1997-03-06                     House Journal                      Page 0557
HB 176                                                                       
HOUSE BILL NO. 176 by the House Rules Committee by request of                  
the Governor, entitled:                                                        

1997-03-06                     House Journal                      Page 0558
HB 176                                                                       
An Act relating to a salmon product development and marketing                 
tax credit under the Alaska fisheries business tax and the Alaska              
fisheries resource landing tax; and providing for an effective date.           
                                                                               
was read the first time and referred to the House Special Committee            
on Fisheries, the Resources and Finance Committees.                            
                                                                               
                                                                               
The following fiscal note applies:                                             
                                                                               
Fiscal note, Dept. of Revenue, 3/6/97                                          
                                                                               
The Governor's transmittal letter, dated March 5, 1997, appears below:         
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
World supplies of salmon have more than doubled in the past decade.            
Farmed salmon has been aggressively marketed to displace Alaska                
salmon in several domestic and international markets.  To meet this            
challenge and increase demand for Alaska salmon, we must expand our            
markets by diversifying the products we offer to our customers and             
stepping-up our marketing efforts.  This legislation was recommended           
by participants at the Salmon Industry Forum my Administration held            
recently.  It is designed to promote both of these goals while                 
simultaneously increasing the value of the resource to all industry            
participants, including ex-vessel prices paid to fishermen.  This will,        
in turn, expand employment opportunities in the production of value-           
added products in Alaska.                                                      
                                                                               
This bill, part of my Alaska Business Investment Incentive Plan,               
provides a tax credit against a companys fisheries business tax (raw           
fish tax) for the purchase of processing equipment that is used in             
Alaska to produce value-added salmon products.  The credit would               
only apply to equipment that would process salmon beyond a headed              
and gutted product, excluding canned salmon.  In addition, the bill            
attempts to assist with clearing one of the mightiest hurdles                  
entrepreneurs face--successful marketing of a new product--by                  
extending the raw fish tax credits to marketing efforts for new Alaska         
salmon products.                                                               
                                                                               

1997-03-06                     House Journal                      Page 0559
HB 176                                                                       
Tax credits would not exceed  50% of a company's salmon tax liability          
and could not be used to fund more than 50% of an expenditure. The             
credit would be available for the 1997, 1998 and 1999 tax years with           
a two-year carry-forward through 2001.  These coming years will be,            
perhaps, the most critical years the Alaska salmon industry has ever           
faced.                                                                         
                                                                               
This legislative proposal is designed to be very surgical.  It is not a tax    
holiday; it is a hand-up to those Alaska salmon businesses that are            
taking on a tremendous risk and expense in developing new and                  
innovative products, so that more people will eat Alaska salmon.               
Ensuring the salmon industry is equipped to meet the challenges of the         
world marketplace will pay big dividends to Alaskas economic future.           
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor