Reps question AIDEA fisheries quota financing deal
Note: This story has been updated to attribute comments to correct legislator.
The Alaska Legislature could consider allowing a state entity to get involved in fisheries financing if bills in House and Senate committees continue moving forward, but some legislators are raising questions about the plan.
The most recent versions of Senate Bill 140 and House Bill 288 — introduced by Sen. Lesil McGuire, R-Anchorage, and Rep. Bob Herron, D-Bethel, respectively — include language that adds fisheries projects to the proposed Arctic infrastructure fund.
The infrastructure fund would enable the Alaska Industrial Development and Export Authority to get involved in developing Arctic ports, roads, emergency services and telecommunications, subject to certain limitations. The authority already has the ability to engage in certain work in the Arctic, and has partnered on other projects there.
The new language in both bills would enable AIDEA to use the fund for financing, loans or bond guarantees for fishing vessels, quota shares or individual fishing quota in federally-managed fisheries, or to construct or enhance a plant, facility or equipment used in support of a fishery in the Arctic.
The state has not previously gotten involved in loans to finance quota purchase.
AIDEA has been involved in other aspects of financing fisheries, although it hasn’t made any quota loans. Fisheries-related businesses in Juneau and Sitka have received funding through the Loan Participation Program, and the organization is also involved in the Ketchikan shipyard.
The legislation defines the Arctic as including the Bering Sea and Aleutian chain, where the majority of Alaska’s rationalized federal fisheries take place.
The fisheries language was originally added to the Arctic Infrastructure fund in the Senate Labor and Commerce Committee March 14, where it easily passed on to Senate Finance. When the identical bill was discussed at a March 17 House Labor and Commerce Committee hearing, however, legislators had questions.
Rep. Lora Reinbold, R-Eagle River Rep. Charisse Millett, R-Anchorage said she was a commercial fisher, and aware of the variety of programs available to help support fishermen. She wasn’t sure there was a need for another, she said, or for state funds to support that value of loans.
Millett questioned whether the loans should support vessels, but said she did support financing for other fisheries infrastructure, like equipment and plants, that are fixed to a location.
Rep. Dan Saddler, R-Eagle River, also asked about the provisions to ensure the loans supported Alaskans, and the instances in which Outside entities could benefit.
AIDEA Deputy Director for Infrastructure Development Mark Davis said the authority supported the fund, and said that generally, anything it is involved in must have a “nexus” to Alaska.
Davis also said that generally, the idea of the program is to “repatriate” quota to Alaska, and help provide a stronger base for the fishing industry here.
Currently, the boats participating in the rationalized Bering Sea and Aleutian Islands fisheries are largely based in Seattle.
However, AIDEA could possibly wind up providing loans to businesses based outside the state through the program, although the vessels would need to work in the eligible fisheries, he said.
According to AIDEA spokesman Karsten Rodvik, however, the entity did not pursue the amendments that could create the new program, and has not yet done analysis on expanding its fisheries financing as proposed.
Previously, Rodvik wrote in an email that even if the amendments were added to the bill and passed the legislature, such a program would not necessarily be enacted immediately.
“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.”
AIDEA financing for quota purchases was an idea originally floated at the authority’s February board meeting.
Anchorage-based asset management firm Pt Capital, which focuses on the Arctic, made the pitch to AIDEA’s board of directors Feb. 20 on behalf of three groups interested in such a program: the City of Seward, the Aleutian Pribilof Islands Community Development Association, or APICDA, and the Association of Village Council Presidents, or AVCP.
AVCP President Myron Naneng and Seward’s Ron Long both testified in support of the fisheries financing during the March 17 House committee hearing.
Rodvik wrote that to his knowledge, Pt, various communities, APICDA and Seward were behind the most recent push to get the fisheries financing enacted.
The program as originally proposed would specifically allow low-interest loans or guarantees for quota purchases by community-based nonprofits, municipalities, and community quota entities. Community Development Quota, or CDQ, groups would not be eligible for the loans. CDQ groups are six entities representing 65 Western Alaska villages that receive 10.7 percent of Bering Sea fishing quota each year.
Those community non-profit groups would then need to form joint ventures with others in the industry, like fishing companies or CDQ groups, to harvest the quota. APICDA, one of the proponents of the plan, is a CDQ group and would act as a partner in harvesting quota, not as an eligible entity for financing, under the original proposal.
As proposed through the Arctic infrastructure fund, however, it appears that APICDA and other CDQ groups could receive the loans without community partners.
That’s because those community requirements do not appear in the legislation, although they are mentioned in a supporting document submitted by Pt Capital.
Rodvik said in an email March 18 that AIDEA will need to wait and see what the legislative intent is before determining whether the community requirement is part of the final program, or what other eligibility requirements might exist.