Legislature(2025 - 2026)BUTROVICH 205
03/31/2025 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| Presentation: Fisheries Task Force Report | |
| SB130 | |
| SB135 | |
| HJR11 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HJR 11 | TELECONFERENCED | |
| *+ | SB 130 | TELECONFERENCED | |
| *+ | SB 135 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
SENATE RESOURCES STANDING COMMITTEE
March 31, 2025
3:30 p.m.
MEMBERS PRESENT
Senator Cathy Giessel, Chair
Senator Matt Claman
Senator Forrest Dunbar
Senator Scott Kawasaki
Senator Shelley Hughes
Senator Robert Myers
MEMBERS ABSENT
Senator Bill Wielechowski, Vice Chair
COMMITTEE CALENDAR
PRESENTATION: FISHERIES TASK FORCE REPORT
- HEARD
SENATE BILL NO. 130 "An Act relating to the fisheries product
development tax credit; providing for an effective date by
amending the effective date of sec. 2, ch. 31, SLA 2022; and
providing for an effective date."
- HEARD & HELD
SENATE BILL NO. 135 "An Act relating to the sharing of tax
revenue from the fisheries business tax and fishery resource
landing tax with municipalities; relating to municipal reports
on the shared tax revenue; and providing for an effective date."
- HEARD & HELD
CS FOR HOUSE JOINT RESOLUTION NO. 11(RES) AM Recognizing and
honoring the relationship between Canada and Alaska.
- HEARD & HELD
PREVIOUS COMMITTEE ACTION
BILL: SB 130
SHORT TITLE: FISHERIES PROD DEVELOPMENT TAX CREDIT SPONSOR(s):
RULES BY REQUEST OF TASK FORCE EVAL ALASKA SEAFOOD INDUSTRY
03/12/25 (S) READ THE FIRST TIME - REFERRALS
03/12/25 (S) RES, FIN
03/31/25 (S) RES AT 3:30 PM BUTROVICH 205
BILL: SB 135
SHORT TITLE: REFUND OF FISH BUSINESS TAX TO MUNIS SPONSOR(s):
RULES BY REQUEST OF TASK FORCE EVAL ALASKA SEAFOOD INDUSTRY
03/18/25 (S) READ THE FIRST TIME - REFERRALS
03/18/25 (S) RES, FIN
03/31/25 (S) RES AT 3:30 PM BUTROVICH 205
BILL: HJR 11
SHORT TITLE: RECOGNIZING ALASKA/CANADA RELATIONSHIP SPONSOR(s):
KOPP
02/26/25 (H) READ THE FIRST TIME - REFERRALS
02/26/25 (H) RES
03/10/25 (H) RES AT 1:00 PM BARNES 124
03/10/25 (H) -- MEETING CANCELED --
03/14/25 (H) RES AT 1:00 PM BARNES 124
03/14/25 (H) Moved CSHJR 11(RES) Out of Committee
03/14/25 (H) MINUTE(RES)
03/17/25 (H) RES RPT CS(RES) 7DP 1NR
03/17/25 (H) DP: FIELDS, HALL, ELAM, RAUSCHER,
MEARS, DIBERT, BURKE
03/17/25 (H) NR: COULOMBE
03/24/25 (H) TRANSMITTED TO (S)
03/24/25 (H) VERSION: CSHJR 11(RES) AM
03/26/25 (S) READ THE FIRST TIME - REFERRALS
03/26/25 (S) RES
03/31/25 (S) RES AT 3:30 PM BUTROVICH 205
WITNESS REGISTER
TIM LAMKIN, Staff
Senator Gary Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Gave the presentation Fisheries Task Force
Report.
SENATOR GARY STEVENS, District C
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced the presentation Fisheries Task
Force Report.
TIM LAMKIN, Staff
Senator Gary Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 130 on behalf of the Senate
Rules Committee by request of the Task Force Evaluating Alaska
Seafood Industry.
JULIE DECKER, President
Pacific Seafood Processors Association (PSPA)
Wrangell, Alaska
POSITION STATEMENT: Testified by invitation in support of SB
130.
BRANDON SPANOS, Deputy Director
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 130.
CHRIS BECKER, Lead Auditor
Tax Division, Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 130.
TIM LAMKIN, Staff
Senator Gary Stevens
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Introduced SB 135 on behalf of the sponsor.
BRANDON SPANOS, Deputy Director
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 135.
CHRIS BECKER, Lead Auditor
Tax Division
Department of Revenue (DOR)
Anchorage, Alaska
POSITION STATEMENT: Answered questions on SB 135.
NILS ANDREASSEN, Executive Director
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Testified by invitation in support of SB
135.
REPRESENTATIVE CHUCK KOPP, District 10
Alaska State Legislature
Junea, Alaska
POSITION STATEMENT: Sponsor of HJR 11.
RANJ PILLAI, Premier of Yukon
Whitehorse, Yukon Territory, Canada
POSITION STATEMENT: Testified by invitation in support of HJR
11.
MATT MORRISON, Executive Director
Pacific NorthWest Economic Region (PNWER)
Seattle, Washington
POSITION STATEMENT: Testified by invitation in support of HJR
11.
JOHN RODDA, Vice President
Arctic Winter Games International Committee
Anchorage, Alaska
POSITION STATEMENT: Testified by invitation in support of HJR
11.
SARAH FRAMPTON, Executive Director
Arctic Winter Games Team Alaska (AWGTA)
Fairbanks, Alaska
POSITION STATEMENT: Testified by invitation in support of HJR
11.
MIKE COONS, representing self
Wasilla, Alaska
POSITION STATEMENT: Testified in opposition to HJR 11.
ACTION NARRATIVE
3:30:30 PM
CHAIR GIESSEL called the Senate Resources Standing Committee
meeting to order at 3:30 p.m. Present at the call to order were
Senators Myers, Claman, Dunbar, Kawasaki, Hughes and Chair
Giessel.
^PRESENTATION: FISHERIES TASK FORCE REPORT
PRESENTATION: FISHERIES TASK FORCE REPORT
3:31:43 PM
CHAIR GIESSEL announced the presentation Fisheries Task Force
Report.
