Legislature(2005 - 2006)CAPITOL 124

05/07/2005 09:30 AM House RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Continued from Friday 5/6/05 --
-- Please Note Time --
+= SB 164 SALMON PRODUCT DEVELOPMENT TAX CREDIT TELECONFERENCED
Moved Out of Committee
+= SB 102 COASTAL MANAGEMENT PROGRAMS TELECONFERENCED
Moved HCS CSSB 102(RES) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                          May 7, 2005                                                                                           
                           9:38 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Jay Ramras, Co-Chair                                                                                             
Representative Ralph Samuels, Co-Chair                                                                                          
Representative Jim Elkins                                                                                                       
Representative Carl Gatto                                                                                                       
Representative Gabrielle LeDoux                                                                                                 
Representative Kurt Olson                                                                                                       
Representative Paul Seaton                                                                                                      
Representative Harry Crawford                                                                                                   
Representative Mary Kapsner                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
SENATE BILL NO. 102                                                                                                             
"An Act relating to district coastal management programs; and                                                                   
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED HCS CSSB 102(RES) OUT OF COMMITTEE                                                                                 
                                                                                                                                
SENATE BILL NO. 164                                                                                                             
"An Act relating to the salmon product development tax credit;                                                                  
providing for an effective date by amending an effective date in                                                                
sec. 7, ch. 57, SLA 2003; and providing for an effective date."                                                                 
                                                                                                                                
     - MOVED CSSB 164(FIN) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: SB 102                                                                                                                  
SHORT TITLE: COASTAL MANAGEMENT PROGRAMS                                                                                        
SPONSOR(S): SENATOR(S) STEVENS G                                                                                                
                                                                                                                                
02/14/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
02/14/05       (S)       CRA, RES                                                                                               
03/14/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
03/14/05       (S)       Heard & Held                                                                                           
03/14/05       (S)       MINUTE(CRA)                                                                                            
03/16/05       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
03/16/05       (S)       Moved CSSB 102(CRA) Out of Committee                                                                   
03/16/05       (S)       MINUTE(CRA)                                                                                            
03/18/05       (S)       CRA     RPT     CS           1DP     3NR                                                               
                         NEW TITLE                                                                                              
03/18/05       (S)       NR: STEVENS G, WAGONER, STEDMAN                                                                        
03/18/05       (S)       DP: ELLIS                                                                                              
03/18/05       (S)       FIN REFERRAL ADDED AFTER RES                                                                           
04/06/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/06/05       (S)       -- Testimony <Invitation Only> --                                                                      
04/22/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/22/05       (S)       Moved CSSB 102(RES) Out of Committee                                                                   
04/22/05       (S)       MINUTE(RES)                                                                                            
04/25/05       (S)       RES     RPT     CS           4DP     2NR                                                               
                         NEW TITLE                                                                                              
04/25/05       (S)       DP: WAGONER, SEEKINS, STEDMAN, STEVENS                                                                 
                         B                                                                                                      
04/25/05       (S)       NR: ELTON, DYSON                                                                                       
05/02/05       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
05/02/05       (S)       <Bill Hearing Postponed>                                                                               
05/03/05       (S)       FIN       RPT      CS       5DP      1NR                                                               
                         NEW TITLE                                                                                              
05/03/05       (S)       DP: WILKEN, GREEN, HOFFMAN, DYSON,                                                                     
                         STEDMAN                                                                                                
05/03/05       (S)       NR: OLSON                                                                                              
05/03/05       (S)       MOVED TO BOTTOM OF CALENDAR                                                                            
05/03/05       (S)       FIN CS ADOPTED Y11 N6 E1 A2                                                                            
05/03/05       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
05/03/05       (S)       Moved CSSB 102(FIN) Out of Committee                                                                   
05/03/05       (S)       MINUTE(FIN)                                                                                            
05/05/05       (S)       TRANSMITTED TO (H)                                                                                     
05/05/05       (S)       VERSION: CSSB 102(FIN) AM                                                                              
05/05/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/05/05       (H)       RES, FIN                                                                                               
05/06/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
05/06/05       (H)       Heard & Held                                                                                           
05/06/05       (H)       MINUTE(RES)                                                                                            
05/07/05       (H)       RES AT 9:30 AM CAPITOL 124                                                                             
05/07/05       (H)       FIN AT 2:00 PM HOUSE FINANCE 519                                                                       
                                                                                                                                
BILL: SB 164                                                                                                                  
SHORT TITLE: SALMON PRODUCT DEVELOPMENT TAX CREDIT                                                                              
SPONSOR(S): SENATOR(S) STEDMAN                                                                                                  
                                                                                                                                
