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."
00HOUSE BILL NO. 176 01 "An Act relating to a salmon product development and marketing tax credit 02 under the Alaska fisheries business tax and the Alaska fisheries resource landing 03 tax; and providing for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. FINDINGS AND PURPOSE. (a) Alaska's salmon industry is a vital element 06 in the economy of the state and although Alaska salmon is one of the premiere food 07 commodities in the world, an enormous increase in the world supply of salmon in recent years 08 has caused significant decreases in the market value of Alaska salmon. This situation 09 threatens investments and livelihoods in the salmon industry and related businesses, and 10 negatively affects Alaska's state and local economies. Improving Alaska's competitive 11 position in salmon markets will take more than traditional marketing of traditional salmon 12 products. 13 (b) The purpose of this Act is to encourage industry to invest in the production and 14 marketing of new value-added salmon products to improve the marketability of Alaska salmon
01 through diversification of product forms. This diversification would expand and open markets 02 for Alaska salmon, thus helping to achieve goals of increasing the world market share for 03 Alaska salmon, profits for the processing sector, ex-vessel prices for harvesters, benefits for 04 related economic sectors, and revenue to the state and to local governments. 05 * Sec. 2. AS 43.75 is amended by adding a new section to read: 06 Sec. 43.75.035. Salmon product development and marketing tax credit. 07 (a) A taxpayer that is a fisheries business may claim a salmon product development 08 and marketing tax credit of 50 percent of 09 (1) qualified investment in new property first placed into service in a 10 shore-based plant or on a vessel in the state in the tax year; and 11 (2) eligible marketing costs expended in the tax year. 12 (b) The tax credit claimed under this section may not 13 (1) exceed 50 percent of the taxpayer's tax liability incurred under this 14 chapter for salmon; 15 (2) be applied for property used in or marketing costs to promote 16 canning operations; or 17 (3) be applied for investment or marketing costs incurred after 18 December 31, 1999. 19 (c) If the property for which a tax credit is claimed is installed on a vessel, 20 the amount of qualified investment under (a) of this section is determined by 21 multiplying the investment cost of qualified investment property by a fraction the 22 numerator of which is the weight of raw salmon processed by the taxpayer in Alaska 23 and the denominator of which is the weight of raw salmon processed by the taxpayer 24 in and outside of Alaska in the tax year. 25 (d) An unused credit under this section may be carried forward and applied 26 against the tax liability incurred on salmon in the following three tax years. 27 (e) Qualified investment or marketing costs upon which a tax credit is claimed 28 under this section may not be considered for any other tax credit in this title. 29 (f) A taxpayer may not claim the tax credit allowed under this section if the 30 taxpayer is in arrears in the payment of contributions under AS 23.20 or a tax under 31 this title. For purposes of this subsection, a taxpayer is not in arrears if the
01 contribution or tax liability is under administrative or judicial appeal. 02 (g) In this section 03 (1) "brand name" means copyrighted intangible property such as a 04 trademark or trade name; 05 (2) "eligible marketing costs" means the following direct costs incurred 06 in the marketing of salmon products by brand name: consumer and trade 07 advertisements, promotional materials, packaging design and materials, product 08 samples, point of sale materials, slotting fees, retail demonstrations, focus group 09 consumer research, trade show booths, coupon redemptions, and promotional discounts; 10 "eligible marketing costs" do not include costs for travel, payroll, general 11 administration, or overhead; 12 (3) "first placed into service" means the moment when property is first 13 used for its intended purpose; 14 (4) "new property" means property whose original use commences with 15 the taxpayer and does not include property first used by any other person; 16 (5) "qualified investment" means an investment cost in the following 17 depreciable tangible personal property with a useful life of three years or more to be 18 used to produce value-added salmon products, excluding canned salmon, after the 19 heading and gutting of the salmon: filleting, skinning, portioning, mincing, forming, 20 extruding, stuffing, injecting, mixing, marinating, preserving, drying, smoking, brining, 21 packaging, blast freezing, and pin bone removal equipment; 22 (6) "state" includes the state and federal waters to 200 miles seaward 23 from Alaska; 24 (7) "tax liability" means the liability for all taxes under this chapter 25 before all credits allowed by this chapter; 26 (8) "useful life" means the useful life of the property that is or would 27 be applicable for purposes of depreciation. 28 * Sec. 3. AS 43.77 is amended by adding a new section to read: 29 Sec. 43.77.037. Salmon product development and marketing tax credit. 30 (a) A taxpayer under this chapter may claim a salmon product development and 31 marketing tax credit of 50 percent of