3:32:01 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, Juneau, Alaska, introduced himself and said that
Senator Gary Stevens would arrive shortly to introduce the
Fisheries Task Force Report. He explained that Senate Concurrent
Resolution 10 (2024) created the Joint Legislative Task Force
Evaluating Alaska's Seafood Industry. The task force consisted
of four senators and four representatives and met 12 times. He
said the impetus for the task force was the economic crisis
faced during the previous fishing season along with a salmon
task force formed in the early 2000s.
3:33:10 PM
SENATOR GARY STEVENS, District C, Alaska State Legislature,
Juneau, Alaska, said Senate Concurrent Resolution 10 created the
Joint Legislative Task Force Evaluating Alaska's Seafood
Industry (also known as the Alaska Seafood Industry Task Force
(ASTF)) to explore how the State of Alaska can help the seafood
industry recover from the recent economic crisis. He said the
seafood industry is the largest manufacturing sector in Alaska
and employs roughly 38,000 workers and impacts more than 142
communities. In 2001-2002, the seafood industry was the largest
source of income for 11 communities. He said the industry has a
financial impact of close to $6 million. He stated that a
variety of headwinds, market, and economic conditions -
including depressed consumer demand, weakened US currency,
deflated prices, and international overharvesting - have made
Alaska's seafood products less competitive in the market.
SENATOR STEVENS said the task force met monthly and heard from a
wide variety of industry stakeholders, including fishermen,
scientists, and businessmen, among others. The task force
produced its final report at the end of January 2025. Some
recommendations are long-term, while others are short-term and
more swiftly attainable. He said the task force made a concerted
effort and focused its time on finding both short- and long-term
solutions and sought ways to improve the status of the seafood
industry.
3:35:38 PM
MR. LAMKIN explained that the Alaska Fisheries Industry Task
Force (ASTF) was inspired by work done by a 20-member fisheries
task force formed in 2002, of which Senator Stevens was a
member. He briefly discussed the work done by the 2002 fisheries
task force and highlighted the complexity and size of that
project, which focused solely on the salmon fishery. He noted
that the 2002 fisheries task force's findings are available
online. In contrast, ASTF is an eight-member task force that
evaluated all fisheries in the state of Alaska. The task force
had a six-month timeframe in which to complete its work. He said
that, in addition to the task force recommendations, there is a
substantial portfolio of legislation.
3:37:09 PM
MR. LAMKIN directed attention to a spreadsheet in members'
packets, titled "Joint Legislative Task Force Evaluating
Alaska's Seafood Industry, Summary of Action Points," which
summarizes the task force's final report. He indicated that the
items are not listed in order of priority; however, the list
indicates those items that are immediately actionable. He
directed attention to items 7a, 7b, and 8 and explained that
these relate to product development tax credits and "fish tax"
revenue sharing, including how those revenues are allocated. He
said he would present the remaining action items and explain
their status and categorization.
3:38:12 PM
MR. LAMKIN identified several report components. He highlighted
the finance and tax component. Additional areas of focus
include:
• Infrastructure
• Workforce Development
• Federal Recommendations (Including recommendations for
resolutions)
• Marketing (Alaska Seafood Marketing Institute (ASMI))
• General
MR. LAMKIN indicated that page one contains near-term
recommendations, while page two includes larger, long-term
projects. He noted that the report also includes mid-term items
(driven primarily through budget appropriations) and proposed
setting those items aside and focusing on the policy components
on page one.
MR. LAMKIN continued to discuss the summary of action points. He
directed attention to item 10, which relates to insurance
pooling and risk management within the seafood sector.
Legislation that would help the fishing fleet mitigate insurance
risk is currently under consideration. Action point 18 includes
budget components and encourages Alaska Industrial Development
and Export Authority (AIDEA) and the Alaska Energy Authority
(AEA) to prioritize energy generation and grid development in
coastal (rural) Alaska.
3:40:15 PM
MR. LAMKIN continued to discuss the summary of action points. He
said item 9 relates to the AIDEA Emergency Loan Program and
addresses contingencies for negative market or harvest events.
He moved to the next segment of the summary, which includes
items 6a-6c and 9. This segment touches on the Alaska Commercial
Fishing and Agriculture Bank (CFAB) and the Commercial Fisheries
Revolving Loan Fund. He briefly explained the reasons for the
recommended changes, which seek parity between CFAB and CRFL and
said the loans referenced target smaller, independent Alaska-
based processors. Item 22 is underway and primarily impacts the
University of Alaska (UA) and the Department of Labor and
Workforce Development (DOLWD). This would improve data sharing
between organizations and would provide that information to the
legislature.
3:42:05 PM
MR. LAMKIN continued to discuss the summary of action points. He
explained that items 3-4 address the Commercial Fisheries Entry
Commission (CFEC) and relate to permit optimization, buyback
programs, and studying fiscally challenged fisheries. He noted
that proposed changes to CFEC are often sensitive and involve
constitutional considerations. Item 15 seeks nexus for the
Village Safe Water program and community owned cold storage. He
indicated that making cold storage available for small producers
was a recurring topic during task force discussions.
3:43:21 PM
MR. LAMKIN continued to discuss the summary of action points. He
noted that item 2, which proposes including a Division of
Seafood and Marine Resources within the proposed Department of
Agriculture, has been partially addressed [by SB 128]. He noted
particular interest in including seafood in the proposed
department. He said that items 30, 29, 28, 27, 19, and 1 include
federal recommendations. Each would take the form of a joint
resolution. He indicated that many of these have been drafted
and are awaiting introduction.
3:44:24 PM
MR. LAMKIN continued to discuss the summary of action points. He
directed attention to items 12 and 13, which recognize the need
for supplemental and ongoing support for the Alaska Seafood
Marketing Institute's (ASMI) efforts to promote Alaskan seafood.
3:44:52 PM
CHAIR GIESSEL emphasized the depth and breadth of the summary of
action points and expressed appreciation for the detailed
organization of each action point.
