1998-02-12                     Senate Journal                      Page 2500
SB 294                                                                       
SENATE BILL NO. 294 BY THE SENATE 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 Resources and Finance              
Committees.                                                                    
                                                                               
Fiscal notes published today from Department of Revenue,                       
Department of Environmental Conservation.                                      
                                                                               
Governors transmittal letter dated February 11:                                
                                                                               
Dear President Miller:                                                         
                                                                               
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                     Senate Journal                      Page 2501
SB 294                                                                       
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