01 (1) qualified investment in new property first placed into service on a 02 vessel in the state in the tax year; and 03 (2) eligible marketing costs expended in the tax year. 04 (b) The tax credit claimed under this section may not 05 (1) exceed 50 percent of the taxpayer's tax liability incurred under this 06 chapter for salmon first landed in the state; 07 (2) be applied for property used in or marketing costs to promote 08 canning operations; or 09 (3) be applied for investment or marketing costs incurred after 10 December 31, 1999. 11 (c) The amount of qualified investment under (a) of this section is determined 12 by multiplying the investment cost of qualified investment property by a fraction the 13 numerator of which is the weight of salmon landed by the taxpayer in Alaska and the 14 denominator of which is the weight of salmon landed by the taxpayer in and outside 15 Alaska in the tax year. 16 (d) An unused credit under this section may be carried forward and applied 17 against the tax liability incurred on salmon landed in the following three tax years. 18 (e) Qualified investment or marketing costs upon which a tax credit is claimed 19 under this section may not be considered for any other tax credit in this title. 20 (f) A taxpayer may not claim the tax credit allowed under this section if the 21 taxpayer is in arrears in the payment of contributions under AS 23.20 or a tax under 22 this title. For purposes of this subsection, a taxpayer is not in arrears if the 23 contribution or tax liability is under administrative or judicial appeal. 24 (g) In this section 25 (1) "brand name" means copyrighted intangible property such as a 26 trademark or trade name; 27 (2) "eligible marketing costs" means the following direct costs incurred 28 in the marketing of salmon products by brand name: consumer and trade 29 advertisements, promotional materials, packaging design and materials, product 30 samples, point of sale materials, slotting fees, retail demonstrations, focus group 31 consumer research, trade show booths, coupon redemptions, and promotional discounts;
01 "eligible marketing costs" do not include indirect costs, such as travel, payroll, and 02 general administrative costs or overhead; 03 (3) "first placed into service" means the moment when property is first 04 used for its intended purpose; 05 (4) "new property" means property whose original use commences with 06 the taxpayer and does not include property first used by any other person; 07 (5) "qualified investment" means an investment cost in the following 08 depreciable tangible personal property with a useful life of three years or more to be 09 used to produce value-added salmon products, excluding canned salmon, after the 10 heading and gutting of the salmon: filleting, skinning, portioning, mincing, forming, 11 extruding, stuffing, injecting, mixing, marinating, preserving, drying, smoking, brining, 12 packaging, blast freezing, and pin bone removal equipment; 13 (6) "state" includes the state and federal waters to 200 miles seaward 14 from Alaska; 15 (7) "tax liability" means the liability for all taxes under this chapter 16 before all credits allowed by this chapter; 17 (8) "useful life" means the useful life of the property that is or would 18 be applicable for purposes of depreciation. 19 * Sec. 4. AS 43.75.035 and AS 43.77.037 are repealed. 20 * Sec. 5. Sections 1 - 3 of this Act are retroactive to January 1, 1997. 21 * Sec. 6. If the attorney general provides notification under sec. 7(2) of this Act, sec. 4 of 22 this Act is retroactive to January 1, 1997. 23 * Sec. 7. Sections 1 - 3 and 5 of this Act take effect immediately under AS 01.10.070(c). 24 * Sec. 8. Section 4 of this Act takes effect the earlier of the following: 25 (1) January 1, 2003; or 26 (2) the attorney general's notification to the lieutenant governor and to the 27 revisor of statutes that 28 (A) a court has entered final judgment that AS 43.75.035 or 29 AS 43.77.037, enacted by secs. 2 and 3 of this Act, violate the commerce clause 30 contained in art. I, sec. 8, of the United States Constitution; and 31 (B) the time for any appeal of that judgment has expired, or, if an
01 appeal was taken, a final order on the appeal has been entered that AS 43.75.035 or 02 AS 43.77.037, as enacted by secs. 2 and 3 of this Act, violate the commerce clause 03 contained in the United States Constitution. 04 * Sec. 9. If sec. 6 of this Act takes effect, it takes effect on the date of the attorney 05 general's notification under sec. 8(2) of this Act.