SB 130-FISHERIES PROD DEVELOPMENT TAX CREDIT
3:45:24 PM
CHAIR GIESSEL announced the consideration of SENATE BILL NO. 130
"An Act relating to the fisheries product development tax
credit; providing for an effective date by amending the
effective date of sec. 2, ch. 31, SLA 2022; and providing for an
effective date."
3:45:40 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, Juneau, Alaska, said SB 130 closely models
legislation Senator Stevens introduced several years ago that
expanded the value-added tax credits for salmon and herring. SB
130 further expands the value-added tax credits to include all
species. He said this is the product of continuing discussions
with the processing sector and is an attempt to acknowledge the
complexities of that sector. He said the change would create
greater flexibility for those who would qualify for the tax
credits.
3:47:15 PM
SENATOR DUNBAR asked if the Department of Revenue (DOR) was
available for questions.
3:47:31 PM
CHAIR GIESSEL replied yes.
3:47:43 PM
SENATOR DUNBAR said he would hold his question until after
invited testimony.
3:48:01 PM
MR. LAMKIN said there are two invited testifiers, one from DOR
and one from the Pacific Seafood Processors Association.
3:48:20 PM
CHAIR GIESSEL [announced invited testimony on SB 130].
3:48:49 PM
JULIE DECKER, President, Pacific Seafood Processors Association
(PSPA), Wrangell, Alaska, provided a brief overview of PSPA. She
said PSPA strongly supports SB 130. She said this legislation
would provide an incentive to Alaska seafood processors to
invest in new equipment to produce higher quality value-added
products in Alaska. She argued that this would provide long-term
economic benefits to the State of Alaska, coastal communities,
fishermen, and processors. She pointed out that SB 130 does not
change the current maximum value of the tax credit, which
remains capped at 50 percent of a processing company's Alaska
fisheries business tax. SB 130 would expand the types of
equipment and the species eligible for the tax credit. In
addition, it would facilitate a one-time private investment in
equipment that would continue to increase the quality and
utilization of each fish (and of associated value-added
products) year after year. This would increase the long-term
value of the fishery resource to all users (i.e. the State of
Alaska, communities, fishermen, and processors).
MS. DECKER said fish taxes are based on fish value; therefore,
SB 130 would provide increased returns to the State of Alaska
and communities. She pointed out that this legislation is
supported by a previous analysis by the McKinley Research Group,
which showed a return on investment of over 200 percent to the
state's general fund. She stated that the health of the seafood
industry is critical to Alaska, generating $6 billion in
economic activity each year. The seafood industry is the state's
largest manufacturing and export sector. She said that the
seafood industry lowers transportation costs for all Alaskans.
She stated that the seafood industry is facing historically
challenging economic conditions and offered data to illustrate
this. She said United States Department of Agriculture (USDA)
purchases of Alaska salmon and pollock and the ban on Russian
seafood have resulted in inventory stabilization. However, other
economic conditions have not significantly improved. She
emphasized the unknown risks related to trade and tariffs, which
may be significant. SB 130 would implement one of the near-term
recommendations of the Joint Legislative Task Force Evaluating
Alaska's Seafood Industry (ASTF). She stated that the task force
final report focuses on several near-term items within Alaska's
purview that would positively impact the fishing industry. She
said the primary understanding [of the report] is that lower
operating costs and increased product value are necessary for
change to occur. She reiterated that SB 130 would encourage a
one-time investment that would then increase the long-term value
of fishery resources.
3:52:51 PM
SENATOR DUNBAR asked how often processors reach the 50 percent
cap.
3:53:20 PM
MS. DECKER shared her understanding that the total tax credit is
$1 million to $3 million per year on average. She said that this
indicates that processors are either not taking advantage of the
tax credit or are not reaching the cap.
3:53:44 PM
SENATOR KAWASAKI noted that SB 130 would expand the tax credit
to any species and asked if there is a reason any fishery should
be excluded.
3:54:10 PM
MS. DECKER opined that, if the State of Alaska is interested in
increasing value through quality improvements and increasing
value-added processing (which generally leads to more jobs and
activity in the state), there is no reason to exclude any
fisheries. She further opined that extending the tax credit to
all fisheries would further those goals. She noted that the tax
credit already extends to the major state fisheries.
3:54:51 PM
SENATOR KAWASAKI asked whether all fisheries are equally
stressed.
3:55:15 PM
MS. DECKER rephrased the question. She asked if the question is
whether all fisheries are facing the same economic challenges.
3:55:29 PM
SENATOR KAWASAKI replied yes.
3:55:35 PM
MS. DECKER replied that not all fisheries are experiencing the
same economic challenges; however, in 2023, the economic
downturn impacted nearly all fisheries.
3:56:02 PM
MR. LAMKIN said the task force discussed various species at
length. He agreed that the tax credit was initially for salmon
only, and over time the legislature extended the credit to cod,
pollock, herring, and sable fish. He said some processors
operate in multiple fisheries and this can create difficulties
in determining where the tax credit would apply. Extending the
tax credit to all fisheries would avoid this issue.
Additionally, any new fisheries would be included, which would
encourage future investment and activity in those fisheries. He
indicated that expanding the tax credit to all fisheries would
create greater ease when new fisheries open.
3:57:51 PM
BRANDON SPANOS, Deputy Director, Tax Division, Department of
Revenue (DOR), Anchorage, Alaska, introduced himself and said he
is available for questions or to review the fiscal note from the
Department of Revenue, OMB Component Number 2476, dated March
28, 2025.
3:58:08 PM
SENATOR DUNBAR observed that committee members did not receive a
copy of the SB 130 Department of Revenue (DOR) fiscal note.
CHAIR GIESSEL asked Mr. Spanos to provide an overview of the DOR
fiscal note.
