or expansion of a shore-based plant, facility, or equipment used in support of a fishery in the Arctic."

AIDEA spokesman Karsten Rodvik wrote in an email to The Journal previously that even if the bill passed the legislature, such a program would not necessarily be enacted right away.

"The Fund would need to be capitalized before any new infrastructure projects could be financed through the Fund," Rodvik wrote in a March 4 email. "Also, before any investment or Arctic or fisheries infrastructure would be funded through the new Fund, the potential financing would go through the same rigorous due diligence that all of our infrastructure financing goes through."

House Bill 121 would expands the loans the Alaska Commercial Fishing and Agriculture Bank, or CFAB can make.

If signed by Parnell, the bank will be able to make more tourism-related loans, and generally expand its work in the resource extraction and farming industries.

Curry said that as the bill worked its way through the legislative process, there were some concerns about a provision to allow CFAB to hire a lobbyist, and with the bank's request to loan to non-Alaska residents, but some of that language was tightened up through the process.

The CFAB bill also includes a provision that would require the bank to consider "whether the principles of conservation and sustained yield will limit the potential borrower's ability to repay the loan in a timely manner."

That language was a watered-down version of an amendment originally introduced by Rep. Bill Stoltze, R-Chugiak, that would have prevented the bank from making loans using a limited entry permit as collateral if the permit is for a mixed stock fishery with the potential to affect any stocks of concern. The majority of the state's salmon stocks of concern are in the Matanuska-Susitna Borough, and swim through Cook Inlet where several commercial fisheries targeting other stocks, primarily Kenai and Kasilof River sockeye, occur.

That was eventually removed from the bill before it passed.

Crew licenses, air ambulance services addressed

Regulations for short-term fishing crew licenses will also likely change under House Bill 143, which passed April 21 and is awaiting transmittal to Parnell.

HB 143 was introduced by Rep. Paul Seaton, R-Homer, and is meant to address an issue with commercial crew licenses, where crew members are purchasing several short-term licenses, originally intended to allow tourists or others to try out a day of commercial fishing.

The legislation would cap individuals at purchasing one $30 license for a seven-day period; to crew for a longer duration, a full crew license would be required. Individuals would be reimbursed for the short-term license if they purchased an annual license that same year.

Curry said she also tracked Senate Bill 159 through the session, because of its importance to rural communities.

SB 159 addressed air ambulance services and the insurance or membership programs that allow residents to pay an annual fee for medevac coverage. A prior analysis had the potential to change or reduce those programs, but the bill enables them to be extended.

Fishermen living in rural Alaska are often enrolled in those programs to ensure they can get to medical services at a reasonable cost, Curry said.

"This was an easy way to show those providers that we support them, we support healthy regulations that make sure that we can save the lives of Alaskans and commercial fishermen," Curry said.

Parnell signed that into law April 23.

Molly Dischner can be reached at molly.dischner@alaskajournal.com.

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