04/06/05       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/06/05       (S)       RES, FIN                                                                                               
04/15/05       (S)       RES AT 3:30 PM BUTROVICH 205                                                                           
04/15/05       (S)       Moved  SB 164 Out of Committee                                                                         
04/15/05       (S)       MINUTE(RES)                                                                                            
04/18/05       (S)       RES RPT  3DP 1DNP 1NR 2AM                                                                              
04/18/05       (S)       AM: WAGONER, ELTON                                                                                     
04/18/05       (S)       DP: STEDMAN, STEVENS B                                                                                 
04/18/05       (S)       DP W/AMENDMENTS: DYSON                                                                                 
04/18/05       (S)       DNP: SEEKINS                                                                                           
04/18/05       (S)       NR: GUESS                                                                                              
04/28/05       (S)       FIN AT 9:00 AM SENATE FINANCE 532                                                                      
04/28/05       (S)       Moved CSSB 164(FIN) Out of Committee                                                                   
04/28/05       (S)       MINUTE(FIN)                                                                                            
04/29/05       (S)       FIN     RPT     CS           3DP     2NR                                                               
                         SAME TITLE                                                                                             
04/29/05       (S)       DP: GREEN, HOFFMAN, DYSON                                                                              
04/29/05       (S)       NR: WILKEN, OLSON                                                                                      
05/02/05       (S)       TRANSMITTED TO (H)                                                                                     
05/02/05       (S)       VERSION: CSSB 164(FIN)                                                                                 
05/03/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/03/05       (H)       RES, FIN                                                                                               
05/04/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
05/04/05       (H)       -- Meeting Canceled --                                                                                 
05/06/05       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
05/06/05       (H)       Scheduled But Not Heard                                                                                
05/07/05       (H)       RES AT 9:30 AM CAPITOL 124                                                                             
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
TIM BARRY, Staff                                                                                                                
to Senator Bert Stedman                                                                                                         
Alaska State Legislature                                                                                                        
POSITION STATEMENT: Presented SB 164 on behalf of Senator Bert                                                                  
Stedman, sponsor.                                                                                                               
                                                                                                                                
STEPHANIE MATTSON, Vice President                                                                                               
Pacific Seafood Processors Association (PSPA)                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 164.                                                                             
                                                                                                                                
REED STOOPS                                                                                                                     
Ocean Beauty Seafood                                                                                                            
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of SB 164.                                                                             
                                                                                                                                
JERRY BURNETT, Special Assistant to the Commissioner                                                                            
Department of Revenue                                                                                                           
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Answered questions regarding SB 164.                                                                        
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CO-CHAIR  RALPH  SAMUELS  called  the  House  Resources  Standing                                                             
Committee meeting,  which had  been recessed  on 5/6/05,  back to                                                               
order at  9:38:06 AM.   Representatives Samuels,  Kapsner, Gatto,                                                             
Elkins, Crawford, Ramras, LeDoux,  Olson, and Seaton were present                                                               
at the call back to order.                                                                                                      
                                                                                                                                
SB 102-COASTAL MANAGEMENT PROGRAMS                                                                                            
                                                                                                                                
CO-CHAIR  SAMUELS  announced that  the  first  order of  business                                                               
would  be  SENATE BILL  NO.  102  "An  Act relating  to  district                                                               
coastal  management  programs;  and providing  for  an  effective                                                               
date."                                                                                                                          
                                                                                                                                
CO-CHAIR  RAMRAS  moved  to  adopt  HCS  CSSB  102,  labeled  24-                                                               
LS0941\N, Bullock, 5/6/05,   as a working document.   There being                                                               
no objection, it was so ordered.                                                                                                
                                                                                                                                
CO-CHAIR  SAMUELS   explained  the   changes  in   the  committee                                                               
substitute (CS).   He said page 12,  line 31 of the  CS gives the                                                               
Department of  Natural Resources (DNR)  two years to  revisit the                                                               
ABC list; page 13 eliminates  the specific list of what districts                                                               
are to review;  and Section 22 moves the  legislative review date                                                               
to May 10, 2006.                                                                                                                
                                                                                                                                
9:39:50 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said the purpose  of his previous amendment                                                               
(Amendment  1) was  to "make  sure that  before the  coastal zone                                                               
plan expires  we are back  in session and  have 45 days,  so that                                                               
the legislature  is not cut out  of the program.   Upon examining                                                               
Section 22 later, we have that  problem because that's what we do                                                               
again in this section, and this  is where we should have made the                                                               
change from January 1 to March 1,  so that we have 45 days to act                                                               
instead of this happening when we're not in session."                                                                           
                                                                                                                                
The committee took an at-ease from 9:41:19 AM to 9:41:47 AM.                                                                
                                                                                                                                
REPRESENTATIVE SEATON  said he wanted  his requested  changes put                                                               
on the record  and considered as the bill goes  forward.  He said                                                               
to change  "January" to "March" on  lines 22 and 23,  and on line                                                               
25, change "July" to "May" so the governor has time to act.                                                                     
                                                                                                                                