3:58:38 PM
MR. SPANOS apologized for the delay in releasing the fiscal
note. He directed attention to the fiscal note from the
Department of Revenue, OMB Component Number 2476, dated March
28, 2025. He said the fiscal note is indeterminate but has
average high and low scenarios on page 2. He explained that the
revenue impact is indeterminate because the changes in
utilization - and the impact of the economic downturn on future
investments - are unknown. He said DOR developed the average
high and low scenarios by scaling up existing fisheries product
development tax credit forecast. This accounts for the expansion
to all species and new equipment, beginning on January 1, 2025.
He explained that this also accounts for a three-year carry-
forward extension. He said the credit will be sunset in 2030 and
the fiscal note includes a 2031 date, as DOR anticipates 75
percent of the 2030 credit will be utilized in 2031 as a carry-
forward. He referred to page 2 of the fiscal note from the
Department of Revenue, OMB Component Number 2476, dated March
28, 2025, and noted the following impacts by fiscal year (FY):
2 Year Average Credit Utilization Rate Scenario (in
millions):
FY2026 - (1,010.0)
FY2027 - (1,040.0)
FY2028 - (2,060.0)
FY2029 - (3,090.0)
FY2030 - (4,120.0)
FY2031 - (3,770.0)
High Rate Adoption Scenario (in millions):
FY2027 - (1,120.0)
Low Rate Credit Scenario (in millions):
FY2027 - (950.0)
4:00:44 PM
SENATOR DUNBAR asked what types of taxes processors are
currently paying that would be impacted by SB 130. He shared his
understanding that this is 50 percent of total tax liability and
surmised that this would apply only to state taxes. He wondered
if SB 130 applies to corporate income taxes. In addition, he
asked about the total tax liability that those processors are
currently paying.
4:01:21 PM
MR. SPANOS replied that SB 130 applies to fisheries taxes and
does not apply to the corporate income tax. He said this would
apply to the fisheries business tax. He said it might also apply
to the fisheries resource landing tax and deferred to the Tax
Division for further clarification. He said he would follow up
with information on annual tax liability.
4:01:59 PM
CHRIS BECKER, Lead Auditor, Tax Division, Department of Revenue
(DOR), Anchorage, Alaska, clarified that the credit only applies
to the fisheries business tax. He said that, in FY2024, the
total tax before credits was $35 million. He contrasted this
with the $51 million in FY2023.
4:02:22 PM
SENATOR DUNBAR commented that this is a remarkably low
utilization of tax credits relative to other industries. He
noted FY2023 totals of $51 million and recalled that tax credit
claims average $1 million to $3 million per year. He
acknowledged that businesses can only take half; however, there
would still be $25 million in available tax credits. He surmised
that the low utilization is related to the limited application
of the credit.
4:03:20 PM
CHAIR GIESSEL held SB 130 in committee.
SB 135-REFUND OF FISH BUSINESS TAX TO MUNIS
4:03:30 PM
CHAIR GIESSEL announced the consideration of SENATE BILL NO. 135
"An Act relating to the sharing of tax revenue from the
fisheries business tax and fishery resource landing tax with
municipalities; relating to municipal reports on the shared tax
revenue; and providing for an effective date."
4:03:52 PM
TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State
Legislature, Juneau, Alaska, said SB 135 is inspired by and
modeled after legislation that was introduced in 2012 and
relates to fisheries tax revenue sharing. He briefly discussed
the history of fisheries tax revenue sharing and explained that
the revenue split was originally 10/90 (with ten percent going
to local municipalities). He said the revenue sharing is
intended to support fisheries-related activities in coastal
communities (e.g. canneries). He stated the revenue share for
municipalities has increased twice, in 1979 (an increase to 20
percent) and in 1981 (an increase to the current share of 50
percent). He shared his understanding that municipalities
typically receive 50 percent in the form of a refund. He said
the fisheries business tax and the fisheries landing resource
tax are shared between municipalities and the State of Alaska.
In general, SB 135 would shift the split from 50/50 to 60/40
(with 60 percent going to municipalities). He emphasized that SB
135 does not change the tax level or the fisheries policies. He
said the intention of SB 135 is to begin discussions and there
is room for change. He pointed out that Joint Legislative Task
Force Evaluating Alaska's Seafood Industry (ASTF) considered
shifting the revenue so that municipalities received 100
percent. He surmised that the Senate Finance Committee would
discuss the fiscal impact at length. He noted that
representatives from the Department of Revenue and the Alaska
Municipal League (AML) would provide additional testimony.
4:06:54 PM
SENATOR HUGHES referred to page 2, paragraph 3 of the fiscal
note from the Department of Revenue (DOR), OMB Component Number
2476, dated March 28, 2025. She pointed out that, according to
the fiscal note, the revenue split between municipalities and
the state would range from 60-75 percent, depending on tax type
and processing location. She acknowledged that coastal
communities are struggling and indicated concern about
potentially decreasing the State of Alaska's revenue amounts.
She asked for additional information about range in the revenue
split.
4:07:28 PM
MR. LAMKIN replied that reading SB 135 and the sectional
analysis would be the most helpful way to understand those
changes. He explained that the split changes depending on
whether the local government falls withing a qualified
municipality, is an unorganized borough, etc. He said that he
did not do in-depth historical research on the origin of the
policies; however, he surmised that the politics of that time
impacted the structure of the current statute.
4:08:18 PM
CHAIR GIESSEL said that Department of Revenue (DOR) and
Department of Commerce, Community and Economic Development
(DCCED) representatives were available to answer questions.
4:08:37 PM
SENATOR HUGHES noted that it is a complicated issue and asked
whether DOR could speak to the potential revenue impact this
change would have on the State of Alaska.
4:08:49 PM
CHAIR GIESSEL pointed out that there was a fiscal note and
invited Mr. Spanos to provide additional information.
4:08:58 PM
BRANDON SPANOS, Deputy Director, Tax Division, Department of
Revenue (DOR), Anchorage, Alaska, said that the current
structure of the revenue share is simpler than the language in
SB 135. He expressed uncertainty regarding whether this was
intentional. He said the changes to the fisheries business tax -
including the 60-75 percent split - are different than the
fisheries development tax. He suggested that this may have been
an oversight. He explained that, currently, the statute includes
a 50/50 split for revenue sharing and said that, if the
intention is to create a 60/40 split, DOR could suggest amended
language options to achieve that goal. He explained that,
generally, this would give 30 percent each to the city and the
borough (if the city is in an organized borough), and the state
would receive 40 percent.
