05/12/2003 09:12 AM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 90(FIN)                                                                                              
     "An Act relating to a salmon product development tax credit                                                                
     and a salmon utilization tax credit under the Alaska fisheries                                                             
     business tax; and providing for an effective date."                                                                        
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken reminded  that this bill, "recommended by the Salmon                                                            
Task  Force,  provides  two  tax credits:  one  for  salmon  product                                                            
development and  another for salmon utilization. The  purpose of the                                                            
measure is to encourage  industry to invest in the production of new                                                            
value-added  salmon  products to  improve  marketability.  It has  a                                                            
retroactive clause to January 1, 2003."                                                                                         
                                                                                                                                
Senator B. Stevens moved  for adoption of SCS CS HB 90, 23-LS0525\B,                                                            
as a working draft.                                                                                                             
                                                                                                                                
Senator B.  Stevens detailed the changes  proposed in the  committee                                                            
substitute clarifying the  definitions of qualified expenditures for                                                            
salmon utilization.  He informed that  efforts were underway  by the                                                            
Governor's Office,  himself, and industry representatives  to ensure                                                            
the costs could be contained to their intended purposes.                                                                        
                                                                                                                                
Senator Bunde  asked if  agreements were  entered into that  require                                                            
the retroactivity of this legislation.                                                                                          
                                                                                                                                
Senator B.  Stevens responded that  this legislation was  drafted in                                                            
November 2002  with the anticipation that it would  have been passed                                                            
into law  earlier than  May 2003.  If the bill  had been enacted  in                                                            
February  2003, he  pointed out  the retroactivity  would have  been                                                            
limited to one month.                                                                                                           
                                                                                                                                
CHUCK HARLAMERT,  Juneau Section Chief, Tax Division,  Department of                                                            
Revenue, stated he was  not involved in matters relating to the need                                                            
for  the  provisions  of this  legislation  to  be  retroactive.  He                                                            
surmised that affected  taxpayers could have made business decisions                                                            
based on  the passage of  this bill early  in the calendar  year. He                                                            
did not expect the retroactivity  to have a significant effect since                                                            
the salmon fishing season does not start until the spring.                                                                      
                                                                                                                                
There was no objection  to the adoption of Version  "B" as a working                                                            
draft and the committee substitute was ADOPTED.                                                                                 
                                                                                                                                
Senator B. Stevens  offered a motion to report HB  90 from Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
                                                                                                                                
Without  objection SCS  CS HB  90 (FIN)  MOVED from  Committee  with                                                            
fiscal note #1 for $49,300 from the Department of Revenue.                                                                      
                                                                                                                                
AT EASE 9:19 AM / 9:20 AM