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New Law Gives Commercial Fishing Families Much-Needed Boost

Sen. Micciche’s SB71 grows seafood industry while fixing unfair glitches

SOLDOTNA–Today, Governor Sean Parnell signed Senator Peter Micciche’s (R-Soldotna) Senate Bill 71, at a joint Soldotna/Kenai Chamber of Commerce meeting at the Soldotna Regional Sports Complex. The bill, which passed the Legislature unanimously, helps commercial fishing families in Alaska in four ways. 

The bill provides fishermen a fair system to pay State landing taxes; it continues and expands value-added tax credits for fishermen and processors adapting to a rapidly-evolving seafood marketplace; it provides credits likely to create more jobs for Alaskans in the seafood industry; and provides incentives to help meet burdensome federal mandates.

“I appreciate Senator Micciche’s work on this legislation that will help Alaskans by eliminating unfair penalties in the fisheries landing tax laws,” said Governor Sean Parnell.  “By expanding the salmon tax credit, more value will be generated from each fish, leading to increased value of the fishery, and more revenue for Alaska’s families and businesses.”

First, SB71 repairs glitches in landing resource taxes and regulations which end up slapping well-intentioned commercial fishermen with unfair penalties and interest.  Currently, the resource landing tax is due March 31st or the last day of the month following the month when the State publishes prices that must be used. However, the Department of Fish and Game price report is not always out by then.  SB71 aligns the tax due date with the date when 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.”

Second, SB71 creates three different payment options for fishermen so they can pay their taxes at a time better suiting the harvest of their particular fishery.  Before this legislation passed, fishermen were required to pay their resource landing taxes in equal quarterly payments.  However, due to the seasonal nature of many fisheries, this provision made it almost impossible to predict a full year’s harvest for the equal payments.

“SB 71 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.

Third, SB71 extends and expands the Alaska Salmon Product Development Tax Credit that is widely credited as a major factor of significantly boosting the commercial value of Alaska salmon since it took effect in 2003.  Several positive effects of the bill include diversified products, expanded state revenues, and increased permit prices.

Until SB71, the tax credit only applied to investment in new property that met requirements for creating a value-added salmon product.   Senate Bill 71 extends the credit until 2020 and broadens the credit for herring value-added processing.  Herring is an established fishery in Alaska and a prime candidate for further development.  Expanding from the roe fishery and into the food fishery is likely to provide significant economic development in the future since the Alaska herring market has been an underutilized fishery where approximately 10-percent of the fish is utilized with the remaining 90-percent having little or no value.

Finally, another impending burden to commercial fishermen 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.  SB71 incentivizes investment in equipment which would reduce the processing waste stream thereby alleviating the pressure to comply with burdensome mandates.

SB71 works in concert with another bill passed by the Legislature and co-sponsored by Senator Micciche, House Bill 204.

Currently, Alaska laws only allow investment in pop-top cans. HB 204 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 7.5 or 14.5 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.”

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