MR. SPANOS shared his understanding that, as currently written,
every case results in a 75/25 percent split. He explained that
75 percent would either go directly to local communities or to
the Department of Commerce, Community and Economic Development
(DCCED) to be shared out with local communities. He expressed
uncertainty with the allocation program of DCCED and surmised
that it is different from the way DOR would distribute the
revenue share. He referred to the fiscal note from the
Department of Revenue (DOR), OMB Component Number 2476, dated
March 28, 2025, and explained that the fiscal note assumes a
75/25 percent split. He said that in fiscal year (FY) 2026, this
would result in a negative budget impact of $12.3 million. He
said that amount would be appropriated in the current budget
year but would not be paid out until the following budget year.
In FY2031, there would be a negative budget impact of $16.8
million.
4:11:10 PM
SENATOR MYERS observed that SB 135 includes a stair step method
for new cities created within a borough but does not address new
boroughs created to encompass a city. He offered a hypothetical
example and asked if this also needs to be addressed.
4:11:49 PM
MR. LAMKIN deferred the question.
4:12:03 PM
MR. SPANOS expressed uncertainty. He said the stair step method
is in current statute and SB 135 would change the amount
communities receive, depending on how long each has been
incorporated. He deferred the question.
4:12:30 PM
CHRIS BECKER, Lead Auditor, Tax Division, Department of Revenue
(DOR), Anchorage, Alaska, said current statute does not address
new boroughs formed around cities.
4:12:51 PM
SENATOR MYERS observed that the impetus for the fisheries tax
revenue sharing is related to harbor maintenance. He noted that
those facilities were previously owned by the State of Alaska.
He pointed out that, according to the sponsor statement for SB
135, if municipalities are unable to maintain harbor facilities,
the harbor facility titles revert to the State of Alaska. He
asked whether any municipalities have requested to return harbor
ownership to the State of Alaska rather than making changes to
the revenue sharing structure.
4:13:43 PM
SENATOR STEVENS replied that he is not aware of any
municipalities making that request.
SENATOR MYERS wondered if this should be considered in the place
of changing the fisheries tax revenue sharing.
4:13:55 PM
SENATOR STEVENS replied that ASTF heard from many communities
that were highly impacted by the industry downturn. He noted
that some communities have lost their processors and there is no
way for the State of Alaska to help them. However, for other
small communities where processors remain, a small amount of
assistance would be highly impactful. He opined that some
communities have not yet realized the impact the industry
downturn will have. He said SB 135 is an attempt to help fishing
communities during a difficult time and added that the funds are
not limited to harbor maintenance.
4:14:55 PM
SENATOR KAWASAKI shared his understanding that the intention was
for municipalities to use the funds from revenue sharing on
related infrastructure improvements. He asked if this is how
municipalities ultimately used the revenues.
4:15:46 PM
MR. SPANOS asked to hear the question again.
4:15:51 PM
SENATOR KAWASAKI said the intent is for the money collected from
the landing tax to be distributed to communities that have
related ports, and for those communities to use the funds for
port maintenance and related infrastructure. He asked if DOR is
aware of how the money is spent or whether it is rolled into the
municipality's general fund.
4:16:27 PM
MR. SPANOS shared his understanding that current statute does
not specify that communities must spend the funds from revenue
sharing on fisheries infrastructure. He surmised that the
revenue is deposited into the municipality's general fund.
4:16:52 PM
MR. LAMKIN directed attention to SB 135, Section 8, page 4, and
said this would require municipalities to begin reporting how
they are spending monies from the fisheries business tax. He
then directed attention to SB 135, Section 15, page 8, which
contains a similar reporting requirement for the landing tax
fisheries monies.
4:17:27 PM
CHAIR GIESSEL noted that Alaska Municipal League (AML) would
also provide testimony on SB 135.
4:17:40 PM
SENATOR DUNBAR expressed interest in seeing what the reporting
requirement reveals and whether municipalities are spending the
funds on harbor maintenance. He argued that the State of Alaska
should not strictly regulate how the money is spent, as there
are many ways to make communities livable that would directly
benefit those in the fishing industry. He asked whether the
State of Alaska has always followed the revenue sharing formula
- or whether there have been times when the State of Alaska has
not paid out the full amount due to fiscal restrictions. He
wondered if the State is bound by the language - or whether the
money could be deposited into the State of Alaska's general fund
if needed.
4:18:58 PM
MR. SPANOS said that to his knowledge, the money has always been
appropriated to the designated fund, which has been shared with
the communities. He said that according to the [Shared Taxes and
Fees Annual Report], the State of Alaska distributed $16.17
million of fisheries business taxes to local communities. He
added that during the Covid-19 pandemic, the distribution
matched the previous year's share. He explained that during one
of those years, the legislature appropriated additional funds to
match the prior year's distribution.
4:20:03 PM
CHAIR GIESSEL announced invited testimony on SB 135.
4:20:24 PM
NILS ANDREASSEN, Executive Director, Alaska Municipal League,
Juneau, Alaska, read the following written testimony on SB 135:
[Original punctuation provided.]
Chair and members of the Senate Resources Committee,
Thank you for the opportunity to testify today. My
name is Nils Andreassen, and I am the Executive
Director of the Alaska Municipal League, representing
local governments across Alaska. We appreciate the
work of the Alaska Seafood Industry Task Force and the
thoughtful consideration of this bill, SB 135, which
reflects recommendations aimed at enhancing support
for coastal communities.
We are supportive of the intent of SB 135 to increase
the share of fisheries tax revenue distributed to
municipalities. This recognition of the important role
that local governments play in supporting the seafood
industry and providing services that benefit
fisheries-dependent communities is welcomed and
appreciated.
