txt

SB 130: "An Act relating to a seafood product development tax credit; providing for an effective date by repealing secs. 32 and 35, ch. 61, SLA 2014; and providing for an effective date."

00                             SENATE BILL NO. 130                                                                         
01 "An Act relating to a seafood product development tax credit; providing for an effective                                
02 date by repealing secs. 32 and 35, ch. 61, SLA 2014; and providing for an effective date."                              
03 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA:                                                                
04    * Section 1. AS 43.75.035(b) is amended to read:                                                                   
05            (b)  The amount of the tax credit applied against taxes under this section may                               
06       not                                                                                                               
07                 (1)  exceed 50 percent of the taxpayer's tax liability incurred under this                              
08       chapter for processing of salmon, [AND] herring, pollock, and cod during the tax                          
09       year; or                                                                                                          
10                 (2)  be claimed for property first placed into service after December 31,                               
11       2025 [2020].                                                                                                  
12    * Sec. 2. AS 43.75.035(c) is amended to read:                                                                      
13            (c)  If the property for which a tax credit is claimed is installed on a vessel, the                         
14       amount of qualified investment under (a) of this section is determined by multiplying                             
01 the investment cost of the qualified investment property by a fraction, the numerator                                   
02 of which is the weight of raw salmon, [OR] raw herring, raw pollock, or raw cod                                 
03 processed on the vessel by the taxpayer in the state in the tax year in which the                                       
04 property is first placed into service, and the denominator of which is the weight of raw                                
05 salmon, [OR] raw herring, raw pollock, or raw cod processed on the vessel by the                                
06 taxpayer in and outside of the state in the tax year in which the property is first placed                              
07       into service.                                                                                                     
08    * Sec. 3. AS 43.75.035(d) is amended to read:                                                                      
09 (d)  An unused credit under this section may be carried forward and applied                                             
10 against the tax liability incurred on salmon, [AND] herring, pollock, and cod in the                            
11       following three tax years.                                                                                        
12    * Sec. 4. AS 43.75.035(e) is amended to read:                                                                      
13 (e)  Qualified investment costs upon which a tax credit is claimed under this                                           
14 section may not be considered for another tax credit in this title. [A TAX CREDIT                                       
15 APPLIED UNDER THIS SECTION MAY NOT EXCEED 50 PERCENT OF THE                                                             
16 TAXPAYER'S TAX LIABILITY INCURRED FOR THE PROCESSING OF                                                                 
17       SALMON DURING THE TAX YEAR.]                                                                                      
18    * Sec. 5. AS 43.75.035(g) is amended to read:                                                                      
19 (g)  If, during a tax year, property for which a credit was claimed under this                                          
20 section is disposed of by the taxpayer, ceases to be qualified investment property, or is                               
21 removed from service in the state, the tax due under this chapter is increased by the                                   
22 recapture percentage of the aggregate decrease in the credit allowed under this section                                 
23 for all prior tax years that would have resulted solely from reducing to zero the credit                                
24 allowed for the qualified investment property under this section. The amount of tax                                     
25 credit attributable to the qualified investment that is carried forward from prior tax                                  
26 years is terminated as of the first day of the tax year in which the qualified investment                               
27 property is disposed of by the taxpayer, ceases to be qualified investment property, or                                 
28       is removed from service in the state. For purposes of this subsection,                                            
29 (1)  the recapture percentage during the year in which the property is                                                  
30 first placed into service or during the first year following the year in which the                                      
31       property is first placed into service is 100 percent;                                                             
01                 (2)  the recapture percentage during the second year following the year                                 
02       in which the property is first placed into service is 75 percent;                                                 
03                 (3)  the recapture percentage during the third year following the year in                               
04       which the property is first placed into service is 50 percent;                                                    
05                 (4)  the recapture percentage during the fourth or subsequent year                                      
06       following the year in which the property is first placed into service is zero percent;                            
07 (5)  qualified investment property used on a vessel is considered to                                                    
08 have been removed from the state on the first day of a tax year in which the proportion                                 
09 of raw salmon, [OR] raw herring, raw pollock, or raw cod processed in the state on                              
10 the vessel is less than 50 percent of total weight of raw salmon, [OR] raw herring, raw                         
11       pollock, or raw cod processed on the vessel in and outside of the state.                                      