CO-CHAIR  RAMRAS  moved  to  report HCS  CSSB  102,  labeled  24-                                                               
LS0941\N,  Bullock,  5/6/05,  out of  committee  with  individual                                                               
recommendations and  the accompanying fiscal notes.   There being                                                               
no objection, HCS CSSB 102(RES) passed out of committee.                                                                        
                                                                                                                                
The committee took an at-ease from 9:43:09 AM to 9:43:49 AM.                                                                
                                                                                                                                
SB 164-SALMON PRODUCT DEVELOPMENT TAX CREDIT                                                                                  
                                                                                                                                
CO-CHAIR  SAMUELS  announced that  the  final  order of  business                                                               
would  be SENATE  BILL NO.  164 "An  Act relating  to the  salmon                                                               
product development  tax credit; providing for  an effective date                                                               
by amending  an effective date in  sec. 7, ch. 57,  SLA 2003; and                                                               
providing for an effective date."                                                                                               
                                                                                                                                
TIM  BARRY,   Staff  to  Senator   Bert  Stedman,   Alaska  State                                                               
Legislature,  said  SB  164  extends   the  deadline  for  salmon                                                               
processors in Alaska to receive  a salmon product development tax                                                               
credit.  Currently, processors can  claim the credit for property                                                               
placed into service by the end  of this calendar year, and SB 164                                                               
extends it  by three years.   He said the legislation  also makes                                                               
minor changes to  clarify what is eligible for the  tax credit to                                                               
more  effectively   achieve  the  goal  of   encouraging  seafood                                                               
processors to develop innovative, value-added salmon products.                                                                  
                                                                                                                                
MR. BARRY  stated that the  original legislation was  proposed by                                                               
the  Joint Legislative  Salmon Industry  Task Force  to encourage                                                               
industry  to   take  investment  risks  to   produce  new  salmon                                                               
products.  It was drafted  in consultation with the Department of                                                               
Revenue to ensure efficiency and effectiveness, he added.                                                                       
                                                                                                                                
9:45:55 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON asked about the date on page 3, line 16.                                                                  
                                                                                                                                
MR. BARRY  said the January 1,  2012 date reflects the  fact that                                                               
people have three years to make a claim.                                                                                        
                                                                                                                                
CO-CHAIR SAMUELS asked for examples of past claims.                                                                             
                                                                                                                                
STEPHANIE  MATTSON, Vice  President,  Pacific Seafood  Processors                                                               
Association (PSPA), said PSPA represents  a majority of the major                                                               
seafood processors in  Alaska, and it supports SB  164 because it                                                               
helps the  industry in  marginal revenue times.   She  said three                                                               
processors have  used the credit to  put in new filet  lines, and                                                               
freezing capacity has  been increased.  Some  processors spoke in                                                               
recent hearings of fuller utilization  in terms of fish oils, she                                                               
noted.   The task force put  this idea forward because  a similar                                                               
white fish tax credit was successful.   She said the extension is                                                               
needed because it took time to get the regulations final.                                                                       
                                                                                                                                
REED STOOPS, Ocean Beauty Seafood,  Juneau, said Ocean Beauty has                                                               
eight plants  in Alaska  and handles more  salmon than  any other                                                               
processor, and it  supports the bill.  The  Excursion Inlet plant                                                               
now produces pink  salmon burgers, and it vacuum  packs filets to                                                               
produce  a higher  value product,  he noted.   As  a result,  the                                                               
company added  40 new seasonal  jobs, and the price  to fishermen                                                               
is going up.  He said the  credit means doing this work in Alaska                                                               
instead  of elsewhere  or  not at  all.   He  concluded that  the                                                               
company has future opportunities in its other Alaska plants.                                                                    
                                                                                                                                
9:51:18 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CRAWFORD asked  how  much the  credits have  been                                                               
worth, so far.                                                                                                                  
                                                                                                                                
JERRY BURNETT, Special Assistant  to the Commissioner, Department                                                               
of Revenue, Juneau, said the  credits cost about $1.75 million as                                                               
a direct  reduction in taxes.   But if  the fish are  worth more,                                                               
taxes are higher, and he said  it's difficult tell how much value                                                               
is added, but SB 164 should generate net positive revenue.                                                                      
                                                                                                                                
9:52:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON asked about  equipment purchased for salmon                                                               
production and then used for other products.                                                                                    
                                                                                                                                
MR. BURNETT said he is not aware of that occurring.                                                                             
                                                                                                                                
MR. BARRY  said SB  164 tries to  clarify exactly  what qualifies                                                               
for the credit, but dual use has not been a problem.                                                                            
                                                                                                                                
9:53:59 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved to report  CSSB 164(FIN), labeled 24-                                                               
LS0589\S  out of  committee with  individual recommendations  and                                                               
the accompanying  fiscal notes.   There being no  objection, CSSB
164(FIN) was passed out of committee.                                                                                           
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no further business before the committee, the House                                                                 
Resources Standing Committee meeting was adjourned at 9:54 AM.                                                                

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