HB 402: "An Act providing for a Cook Inlet watershed water quality monitoring project tax credit under the Alaska Net Income Tax Act; and providing for an effective date."
00HOUSE BILL NO. 402 01 "An Act providing for a Cook Inlet watershed water quality monitoring project 02 tax credit under the Alaska Net Income Tax Act; and providing for an effective 03 date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. FINDINGS AND PURPOSE. (a) The legislature finds that 06 (1) the state's watersheds are valuable resources that warrant careful study and 07 monitoring, and that on-going water quality monitoring projects throughout the state should 08 be encouraged; 09 (2) the effectiveness of an incentive program for private industry to establish 10 voluntary water quality monitoring can be determined by a five-year program limited to one 11 geographic region; 12 (3) the Cook Inlet watershed is unique and valuable, and that Alaskans benefit 13 from the multiple uses of this watershed; 14 (4) scientific study of the Cook Inlet watershed will help to ensure that future
01 generations will enjoy continued benefits from the watershed; 02 (5) understanding of the watershed will be greatly enhanced by additional 03 information regarding water quality and factors affecting water quality; 04 (6) additional water quality monitoring will provide a public benefit; 05 (7) private industry is in a position to assist state government in acquiring 06 water quality information; and 07 (8) a single private entity has little incentive to invest in a voluntary water 08 quality monitoring project in the Cook Inlet watershed. 09 (b) The purpose of this Act is to provide the incentive to private industry to conduct 10 necessary monitoring beyond that required for compliance purposes by providing a tax credit 11 against the Alaska net income tax for an investment in a qualified water quality monitoring 12 project in the Cook Inlet watershed. 13 * Sec. 2. AS 43.20 is amended by adding a new section to article 1 to read: 14 Sec. 43.20.048. Cook Inlet watershed water quality monitoring project 15 credit. (a) A taxpayer may claim a tax credit of 60 percent of its qualified 16 expenditures in the state in a year beginning after December 31, 1998 and before 17 January 1, 2004 for a qualified Cook Inlet watershed water quality monitoring project 18 that was in operation in the state after December 31, 1998 and before January 1, 2004, 19 as evidenced in a certification of qualified expenditures for the project issued to the 20 taxpayer by the Department of Environmental Conservation under AS 46.03.095. 21 (b) The tax credit allowed under this section, in combination with any carry 22 forward of unused credit under (c) of this section, 23 (1) may not exceed the lesser of $100,000 or 50 percent of the 24 taxpayer's tax liability, per year; and 25 (2) notwithstanding any other provision of this title, shall be taken 26 before all other credits allowed by this title. 27 (c) An unused tax credit under this section may be carried forward and applied 28 against the taxpayer's tax liability in a subsequent tax year, except that the unused 29 credit may not be carried forward to a tax year beginning after December 31, 2006. 30 (d) Expenditures for which a credit is claimed under this section may not be 31 considered for any other credit under this title.
01 (e) A taxpayer in arrears in the payment of a tax levied in this title or in any 02 payment required by AS 23.20 or AS 23.30 is not entitled to a credit under this 03 section. For purposes of this subsection, a taxpayer is not in arrears if the payment 04 is under an administrative or judicial appeal or is the subject of judicial action. 05 * Sec. 3. AS 46.03 is amended by adding a new section to read: 06 Sec. 46.03.095. Certification of qualified expenditures for Cook Inlet 07 watershed water quality monitoring projects. (a) For purposes of the tax credit 08 allowed under AS 43.20.048, a corporation may apply to the department for 09 certification of qualified expenditures by the corporation in the preceding year for a 10 qualified Cook Inlet watershed water quality monitoring project. With the application, 11 the corporation shall submit verification, as required by the department, that the 12 (1) project is a qualified project under (c) of this section; 13 (2) expenditures for which certification is sought were qualified 14 expenditures; and 15 (3) project operations were begun in the state after December 31, 1998 16 and before January 1, 2004. 17 (b) The department shall issue to an applicant corporation a certification of 18 qualified expenditures for a project if the department determines that 19 (1) the project is a qualified project under (c) of this section; 20 (2) the corporation's expenditures for which certification is sought were 21 qualified expenditures; and 22 (3) project operations were begun in the state after December 31, 1998 23 and before January 1, 2004. 24 (c) For purposes of this section, a project is a qualified project if 25 (1) the department approved the project's design before the project's 26 implementation; 27 (2) the project will contribute information identified as being necessary 28 by the water quality monitoring plan for the Cook Inlet watershed maintained by the 29 department or the project provides other monitoring determined necessary by the 30 department; 31 (3) the department determines that the project consisted entirely or
