The Department of Community and Economic Development (Commerce) administers a program to share taxes collected from fishery resources with eligible municipalities. The money shared under this program is collected by Department of Revenue and a share is then transferred to Commerce for distribution to eligible municipalities. The purpose of the program is to help municipalities impacted by the effects of the fish processing industry by sharing fish taxes.

The Department of Revenue (DOR), Tax Division, collects fisheries business taxes, fishery resource landing taxes, salmon marketing tax, and other seafood taxes from licensed seafood processors, floating processors, and seafood exporters. DOR also administers the Raw Fish Tax Program, which shares fisheries taxes generated within incorporated municipalities. For the most part, we will be limiting our discussion in this document to the programs administered by Commerce.

How do these programs work?

Under the provisions of the Shared Fisheries Business Tax Program, Department of Revenue (DOR) collects the money from fisheries business license fees and taxes under the provisions of AS 43.75.011-.290 and distributes it directly to eligible municipalities using a formula spelled out in AS 43.75.130. Once this allocation is made, DOR provides 50% of any revenue not transferred to eligible municipalities to Commerce. This is distributed to eligible municipalities that demonstrate significant effects from fisheries business under the provisions of AS 29.60.450.

Under the Fisheries Resource Landing Tax statutes (AS 43.77.010-200), DOR collects a landing tax on floating fisheries business and distributes it directly to eligible municipalities according to the formula spelled out in AS 43.77.060. Once this allocation is made, 50% of the funds not distributed by DOR to eligible municipalities are also transferred to Commerce for distribution to eligible municipalities.

Which municipalities are eligible to receive funding?

In order to receive funding from Commerce under the provisions of AS 29.60.450, a municipality must demonstrate that it suffered significant effects as a result of fisheries business activities that occurred within its respective fisheries management area.

What are the application deadlines?

By September 1 of each application year the Commerce distributes applications (Short Form or Long Form) to those municipalities eligible to participate in the program (3 AAC 134.090(b)). Completed applications must be submitted to the Department by December 15 of the application year (3 AAC 134.090(e)). Application year is defined in 3 AAC 134.160(2).

How much money is distributed annually?

The amount of money available to distribute is based upon fisheries business and fishery resource landing taxes collected during the program base year as defined in 3 AAC 134.160(11). Essentially, the tax is levied against fishery resources processed or landed two years before. For example, FY 02 payments were based on taxes collected in FY 01 for fish that were processed or landed during calendar year 2000.

When are Shared Fisheries Business Tax and Fishery Resource Landing Tax payments made?

Payments are usually made in January or February of each fiscal year. 3 AAC 134.130 requires that Commerce evaluate the Long Form applications and mail a notice of their determination of significant effects by February 15 following submission of the application.

What can Shared Fisheries Business Tax and Fishery Resource Landing Tax payments be used for?

A municipality must use its payment to help reduce the effects of fisheries business activities on the municipality, which may include the expenses of any municipal service (AS 29.60.450.)

Payments to municipalities under the Shared Fisheries Business Tax and Fishery Resource Landing Tax Programs are determined in a two-stage process.

First Stage: Under the first stage, the total available funding is allocated among the 19 established fisheries management areas (FMAs) using existing commercial fisheries boundaries. The first stage allocation for the Shared Fisheries Business Tax Program is based upon the percentage of pounds of fish and shellfish processed within a given FMA, compared to the total pounds of fish and shellfish processed in the whole state during a calendar year. For example, if a FMA had processed 10% of the total pounds of fish and shellfish processed in the whole state, then that area would receive 10% of the total funding available for that fiscal year. The first stage allocation for the Fishery Resource Landing Tax Program is based upon the ratio of the management area's fishery resource landing tax production value to the total fishery resource landing tax production value for all of the management areas.

