I was very pleased to see that the State is stepping up to help Southeast in economic stabilization and expansion through the following financial programs this session. On the final day of the extended legislative session, the Alaska State Legislature passed Senate Bill 99 which includes three provisions of significant importance to the economy of Southeast Alaska. It authorizes the state to provide financing for the Blue Lake Hydroelectric Project in Sitka as well as two mining projects on Prince of Wales Island – the Bokan-Dotson Ridge mine and the Niblack mine. All three of these provisions were inserted as amendments to Senate Bill 99 which was originally introduced as a bill making technical changes to the Sustainable Energy Transmission and Supply Fund within the Alaska Industrial Development and Export Authority (AIDEA).
Moments before Senate Bill 99 passed the House, an amendment was inserted without objection for the Blue Lake Hydroelectric Project authorizing the Alaska Energy Authority to approve up to $18,600,000 in loans from the power project fund to the City and Borough of Sitka for the financing of this project. It will give the City and Borough of Sitka more options to access low interest loans needed to complete construction with the least amount of burden on the utility rates paid by the residents and businesses in Sitka.
I proposed the two amendments for the mining projects when Senate Bill 99 was in the Senate Labor and Commerce Committee. The amendment for the Bokan-Dotson Ridge mine allows AIDEA to issue up to $145,000,000 in bonds to finance the surface infrastructure of this rare earth element project located on Prince of Wales Island. This project represents an unsurpassed opportunity for Alaska to furnish materials of critical importance to the United States military and green energy technology. Additionally, this project is important for the much needed jobs it will create in Southeast Alaska. During the estimated one and a half years of construction, the onsite workforce will peak at about 300 employees. During operations there will be about 190 employees.
The amendment for the Niblack mine project allows AIDEA to issue up to $125,000,000 in bonds to finance the Gravina Island Industrial Complex near Ketchikan for an ore processing facility. Niblack is a gold, copper, zinc, and silver deposit located on Prince of Wales Island. During mine operations, Niblack has the potential to provide 200 full-time jobs, with about two-thirds of workers at the mine site and one-third at the processing facility.
Over the past 20 years, Southeast Alaska’s economy has shrunk about 30-percent due to the loss of our timber industry. This has set off a ripple effect in our communities, hurting everything from schools to local businesses. These two mining projects offer a very large employment opportunity for Southeast Alaska and will expand our economy beyond fishing, tourism and government, to include mining. This state assistance through the issuance of AIDEA bonds replicates a financing structure that has already proven to work with other mining projects like the Red Dog Mine.
Another bill that I was pleased to see pass before the Legislature adjourned and which I cosponsored was Senate Bill 71 regarding the payment of fisheries resource landing tax. That bill passed on the 90th day of the session and includes an amendment extending the product development tax credit for salmon and herring products. The program has been in place since 2003 and without this extension, it would have expired on December 31st, 2015. This is an important incentive for the commercial salmon and herring industry and because of it we have seen increased product diversity, increased state revenues from the fisheries business tax, and increased permit prices. The tax credit applies to investment in new property that meets requirements for value-added processing of salmon and herring products. The amendment added to Senate Bill 71 extends this credit until 2020.
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