Alaska's coastal cities and boroughs are essential to
the operation and success of the state's seafood
industry. Local governments own and maintain the
majority of ports and harbors across the state,
managing critical infrastructure that enables the safe
and efficient movement of significant volumes of
seafood. Many of these facilities are aging and
require ongoing investment to ensure their continued
functionality and safety. The revenue provided through
fisheries taxes is essential for maintaining these
assets and supporting the broader network of services
and infrastructure that enable this industry to
thrive.
Further, the benefits of this revenue extend beyond
infrastructure maintenance. It supports emergency
services, transportation systems, housing, and other
community needs that directly and indirectly benefit
the seafood industry. For many of Alaska's
municipalities, fisheries-related revenue provides
essential funding that contributes to overall
community well-being and economic resilience. As you
work to move this bill forward, we would like to
respectfully raise a few points for consideration that
we believe would strengthen this legislation:
Not all recipients of fisheries tax revenue maintain
or operate harbor facilities. While we recognize the
importance of maintaining and improving these
facilities for the benefit of the seafood industry, a
requirement to allocate additional funds specifically
for this purpose may not be applicable or practical
for all local governments.
For instance, the business tax includes the
communities of Houston and Anderson, which aren't
coastal but where businesses are located that
contribute to the seafood industry. Another wrinkle to
consider is that while a borough like Kodiak Island
receives a share, it is the City of Kodiak that has
the port and harbor powers.
Flexibility in the use of these funds should be
considered to ensure all recipients can utilize them
in ways that best support their communities.
It is critical that this increase in revenue sharing
be seen as additive, rather than a replacement for
other forms of state investment. Local governments
depend on a predictable and reliable revenue stream to
meet their obligations and to provide services that
benefit the industry and community members alike. This
legislation should make clear that other forms of
state support are not to be diminished as a result.
4:23:51 PM
MR. ANDREASSEN continued to read from the following written
testimony on SB 135:
[Original punctuation provided.]
AML last surveyed port and harbor infrastructure
improvement needs in 2019 and identified $600 million
in needs. We will recreate that survey this year, but
the scale of need is important to evaluate and ensure
that together we are appropriately meeting the needs
of these communities relative to the industries
dependent on improvements.
Finally, we are concerned about the potential
administrative burden associated with the requirement
for annual reports. For many local governments,
particularly those that receive only a minimal amount
of revenue from this program, the cost of compliance
may exceed the benefit of the increased share. We
recommend the Committee consider ways to streamline
reporting requirements to ensure they are not
unnecessarily burdensome.
I noted payments of the fisheries business tax in FY
23 to two communities of $244 and $214 each. We have
to think about the increase involved and whether it
actually increases the ability for these communities
to improve facilities, or complete the annual report
to the Legislature that will now be necessary. Perhaps
there are alternatives to achieve this same goal.
The Alaska Municipal League and its members are
supportive of finding additional ways in which the
State may contribute to investments in coastal
communities, and we commend the Task Force and this
Committee for its consideration. We appreciate your
willingness to consider these suggested improvements
and look forward to continuing to work with you to
enhance this legislation for the benefit of not just
local governments, but the seafood industry that is
interdependent.
Thank you for your time and consideration. I am happy
to answer any questions you may have.
4:25:40 PM
SENATOR DUNBAR agreed that the reporting requirement is
excessive for communities that receive minimal amounts. He asked
about the maximum amount communities receive and wondered what a
reasonable cutoff would be. He wondered whether "$10 thousand or
more," or "$50 thousand or more" would be reasonable. He
acknowledged that keeping track of the funds is important;
however, he suggested that a report may be unnecessary for $240.
4:26:26 PM
MR. ANDREASSEN replied that he does not have those numbers;
however, he surmised that DOR would have that information. He
opined that each community should be allowed to determine the
appropriate cutoff. He emphasized that any increase in revenue
is positive for local governments. He noted that the funds are
used for a variety of community needs. He pointed out that
communities may have complicated harbor improvement and capital
improvement plans, along with other community needs. He
indicated that determining the distribution amount and the
reporting requirement cutoff could be complex and stated that
this should be based on the circumstances of each community. He
noted that SB 135 would increase the revenue share for use on
port and harbor maintenance and other infrastructure needs, and
all communities would receive an increase. However, he pointed
out that needs differ greatly by community. He stated that the
increased revenue share should be structured and disseminated in
a way that is responsive to the needs and resources of each
community.
4:28:12 PM
SENATOR DUNBAR acknowledged that communities have unique needs
and would prefer a more wholistic approach; however, he
indicated that choosing a specific cutoff may be necessary for
administrative simplicity. He pointed out that SB 135 is not
structured in a way that is responsive to each community's
needs. He commented that a more responsive approach to funding
could be found in the capital grant process, whereas SB 135
offers blanket community revenue-sharing. He argued that this
type of revenue sharing maintains more flexibility.
4:29:18 PM
MR. ANDREASSEN commented that a blanket increase is the fairest
way to distribute the funds. He pointed out that the ASTF report
recommends that 100 percent of the funds be distributed to the
local communities and suggested that this amount would create a
high bar. He clarified that AML is willing to work with the
committee and the legislature to ensure SB 135 is a right fit
for everyone involved. He said that many of the task force
recommendations are interdependent, and local governments have a
role in most of those recommendations. He emphasized the
importance of thinking about the recommendations wholistically.
He reiterated that AML appreciates SB 135 and is willing to be a
part of those conversations as the legislation moves forward.
4:31:09 PM
SENATOR STEVENS expressed appreciation for Mr. Andreassen's
comments. He reiterated that two communities have lost their
local processors and receiving a larger share of the tax would
not provide an advantage to those communities. He opined that it
makes sense for the communities to use those funds as they see
fit. He acknowledged the challenges that coastal communities
will face in the coming years. He indicated that it would be
reasonable to deposit the funds into each community's general
fund and allow communities to decide where those funds are most
needed.
4:32:07 PM
CHAIR GIESSEL held SB 135 in committee.
