1998-02-12                     House Journal                      Page 2310
HB 402                                                                       
HOUSE BILL NO. 402 by the House Rules Committee by request of                  
the Governor, entitled:                                                        
                                                                               
"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."                                     
                                                                               
was read the first time and referred to the House Special Committee            
on Oil & Gas, the Resources and Finance Committees.                            
                                                                               
The following fiscal notes apply:                                              
                                                                               
Fiscal note, Dept. of Environmental Conservation, 2/12/98                      
Fiscal note, Dept. of Revenue, 2/12/98                                         
                                                                               
The Governor's transmittal letter dated February 11, 1998, appears             
below:                                                                         
                                                                               
"Dear Speaker Phillips:                                                        
                                                                               
In the interest of ensuring healthy communities in Alaska and                  
continuing the state's partnership with industry for responsible               
development, I am transmitting a bill offering corporate tax credits to        
companies for voluntary water quality monitoring programs in the               
Cook Inlet area.  The tax credit is intended as an incentive to private        
industry to expand their efforts in safeguarding our precious                  
watersheds.  The concept for this bill was proposed by a group of              
Cook Inlet area stakeholders representing the oil and gas industry,            
Native corporations, commercial and sport fishing, tourism,                    
environmental groups, and private landowners.                                  

1998-02-12                     House Journal                      Page 2311
HB 402                                                                       
The tax credit provided under the bill is limited to certain expenditures      
for water quality monitoring projects in the Cook Inlet watershed that         
meet specific criteria.  A taxpayer would be allowed a 60 percent              
credit against the Alaska Net Income Tax for qualified direct                  
expenditures on an approved water quality project.  The credit would           
be limited to $100,000 per year or 50 percent of the tax liability,            
whichever is less.  Only qualified project expenditures in the state in        
a tax year beginning after December 31, 1998 and before January 1,             
2004 are eligible for a credit under the bill, but carry-forwards may be       
made to tax years beginning before January 1, 2007.                            
                                                                               
To be eligible for the credit, a taxpayer must submit a project design         
to the Department of Environmental Conservation (DEC) for approval.            
The department would also certify the direct expenditures for qualified        
water quality monitoring projects.  The DEC may seek help from an              
advisory group with expertise in water quality projects to evaluate            
project designs or certify expenses.                                           
                                                                               
This bill will encourage private industry to invest in qualified water         
quality monitoring projects in the Cook Inlet watershed.  If this tax          
credit program is successful, it will serve as a model for additional          
water quality monitoring programs across the state.                            
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor"