Legislature(2001 - 2002)
04/11/2001 01:44 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 154
An Act relating to security for the payment of fishery
business taxes and to payment of estimated fisheries
resource landing taxes and penalties.
REPRESENTATIVE DREW SCALZI, stated that in recent years, the
fishing industry has seen the development of fish "brokers"
who like e-commerce businesses, facilitate or broker
interstate commerce between parties without actually
handling the product. Because the brokers export the
product, they are subject to the fisheries business tax.
However, some businesses may have a small working capital
and may not possess "real" property of lien-able value
against which a tax may be collected, should the business
default.
Presently, absent a lien-able value of property equal to
three times the amount of the estimated tax, a surety bond
must be paid equal to twice the estimated amount of the tax.
He commented that the cost of the bond is a burden to a
company operating on a small margin.
Representative Scalzi maintained that the bill would amend
the statutes by offering an additional option so that
applicants may avoid posting a bond for twice the amount of
the estimated taxes if the business:
· Remits all tax obligations on a monthly basis by
th
paying the taxes due on or before the 15 day of
the month following the month in which the tax
liability was incurred;
· Files a bond in the amount of $50,000; or
· Provides the Department with proof that the
applicant is the owner of lien-able real property
in the State of a value of at least $100,000
dollars.
Representative Scalzi stated that the bill would reduce the
operating costs of fish broker businesses, facilitates
competition and increased markets for fishermen, while
ensuring a measure of security for fish business taxes.
Representative Lancaster inquired how many applicants would
be affected. Representative Scalzi estimated that three
business would be affected. He enumerated that there are
two or three in the halibut and sablefish market alone in
the Homer and Seward area that would be affected. He
suspected that there would be many smaller operators that
the legislation would not affect.
Representative Croft asked the difference between Sections
1, 2 & 3. Representative Scalzi did not know, however,
th
noted that they do cite the 15 of each month, taken the
Administrative Code. Representative Croft commented that
each appears to be a different type of fish tax.
Vice-Chair Bunde questioned if the proposed legislation
would fall under "special interest" legislation.
Representative Scalzi acknowledged that the legislation
would pertain to a small group of "entrepreneurs". He
emphasized that area of business is new and growing and
should be encouraged.
NEAL SLOTNICK, DEPUTY COMMISSIONER, DEPARTMENT OF REVENUE,
offered to answer questions of the Committee.
CHUCK HALAMERT, SECTION CHIEF, TAX DIVISION, DEPARTMENT OF
REVENUE, referenced that Section C was the alternate
methodology for the security for that type of fisheries
business. It tends to mimic the existing security with one
additional option.
Representative Croft requested taxes be identified from
Sections 1-3. Mr. Halamert replied that AS 16.51 is the
Seafood Marketing tax in the amount of .3%. He continued,
AS 43.76 is part of the Salmon tax, and AS 43.77.020 is the
landing tax.
Representative Croft noted that AS 43.77 contained both the
tax component and the amount that needed to be collected.
Mr. Halamert agreed. He noted that some are paid and some
are collected.
Representative Scalzi added that under the Individual
Fishery Quota (IFQ) system, the fisherman cannot be a direct
fish seller without proper authorization from the National
Marine Fisheries Service.
Representative Lancaster MOVED to report CS HB 154 (FSH) out
of Committee with individual recommendations and with the
accompanying fiscal note.
Representative Davies asked who would be excluded in the
reference on the bottom of Page 2. Mr. Halamert explained
that language was used to prevent an existing taxpayer from
establishing an existing company and obtaining a license to
buy fish.
There being NO OBJECTION, it was so ordered.
CS HB 154 (FSH) was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note by
Department of Revenue dated 3/22/01.
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