Memorandum 17-032 Shared Fisheries Business Tax

Memorandum 17-032

TO:                         MAYOR BRYAN ZAK & HOMER CITY COUNCIL

CC:                         KATIE KOESTER, CITY MANAGER

FROM:                  BRYAN HAWKINS, PORT DIRECTOR/HARBORMASTER

DATE:                    FEBRUARY 21, 2017

SUBJECT:           SHARED FISHERIES BUSINESS TAX, RESOLUTION 17-018

Background:

The City of Homer receives revenue from the State of Alaska for fish tax collected by the State in two different methods.  The Department of Revenue distributes “Raw Fish Tax” from licensed seafood processors, floating processors and seafood exporters to eligible municipalities.  The City of Homer’s share received 12/2016 was $20,455.84.  The share for 2015 was $24,183.52.  These funds are allocated to Fish Dock Revenues.

The second method the City of Homer receives fish tax revenue is through the Alaska Department of Commerce, Community, and Economic Development (ADCCED).  ADCCED receives 50% of the undistributed Raw Fish Tax from the Department of Revenue to distribute through a program known as the Shared Fisheries Business Tax Program.  The purpose of this program is to provide for a sharing of state fish tax collected outside municipal boundaries with municipalities that have been affected by fishing industry activities.   For the Cook Inlet Fisheries Management Area, which the City of Homer is part of, the amount to be distributed in FY 2017 is $44,083.27.  Twelve communities will receive a portion of that amount with the City of Homer estimated to receive $2,066.86.  A  Resolution from Homer City Council is required annually to receive these funds. 

The twelve communities are Municipality of Anchorage, Homer, Kachemak, Kenai, Kenai Peninsula Borough, Seldovia, Seward, Soldotna, Mat Su Borough, Houston, Palmer and Wasilla.  With the new addition of the last four listed (Mat Su Borough, Houston, Palmer and Wasilla), the City of Homer’s application and Resolution will be different than previous years. The fisheries management areas where the program allocation is less than $4,000 multiplied by the number of municipalities require a short form application.  In our area, the threshold value equals $48,000, (12 municipalities x $4,000) or more than the total distribution of $44,083.27 so a short form application and Resolution are required.  These four additional communities were added this year for the first time.  The Juneau office of ADCCED explained that fisherman living in these communities reported they fished in areas that fell into FMA 14.  If these communities do not apply by the deadline of March 17, 2017, then the funds will be reallocated to communities that did apply.

Recommendation:

Approve Resolution 17-018.

Attached:  Shared Fisheries Business Tax Fisheries Management Area Cook Inlet Distribution FY 2017