HJR 11-RECOGNIZING ALASKA/CANADA RELATIONSHIP
4:32:37 PM
CHAIR GIESSEL announced the consideration of CS FOR HOUSE JOINT
RESOLUTION NO. 11(RES) am Recognizing and honoring the
relationship between Canada and Alaska.
4:32:55 PM
REPRESENTATIVE CHUCK KOPP, District 10, Alaska State
Legislature, Junea, Alaska, said HJR 11 presents a unified voice
of restoration and reconciliation among allies, at a time when
trade restrictions have challenged that relationship. He
emphasized that this is not related to partisan and/or
ideological questions. Rather, HJR 11 addresses the historical
and present-day ties between Alaska and Canada. He briefly
discussed the historical Alaska-Canada relationship and
emphasized the importance of that relationship for Alaska's
access to the Lower 48. He acknowledged the important
relationship indigenous communities have with the land in both
Alaska and Canada. He recalled that Alaska and Canada worked
together during World War II to build the Alaska-Canada Highway.
He emphasized the importance of the highway for both Alaska and
Canada. He discussed the important connection between Alaskan
and Canadian communities and highlighted shared sporting events.
He listed the many industries that utilize the Alaska-Canada
Highway as well as industries that rely on ports in both
countries.
4:35:00 PM
REPRESENTATIVE KOPP said HJR 11 highlights the importance of the
trade partnership between Alaska and Canada. He noted that
Alaska exports $596 million to Canada and imports $753 million
annually from Canada. He emphasized that Alaska depends on its
connection to Canada for connection to critical supply chains
and offered examples, including food and fisheries. He said
Alaska's oil and mining industries are tied to Canadian
investments. He pointed out that more than 23,000 Alaskan jobs
are connected to Canadian trade and over 47 Canadian-owned
businesses operate within Alaska.
4:36:55 PM
REPRESENTATIVE KOPP highlighted the historic role the Alaska-
Canada relationship plays in defense and security. He pointed
out that Alaska is home to North American Aerospace Defense
Command (NORAD) and highlighted Canada's role in protecting
North America's airspace after the terrorist attacks on
September 11, 2001. He said Alaska and Canada depend on border
access during wildfire season. He emphasized that both countries
are sensitive to the impact of weather shutdowns, and pointed
out that shared roads ensure that fuel and other critical
supplies reach communities in need. He stated that Alaska and
Canada are mutual guardians of the Arctic, ensuring responsible
development and maintaining community resilience. He opined that
both Alaskans and Canadians understand the importance of strong
communities for both the arctic region and the nation. He
concluded by highlighting the importance of relationships,
neighbors, and partnerships during times of global uncertainty.
He opined that maintaining a positive relationship with Canada
reaches beyond simple policy and reflects the Alaskan spirit.
4:38:38 PM
CHAIR GIESSEL noted that the committee would consider the
explanation of changes at an upcoming hearing to allow time for
invited and public testimony.
4:38:54 PM
CHAIR GIESSEL announced invited testimony on HJR 11.
4:39:14 PM
RANJ PILLAI, Premier of Yukon Territory, Canada, Whitehorse,
Yukon Territory, Canada, introduced himself and briefly
discussed the impact of upcoming tariffs imposed by the United
States on Canada, and recent constructive conversations between
President Trump and Prime Minister Carney. Those conversations
included an agreement to begin negotiations related to a new
economic and security relationship between the US and Canada. He
shared that the prime minister has held meetings with premiers
to discuss the impacts of the upcoming tariffs and a potential
response.
PREMIER PILLAI said the Yukon has also been considering its
economic and security relationship with the US. He stated that
Alaskans and Yukoners share similar challenges and common goals.
Those goals include improving the lives of citizens and
promoting responsible economic development. However, he stated
that Canadians feel their economy and national sovereignty are
now at risk. He referenced the length of the Alaska-Canada
border. He highlighted the long history of cross-border trade in
the Northern region, from indigenous trade routes to the
construction of the Alaska-Canada Highway. He emphasized the
important role the Alaska-Canada Highway plays in the economies
of both Alaska and Yukon.
4:41:38 PM
PREMIER PILLAI posited that impeding the cross-border movement
of people and goods is a detriment to both Alaskans and
Yukoners. He said Alaskans and Yukoners support each other
through difficult times and shared examples. He highlighted the
Northwest Wildland Fire Protection Agreement (Northwest Compact)
and the Agreement on Cooperation on Aeronautical and Maritime
Search and Rescue in the Arctic (Arctic Search and Rescue
Agreement). He pointed out that the Yukon International Airport
is an important transit point for the United States Airforce, as
well as an emergency refueling and landing location. In
addition, many sporting events rely on participants from both
Alaska and Yukon.
4:42:55 PM
PREMIER PILLAI pointed out that many businesses in both Alaska
and Yukon depend on cross-border tourism. He emphasized the
negative impact of tariffs. He argued that tariffs, along with
threats to Canada's economic and national sovereignty, have
created chaos, challenges, and disruptions for people and
businesses in both Canada and the US. He stated that tariffs are
ultimately passed on to citizens in both countries. He
highlighted the importance of the North American Free Trade
Agreement (NAFTA) and the United States-Canada-Mexico Agreement
(USMCA).
4:43:34 PM
PREMIER PILLAI referenced HJR 11 and affirmed that a continued
alliance between Alaska and Canada would positively impact the
lives of citizens in both countries well into the future. He
urged members to stand up for Alaskan jobs, workers, and
businesses that rely on Canadian trade. He stated that both
Alaska and Yukon must continue to stand up for their citizens
and economies. He stated that Canada would continue to protect
its citizens and communities, standing up for its sovereignty
and building up its defense capacity as an arctic nation. He
asserted that Canada will never be the 51st state. He concluded
by emphasizing that Canada's response to tariffs, and its
efforts to protect its economy and sovereignty, are not a
reflection of Canada's feelings toward Americans. He expressed
positive feelings and support for Americans and a desire to
continue working together.
4:44:53 PM
CHAIR GIESSEL concurred with Premier Pillai's testimony and
expressed her support for Canada.