Second Stage: Under the second stage, payments to the municipalities within a FMA are determined under one of two methods. If the total available funding for a FMA is less than the value determined by multiplying the number of municipalities in the FMA by $4,000, then one-half of the allocation is divided equally among the eligible municipalities in that area. The other half of the area allocation is then distributed based upon the population of each eligible municipality. This is known as the Short Form application. Under the Short Form application, a municipality may demonstrate that it suffered significant effects from fisheries business activities through an approved resolution of the municipality's governing body.

If the total available funding for a FMA is equal to or more than the value determined by multiplying the number of municipalities in the FMA by $4,000, then the municipalities must apply under the Long Form application. Within the Long Form application are two application methods, standard and alternative. Under the standard method, each municipality within the FMA must determine and document the cost of fisheries business impacts experienced by the municipality. Once the impacts have been reviewed and approved by Commerce, one-half of the allocation is divided equally among the eligible municipalities in that area and the remaining half is based upon the relative dollar amount of impacts in each municipality. Under the alternative method, the municipalities within the FMA may propose alternative allocation methods. The Department may approve the use of a proposed alternative method only if all the municipalities in the FMA agree to the alternative method and the method includes some measure of the relative effects of the fishing industry on the respective municipalities in the FMA.

Applications:

• FY 02 Long-form application and sample resolution
• FY 02 Short-form application and sample resolution

Publications:

• FY 02 Shared Fisheries Business Tax Program and Fishery Resource Landing Tax payments
• FY 01 Department of Revenue Shared Taxes Annual Report

Internet Links:

• Department of Revenue, Tax Division, Fisheries Tax
• Commerce, Fisheries Management Areas (FMA) Map
• Commerce, Revenue Sharing Programs
• Alaska Legislature "Folio Infobase" - The Current Alaska Statutes
• Alaska Legislature "Folio Infobase" - The Alaska Administrative Code
• Alaska Department of Law
• Fish Tax Payments

AS 29.60.450 - authorizes receipt of shared fish taxes, allocation method, authorized uses, definitions

See The Current Alaska Statutes:

• AS 43.75.011 - fisheries business licensing requirement, penalty for failure to get a license
• AS 43.75.015 - fisheries resource being taxed, amount of tax
• AS 43.75.016 - exclusions from tax
• AS 43.75.018 - tax credit for cash contributions
• AS 43.75.020 - license application and fee
• AS 43.75.030 - filing return and tax payment
• AS 43.75.032 - tax credit for scholarships
• AS 43.75.055 - security, lienable real property, bond
• AS 43.75.100 - fish taken outside taxing jurisdiction
• AS 43.75.110 - tax return, payment of tax, records
• AS 43.75.130 - refund to local governments, allocation, calculation of tax credits, payment to city within newly incorporated borough
• AS 43.75.133 - information request on tax reported within a municipality, review of records, confidentiality
• AS 43.75.137 - shared fish tax payment to Commerce for distribution under AS 29.60.450
• AS 43.75.290 - definitions
• AS 43.77.010-.020 - fishery resource landing tax, obligations, payments, filing return
• AS 43.77.030-.045 - tax credit for scholarship, approved, and education credits
• AS 43.77.050 - accounting
• AS 43.77.060-070 - revenue sharing, allocation method, transfer to Commerce, regulations
• AS 43.77.200 - definitions

See The Alaska Administrative Code:

• 3 AAC 134.010 - Purpose
• 3 AAC 134.020 - Objective
• 3 AAC 134.030 - Delegation of authority
• 3 AAC 134.040 - Eligibility requirements
• 3 AAC 134.050 - Statewide apportionments, fisheries management areas
• 3 AAC 134.060 - Allocation within areas
• 3 AAC 134.070 - Alternative allocation method within areas
• 3 AAC 134.080 - Municipal population determination
• 3 AAC 134.090 - Application procedures
• 3 AAC 134.100 - Long-form application
• 3 AAC 134.110 - Alternative method application
• 3 AAC 134.120 - Short-form application
• 3 AAC 134.130 - Evaluation of long-form application
• 3 AAC 134.140 - Long-form application appeal procedure
• 3 AAC 134.150 - Allocation calculations
• 3 AAC 134.160 - Definitions

Revised 10/1/02