Valley bills seek fishing dollars

Gov. Bill Walker’s commercial fisheries tax bill is stalled in committee, but legislators continue digging into the industry for revenue.

Two bills, sponsored by legislators from the Matanuska-Susitna Borough, would impose new taxes on either the entire industry or the longliners and trawlers in the federal and state fisheries.

HB 358, sponsored by Rep. Mark Neuman, R-Big Lake, and Rep. Les Gara, D-Anchorage, would require non-salmon and non-halibut trawlers and longliners to pay a tax on halibut and salmon bycatch.

The bill was passed to the House Fisheries Committee on Feb. 24 but has not yet been scheduled for a hearing. On the same day, Rep. Scott Kawasaki, D-Fairbanks, signed as a bill cosponsor.

Rex Shattuck, Neuman’s chief of staff, said the bill doesn’t intend anything more drastic than starting the conversation.

“This is a very fundamental bill, and we honestly can’t say we have all the answers,” Shattuck said. “It’s a basic framework to start the conversation. If it’s a resource we own as Alaskans, and we always have this concern about bycatch, let’s have a discussion.”

Neither bill is expected to move quickly in a Legislature buried under a fiscal bill landslide, but Shattuck said he hopes the bycatch bill will spark a conversation to have over the summer.

Though the extra funds would go into the general fund and not directly into fish and game management, Neuman’s position as vice-chair of the House Finance Committee guarantees that the funds will be used for fisheries management and research.

 “You can comfortably know those are going into related management,” said Shattuck. “From our perspective, Neuman’s sort of been clear in that. We should be looking at putting them into funding things like research.”

Bycatch happens when fishermen incidentally harvest a non-target species while chasing the main catch.

The bill would require both state and federal fishermen to pay 1 percent of the total value of their bycatch.

In federal fisheries – those from three to 200 miles off the coast – federal law bars vessels from selling bycatch salmon and halibut. It therefore has no existing value on which to base a tax.

To fix this, the bill would direct fisheries managers to assign it a value, defined as “the market value of the fishery resource as determined by the prevailing price paid to fishermen for the unprocessed fishery resource of the same kind and quality by fisheries businesses in the same region of market area where the fishery resource was taken.”

According to this formula, fishermen could end up paying thousands at the individual vessel level and millions altogether. A 1 percent tax on halibut bycatch would have extracted up to $1.7 million from the federal groundfish fisheries alone in 2014.

The price paid to fishermen, or ex-vessel price, varies from region to region and year to year. For chinook salmon, the Alaska Department of Fish and Game estimated an average price of $2 per pound for chinook salmon in 2015 – lower than the average $2.80 per pound over the prior four years.

Halibut varies, but industry sources say the current ex-vessel price is between $5 and $6 per pound.

In 2014, federal groundfish fisheries harvested 27.6 million pounds of halibut, according to catch data from the National Oceanic and Atmospheric Administration.

At $5 per pound, the total value of halibut bycatch would be $138 million. At $6 per pound, it would be $166 million.

Federal groundfish fisheries also harvested just under 34,000 chinook as bycatch in the Bering Sea and Aleutian Islands and Gulf of Alaska in 2014. Assuming an average weight of 30 pounds, the value of chinook bycatch in federal groundfish fisheries is $2.9 million, or $29,000 in tax value.

The bill would exempt those fishing vessels that donate their bycatch halibut to food bank programs like SeaShare.

Federal law, however, forbids some vessels are forbidden from making such donations. Groundfish fisheries in the Bering Sea and Aleutian Islands are disallowed from keeping bycatch halibut. Representatives from this fishery view the proposed tax as a penalty.

SB 198

The second bill, sponsored by Sen. Mike Dunleavy, R-Wasilla, would affect all Alaska fishermen regardless of bycatch. SB 198, introduced Feb. 22, levies a 12.5 percent royalty on all limited entry license holders’ catch. The bill requires seafood buyers to collect the royalty upon purchase, keep detailed records, and remit the money to the state at the end of each month.

The bill was referred to the Senate Resources Committee on Feb. 22.

Dunleavy’s bill would bring in a hefty chunk of cash for the state, and a hefty chunk of cash from fishermen’s bottom lines.

According to Commercial Fisheries Entry Commission data, limited entry permits for both Alaska resident permit holder and non-residents pulled a collective $957 million in 2014.

At the proposed royalty rate, Alaska limited entry permit holders would have paid $120 million to the state.

The royalty would hit Alaska permit holders on an individual basis. CFEC records for 2014 show an average Alaska resident limited entry permit holder earnings of $50,451 per permit.

Under the proposed royalty, Alaska fishermen would have paid an average $6,307 apiece in 2014. Non-residents would have paid slightly more at $6,525.

Though the Anchorage and Mat-Su boroughs host over half the state’s population – 54 percent, according to the most recent U.S. census data – they only host 10 percent of the resident commercial fishing permits.

Of 38,192 limited entry permits issued in 2014, only 1,141 – 3 percent – were issued to Mat-Su Borough residents.

CFEC issued 2,647 permits to Anchorage municipality residents, or 7 percent of the total permits issued.

03/02/2016 - 2:37pm