4:45:18 PM
SENATOR HUGHES noted Premier Pillai's testimony that President
Trump and Prime Minister Carney have begun negotiations and
asked when the next meeting would occur.
4:45:36 PM
PREMIER PILLAI clarified that negotiations have not begun. He
explained that federal elections are underway in Canada and
negotiations would likely begin once elections have concluded on
April 28, 2025. He surmised that Canada would issue a
significant response to the tariffs in the coming days.
4:46:49 PM
MATT MORRISON, Executive Director, Pacific NorthWest Economic
Region (PNWER), Seattle, Washington, said Alaska has been a
founding member of PNWER since 1991. He gave a brief overview of
PNWER. He opined that the relationship between Canada and Alaska
is significant and urged support for HJR 11. He briefly
discussed the formation of the PNWER Arctic Caucus, which meets
annually in Washington D.C. to discuss the importance of the
arctic. He noted that HJR 11 includes mention of the Shakwak
Road and opined that this is important. He said it is important
to ensure passage along the Alaska-Canada highway is not reduced
or restricted. He stated that PNWER supported securing the
Rebuilding American Infrastructure with Sustainability and
Equity (RAISE) grant for Shakwak Road. PNWER does not want
Shakwak Road to lose that funding. He emphasized the importance
of maintaining the security of all shared transportation routes
(land, sea, and air).
4:49:22 PM
MR. MORRISON shared a quote from President Kennedy to illustrate
the importance of cross-border alliances. He said all past
presidents of PNWER have issued a joint statement supporting the
Alaska-Canada relationship, which he will provide to the
committee. He reiterated that Alaska is an important member of
PNWER and expressed appreciation for HJR 11. He emphasized the
importance of the Alaska-Canada alliance and opined that it
extends beyond culture to encompass friendship, family, and
relationships that tie communities together.
4:51:12 PM
SENATOR HUGHES referred to an article from the Yukon News dated
March 27, 2025, which stated the RAISE funding for Shakwak Road
has been paused. She asked if this is correct.
4:51:31 PM
MR. MORRISON expressed uncertainty. He suggested that a pause
does not indicate the funding will be withdrawn.
4:52:08 PM
JOHN RODDA, Vice President, Arctic Winter Games International
Committee, Anchorage, Alaska, emphasized the value of sports and
cultural exchange between Alaska and Canada. He highlighted the
Arctic Winter Games as a foundation for cross-border youth
engagement, cooperation, and cultural celebration. He offered a
brief historical overview of the Arctic Winter Games. He posited
that the 50-year duration of the games is evidence of the
enduring partnership between Alaska, Yukon, and Northwest
Territories. He gave a brief overview of the Arctic Winter Games
competition, which has evolved to include 7 permanent partners
and is now the premier circumpolar event for northern youth. He
emphasized that, through the games, participants forge lasting
relationships and foster understanding that extends across
borders. He noted that Alaska has hosted the Arctic Winter games
several times and the next event will be held in Whitehorse,
Yukon in 2026. He emphasized the importance of sports in
Alaska's long-standing relationship with Canada.
4:55:45 PM
SARAH FRAMPTON, Executive Director, Arctic Winter Games Team
Alaska (AWGTA), Fairbanks, Alaska, expressed support for HJR 11
and stated that Alaska's relationship with Canada extends beyond
geography to neighborly support and friendship. She briefly
discussed the ways in which Alaskan and Canadian history,
values, and daily lives are interconnected. She pointed out that
Alaskans and Canadians face similar challenges and offered
examples to illustrate instances of cross-border cooperation.
MS. FRAMPTON emphasized that the Alaska-Canada relationship
supports a variety of youth sporting events, such as the Arctic
Winter Games. She stated that the next Arctic Winter Games event
will be held in Whitehorse, Yukon. She explained that Team
Alaska will send 355 youth athletes, coaches, and staff to
represent Alaska during that event. She briefly discussed the
Arctic Winter Games, which celebrate shared culture, northern
identity, and the unifying power of sports. She stated that the
positive impact on youth is lifelong and offered examples. She
briefly discussed the benefits of the games, which honor
indigenous traditions and highlight cultural diversity while
instilling values of sportsmanship, leadership, and pride.
4:57:40 PM
MS. FRAMPTON emphasized that the strength of the Arctic Winter
Games - and the positive impact the event has on those who
participate - is dependent on the strong relationship Alaska has
with its northern neighbors. She highlighted Alaska's
relationship with Canada and expressed confidence that Yukon
will welcome Team Alaska's athletes as both competitors and
friends. She opined that the sense of belonging, shared
heritage, and mutual respect deserves to be honored and
protected. She noted that the Arctic Winter Games unite regions
across the circumpolar north. She stated that, while the
athletes come from different cultures, they meet on the playing
field as equals, friends, and future leaders. She briefly
discussed how HJR 11 recognizes that friendship and acknowledges
that Alaska and Canada are partners, collaborators, and northern
citizens working toward a common future. She opined that HJR
shows that Alaska is dedicated to investing in future
generations by supporting these life-changing, cross-cultural
opportunities.
4:59:11 PM
CHAIR GIESSEL concluded invited testimony on HJR 11.
4:59:15 PM
CHAIR GIESSEL opened public testimony on HJR 11.
4:59:31 PM
MIKE COONS, representing self, Wasilla, Alaska, testified in
opposition to HJR 11. He expressed support for HJR 11, page 2,
lines 5-8. He said that President Trump would impose reciprocal
tariffs on Canada. He briefly discussed a previous version of
HJR 11. He said the president has the authority to impose
tariffs. He briefly discussed the various ways the United States
(US) has addressed Canadian tariffs and the relationship between
Canada and the US. He said he would welcome a resolution in
support of President Trump and his negotiations with Canada.
5:01:25 PM
CHAIR GIESSEL closed public testimony on HJR 11.
5:01:58 PM
CHAIR GIESSEL held HJR 11 in committee.
5:02:46 PM
There being no further business to come before the committee,
Chair Giessel adjourned the Senate Resources Standing Committee
meeting at 5:02 p.m.