12    * Sec. 6. AS 43.75.035(j)(3) is amended to read:                                                                   
13 (3)  "qualified investment" means the investment cost to purchase or                                                    
14 convert depreciable tangible personal property with a useful life of three years or more                                
15 to be used predominantly to perform an ice making, processing, packaging, or product                                    
16 finishing function that is a significant component in producing value-added salmon,                                 
17 [OR] herring, pollock, or cod products, including canned salmon products in can sizes                               
18       other than 14.75 ounces or 7.5 ounces; in this paragraph, "property"                                              
19                      (A)  includes                                                                                      
20 (i)  equipment used to fillet, skin, portion, mince, form,                                                              
21 extrude, stuff, inject, mix, marinate, preserve, dry, smoke, brine,                                                     
22 package, freeze, scale, grind, separate meat from bone, or remove pin                                                   
23                 bones;                                                                                                  
24 (ii)  new parts necessary for, or costs associated with,                                                                
25 converting a canned salmon line to produce can sizes other than 14.75                                                   
26                 ounces or 7.5 ounces;                                                                                   
27 (iii)  conveyors used specifically in the act of producing                                                              
28                 a value-added salmon, [OR] herring, pollock, or cod product;                                    
29                           (iv)  ice making machines;                                                                    
30                           (v)  new canning equipment for herring products; and                                          
31 (vi)  equipment used to transform salmon, [OR] herring,                                                         
01 pollock, or cod byproduct that is discarded as waste into saleable                                                  
02                 product;                                                                                                
03                      (B)  does not include                                                                              
04 (i)  vehicles, forklifts, conveyors not used specifically in                                                            
05 the act of producing a value-added salmon, [OR] herring, pollock, or                                            
06 cod product, cranes, pumps, or other equipment used to transport                                                    
07 salmon, [OR] herring, pollock, or cod, or salmon, [OR] herring,                                         
08 pollock, or cod products, knives, gloves, tools, supplies and materials,                                            
09 equipment, other than ice making machines, that is not processing,                                                      
10 packaging, or product finishing equipment, or other equipment, the use                                                  
11 of which is incidental to the production, packaging, or finishing of                                                    
12                 value-added salmon, [OR] herring, pollock, or cod products;                                     
13 (ii)  the overhaul, retooling, or modification of new or                                                                
14 existing property, except for new parts necessary for, or costs                                                         
15 associated with, converting a canned salmon line to produce can sizes                                                   
16                 other than 14.75 ounces or 7.5 ounces; or                                                               
17 (iii)  property used predominantly to produce a salmon,                                                             
18 [OR] herring, pollock, or cod product that is not taxed under this                                                  
19                 chapter;                                                                                                
20    * Sec. 7. AS 43.75.035(j)(6) is amended to read:                                                                   
21 (6)  "value-added salmon, [OR] herring, pollock, or cod product"                                                
22 means the product of a salmon, [OR] herring, pollock, or cod that is processed beyond                           
23 heading, gutting, or separation in a manner that enhances the value or quality of the                                   
24 salmon, [OR] herring, pollock, or cod product, such as shelf-stable, retort pouched,                            
25 smoked, pickled, or filleted salmon, herring, pollock, or cod, ikura, leather, jerky, or                            
26 a saleable product made from waste byproduct of salmon, [OR] herring, pollock, or                               
27 cod; "value-added salmon, [OR] herring, pollock, or cod product" does not include a                         
28 salmon, [OR] herring, pollock, or cod or salmon, [OR] herring, pollock, or cod                          
29       product that                                                                                                      
30 (A)  has been subjected to only one or more of heading, gutting,                                                        
31            freezing, or packaging;                                                                                      
01                      (B)  is salmon skeins or other unprocessed salmon, [OR]                                        
02            unprocessed herring, unprocessed pollock, or unprocessed cod product,                                    
03            [PRODUCTS] whether fresh or frozen; or                                                                       
04                      (C)  is produced outside [OUT] of the state.                                                   
05    * Sec. 8. AS 43.75.035 and 43.75.130(f) are repealed January 1, 2026.                                              
06    * Sec. 9. Section 3, ch. 57, SLA 2003, and secs. 22, 27, and 29, ch. 61, SLA 2014, are                             
07 repealed.                                                                                                               
08    * Sec. 10. The uncodified law of the State of Alaska is amended by adding a new section to                         
09 read:                                                                                                                   
10       APPLICABILITY. AS 43.75.035(b) - (e), (g), and (j), as amended by secs. 1 - 7 of                                  
11 this Act, apply to pollock and cod processed on or after January 1, 2021.                                               
12    * Sec. 11. Section 7, ch. 57, SLA 2003, sec. 4, ch. 3, SLA 2006, sec. 4, ch. 8, SLA 2008,                          
13 sec. 3, ch. 102, SLA 2010, secs. 32 and 35, ch. 61, SLA 2014, and sec. 16, ch. 69, SLA 2014,                            
14 are repealed.                                                                                                           
15    * Sec. 12. This Act takes effect January 1, 2021.