CSHB 129(FSH): "An Act relating to the fisheries product development tax credit; providing for an effective date by amending the effective date of sec. 2, ch. 31, SLA 2022; and providing for an effective date."
00 CS FOR HOUSE BILL NO. 129(FSH) 01 "An Act relating to the fisheries product development tax credit; providing for an 02 effective date by amending the effective date of sec. 2, ch. 31, SLA 2022; and providing 03 for an effective date." 04 BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF ALASKA: 05 * Section 1. AS 43.75.037(b) is amended to read: 06 (b) The amount of the tax credit applied against taxes under this section may 07 not 08 (1) exceed 50 percent of the taxpayer's tax liability incurred under this 09 chapter for processing of eligible fish during the tax year; or 10 (2) be claimed for property first placed into service after December 31, 11 2029 [2026]. 12 * Sec. 2. AS 43.75.037(c) is amended to read: 13 (c) If the property for which a tax credit is claimed is installed on a vessel, the 14 amount of qualified investment under (a) of this section is determined by multiplying
01 the investment cost of the qualified investment property by a fraction, the numerator 02 of which is the weight of raw macroalgae and raw eligible fish processed on the 03 vessel by the taxpayer in the state in the tax year in which the property is first placed 04 into service, and the denominator of which is the weight of raw macroalgae and raw 05 eligible fish processed on the vessel by the taxpayer in and outside of the state in the 06 tax year in which the property is first placed into service. In this subsection, "eligible 07 fish" does not include pollock, sablefish, or Pacific cod. 08 * Sec. 3. AS 43.75.037(g) is amended to read: 09 (g) If, during a tax year, property for which a credit was claimed under this 10 section is disposed of by the taxpayer, ceases to be qualified investment property, or is 11 removed from service in the state, the tax due under this chapter is increased by the 12 recapture percentage of the aggregate decrease in the credit allowed under this section 13 for all prior tax years that would have resulted solely from reducing to zero the credit 14 allowed for the qualified investment property under this section. The amount of tax 15 credit attributable to the qualified investment that is carried forward from prior tax 16 years is terminated as of the first day of the tax year in which the qualified investment 17 property is disposed of by the taxpayer, ceases to be qualified investment property, or 18 is removed from service in the state. For purposes of this subsection, 19 (1) the recapture percentage during the year in which the property is 20 first placed into service or during the first year following the year in which the 21 property is first placed into service is 100 percent; 22 (2) the recapture percentage during the second year following the year 23 in which the property is first placed into service is 75 percent; 24 (3) the recapture percentage during the third year following the year in 25 which the property is first placed into service is 50 percent; 26 (4) the recapture percentage during the fourth or later year following 27 the year in which the property is first placed into service is zero percent; 28 (5) qualified investment property used on a vessel is considered to 29 have been removed from the state on the first day of a tax year in which the proportion 30 of raw macroalgae and raw eligible fish processed in the state on the vessel is less 31 than 50 percent of total weight of raw macroalgae and raw eligible fish processed on
01 the vessel in and outside of the state. 02 * Sec. 4. AS 43.75.037(i) is amended to read: 03 (i) The department shall develop and implement procedures by which a 04 taxpayer that is a fisheries business may submit the taxpayer's proposed investment to 05 the department and request a preliminary determination of whether the investment 06 qualifies for the fisheries product development tax credit under this section. A 07 preliminary determination by the department that the taxpayer's submission qualifies 08 for the credit is binding, unless the department determines that the taxpayer has made 09 a material misrepresentation in the taxpayer's submission. The department shall 10 make a preliminary determination as to whether a taxpayer's proposed 11 investment qualifies for a credit within 60 days after the department receives a 12 taxpayer's proposed investment submitted under this subsection. 13 * Sec. 5. AS 43.75.037(k)(1) is amended to read: 14 (1) "eligible fish" means, except as otherwise provided in (c) of this 15 section, any species of fish or shellfish [SALMON, HERRING, POLLOCK, 16 SABLEFISH, OR PACIFIC COD]; 17 * Sec. 6. AS 43.75.037(k)(4) is amended to read: 18 (4) "qualified investment" means the investment cost to purchase or 19 convert depreciable tangible personal property with a useful life of three years or more 20 that will [TO] be used predominantly to harvest or process macroalgae, increase 21 the quality and value of macroalgae or eligible fish, or perform an ice-making, 22 processing, packaging, or product-finishing function that is a significant component in 23 producing a value-added eligible fish product, including canned salmon products in 24 can sizes other than 14.75 ounces or 7.5 ounces; in this paragraph, "property" 25 (A) includes 26 (i) equipment used to fillet, skin, portion, mince, form, 27 extrude, stuff, inject, mix, marinate, preserve, dry, smoke, brine, 28 package, freeze, scale, grind, separate meat from bone, or remove pin 29 bones; 30 (ii) new parts necessary for, or costs associated with, 31 converting a canned salmon line to produce can sizes other than 14.75
01 ounces or 7.5 ounces; 02 (iii) conveyors used specifically in the act of producing 03 a value-added eligible fish product; 04 (iv) ice-making machines, freezers, and other 05 temperature reducing technologies; 06 (v) new canning equipment for herring products; 07 [AND] 08 (vi) equipment used to transform eligible fish byproduct 09 that is discarded as waste into saleable product; and 10 (vii) equipment used to harvest or process 11 macroalgae; 12 (B) does not include 13 (i) vehicles, forklifts, conveyors not used specifically in 14 increasing the quality and value of macroalgae or eligible fish or 15 the act of producing a value-added eligible fish product, cranes, pumps, 16 or other equipment used to transport eligible fish or eligible fish 17 products, knives, gloves, tools, supplies and materials, equipment, other 18 than ice-making machines, that is not processing, packaging, or 19 product-finishing equipment, or other equipment, the use of which is 20 incidental to increasing the quality and value of macroalgae or 21 eligible fish or the production, packaging, or finishing of value-added 22 eligible fish products; 23 (ii) the overhaul, retooling, or modification of new or 24 existing property, except for new parts necessary for, or costs 25 associated with, converting a canned salmon line to produce can sizes 26 other than 14.75 ounces or 7.5 ounces; or 27 (iii) property used predominantly to produce an eligible 28 fish product that is not taxed under this chapter; 29 * Sec. 7. AS 43.75.037(k) is amended by adding a new paragraph to read: 30 (8) "used predominantly" means used 51 percent or more of the time. 31 * Sec. 8. Section 6, ch. 31, SLA 2022, is amended to read:
01 Sec. 6. AS 43.05.230(m); AS 43.75.037, and 43.75.130(h) are repealed 02 January 1, 2030 [2027]. 03 * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new 04 section to read: 05 RETROACTIVITY. This Act is retroactive to January 1, 2025. 06 * Sec. 10. Section 8, ch. 31, SLA 2022, is amended to read: 07 Sec. 8. Section 2 of this Act takes effect January 1, 2030 [2027]. 08 * Sec. 11. This Act takes effect immediately under AS 01.10.070(c).