01 primarily of water quality monitoring not required by a statute, regulation, lease, 02 stipulation, permit, court or administrative order, or other legal requirement; 03 (4) all water quality monitoring under the project was conducted using 04 generally accepted quality control procedures as approved by the department; 05 (5) the corporation has agreed to treat all information generated by the 06 project as public information, subject to public disclosure, and to make the information 07 available for public inspection, upon request, during normal business hours; and 08 (6) the project complies with regulations adopted by the department 09 under this section. 10 (d) If a corporation has been issued an initial certification of qualified 11 expenditures under this section for a project and operations under that project continue 12 into a succeeding year, the corporation may apply for a subsequent certification of 13 qualified expenditures for the project. The department shall issue a subsequent 14 certification of qualified expenditures for a continuing project under this subsection if 15 the requirements of this section and regulations adopted under this section continue to 16 be met. However, even if the requirements of this section and regulations adopted 17 under this section are met at the time of application under this subsection, the 18 department may deny subsequent certification under this subsection if the department 19 finds that the project was not operated in compliance with the requirements of this 20 section and regulations adopted under this section in the preceding year. 21 (e) The department may not approve project design for more than six proposed 22 projects in a calendar year. 23 (f) In reviewing a proposed project's design or in making a determination 24 under (b) of this section, the department may request from an advisory group with 25 expertise in water quality projects 26 (1) an evaluation of and recommendation concerning the proposed 27 project's design; or 28 (2) an evaluation of and recommendation concerning a corporation's 29 application for certification under this section. 30 (g) The department may adopt regulations to implement this section, including 31 regulations that
01 (1) establish standards for approving a proposed project's design and 02 for limiting the number of approvals as required by (e) of this section; 03 (2) establish additional standards that must be met in order for a project 04 to be considered a qualified project; 05 (3) establish application and other fees necessary to cover department 06 costs in administering the certification program; 07 (4) establish application and other procedures, including procedures for 08 requesting department approval of a proposed project's design and for application for 09 a subsequent certification under (d) of this section; 10 (5) establish the forms of verification of qualified expenditures that 11 must be submitted with an application under (a) or (d) of this section. 12 (h) In this section, 13 (1) "direct expenditures" 14 (A) includes providing financing to a third party so long as that 15 financing was used entirely to carry out the project or a portion of the project; 16 (B) does not include overhead costs; 17 (2) "project" means a Cook Inlet watershed water quality monitoring 18 project; and 19 (3) "qualified expenditures" means direct expenditures made 20 (A) in the state in the preceding year for water quality 21 monitoring that was not required by a statute, regulation, lease, stipulation, 22 permit, court or administrative order, or other legal requirement; and 23 (B) after December 31, 1998 and before January 1, 2004. 24 * Sec. 4. If a court enters a final judgment declaring the credit provided in this Act to be 25 unconstitutional, secs. 2 and 3 of this Act are repealed effective December 31, 1998 and all 26 credits shall be denied and recovered by assessment to the extent allowed by law. 27 * Sec. 5. Sections 1 - 3 of this Act are repealed. 28 * Sec. 6. APPLICABILITY. This Act applies to tax years beginning after December 31, 29 1998. 30 * Sec. 7. TRANSITION: REGULATIONS. Notwithstanding sec. 9 of this Act, the 31 Department of Revenue and the Department of Environmental Conservation may proceed to
01 adopt regulations to implement their respective provisions in this Act. The regulations take 02 effect under AS 44.62 (Administrative Procedure Act), but not before the effective date of 03 secs. 1 - 3 of this Act. 04 * Sec. 8. Section 7 of this Act takes effect immediately under AS 01.10.070(c). 05 * Sec. 9. Section 1 - 4 and 6 of this Act take effect January 1, 1999. 06 * Sec. 10. Section 5 of this Act takes effect January 1, 2007.