Legislature Passes Bill to Simplify Landing Taxes for Commercial Fishermen and to encourage New Added-Value Products and Investment for Salmon and Herring
Senate Bill 71 repairs glitches in landing tax statute currently causing unfair penalties
JUNEAU- The Alaska State Legislature unanimously passed Senate Bill 71, sponsored by Senator Peter Micciche (R-Soldotna). SB71 does three primary things for commercial fishing families in Alaska. The bill provides a fair system for fishermen to use to pay landing taxes to the State, it continues and expands value-added tax credits for fishermen and processors always looking to adapt to a rapidly-evolving seafood marketplace and it provides credits for upgrades likely to result in a greater proportion of Alaskans being employed in the seafood industry.
The bill repairs glitches in the landing resource tax statutes and regulations which cause the payment of unfair penalties and interest by well-intentioned commercial fishermen. Currently the resource landing tax is due March 31st. However, the statewide average fish price report calculated by the Department of Fish and Game is not always published by that date. SB71 aligns the due date of the tax with the date that the report is released.
“As a commercial fisherman and a Senator from a coastal district, I understand the confusion and frustration caused by the current statutes,” said Senator Micciche. “This measure will allow fishing families to do what they do best -spend time fishing and not wasting time on inefficient and unfair government regulations that provide no value.”
The current statute also includes provisions for equal quarterly payments. Many Alaska fishermen and fisheries only operate in one of the four quarters. Considering the seasonal nature of many fisheries and the variability in harvest, it is virtually impossible for resource landing taxpayers to accurately predict their full year’s harvest for equal payments. With the passage of this legislation, fishermen can choose from three different methods to make their estimated landing tax payments in better alignment with their particular fishery.
“SB71 allows fishermen to pay their landing taxes in accordance with a schedule that coincides with the quarters when the actual fishing occurred. It provides the same landing tax revenue quantity to the state, yet eliminates unfair fees and fines for lateness that was beyond the control of Alaska’s fishermen,” said Senator Micciche.
The bill also extends and expands the Alaska Salmon Product Development Tax Credit that is widely credited as a major factor of significantly increasing the commercial value of Alaska salmon over the past few years. There have been positive trends since this bill was originally enacted in 2003, including product diversity, increased state revenues from the fisheries business tax and increased permit prices.
The current tax credit applies to investment in new property that meets a requirement for creating a value added salmon product. Senate Bill 71 extends the ability of industry to use this credit until 2020 and expands the credit for herring value-added processing. Herring is an established fishery in Alaska and a prime candidate for utilization expansion. Expanding from the roe fishery and into the food fishery is likely to provide significant economic development in the future since, in the past, the Alaska herring market has been an underutilized fishery where approximately 10 percent of the fish is utilized with the remaining 90% having little or no value.
Another impending burden to industry is the Environmental Protection Agency’s efforts to force industry to eliminate seafood discharges containing solids into near shore waters. Many processing facilities in Alaska currently grind and pump discharge. Senate Bill 71 incentivizes investment in equipment that would reduce the processing waste stream thereby alleviating the pressure to comply with burdensome mandates.
Currently, statute only allows investment in pop-top cans. HB204 also provides industry the necessary flexibility to respond to changing market demands for can sizes. This bill responds to this limitation by expanding the credit to any new equipment for food herring processing and also to produce can sizes other than 14.75 ounces or 7.5 ounces.
Senator Micciche said, “I’m proud of this bill and what it means for the continued growth and the promotion of efficiency in the Alaska seafood industry, which is so vital to District O and Alaska coastal communities to increase Alaskan employment and fisheries revenues. The bill further encourages in-state processing and the expansion of market opportunities. I’m equally proud of the partnership on this bill working with Representative Austerman (R-Kodiak). We put our heads together for fishermen and coastal communities to explain the value of the bill to remaining Legislators.
Julianne Curry, Executive Director of the United Fishermen of Alaska summarized the bill by saying, “The passage of SB71 marks great improvements for the seafood industry in Alaska. By amending resource landing tax regulations, Alaska's hard working fishing families will not be over-burdened with estimated payments and possible penalties. The expansion of a tax credit program also undoubtedly creates additional opportunities for innovation in salmon and herring seafood processing. Alaska will be well-served with the credit that encourages the utilization of seafood waste and helps develop alternative products for Alaska's robust herring fisheries. A third component of SB71 allows for flexibility in cost-recovery collections of the salmon hatchery sector. UFA is proud to have supported Senator Micciche’s SB71, specifically designed to help sustain commercial fishing as Alaska's number one private sector employer.”
SB71 passed both the Senate and the House unanimously and now heads to Governor Sean Parnell for his signature.
Posted: April 24, 2014