04/19/2014 08:30 AM House FINANCE

CS FOR SENATE BILL NO. 71(FIN)                                                                                                
                                                                                                                                
     "An Act relating to the fishery resource landing tax."                                                                     
                                                                                                                                
4:36:07 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Neuman MOVED  to  ADOPT  the proposed  committee                                                                    
substitute   for  CSSB   71(FIN),  Work   Draft  28-LS0594\H                                                                    
(Bullard, 4/19/14).                                                                                                             
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
DANIEL   GEORGE,   STAFF,   REPRESENTATIVE   BILL   STOLTZE,                                                                    
explained the changes  in the CS. He pointed  to language on                                                                    
page  one  adding a  provision  for  an effective  date.  He                                                                    
pointed to page two,  lines 21-28 including language changes                                                                    
related to tax payers electing  to use the method. He stated                                                                    
that  the sponsor  and the  Department of  Revenue supported                                                                    
the  change.  The  change  was   specified  related  to  the                                                                    
notification  by   the  taxpayer  and  the   subsequent  tax                                                                    
liability.  He continued  with section  4, line  29 and  the                                                                    
addition of uncodified law pertaining  to the transition and                                                                    
implementation   of   the    bill.   Section   5   addressed                                                                    
retroactivity  to January  1, 2014.  Section 6  included the                                                                    
newly added effective date.                                                                                                     
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
4:38:40 PM                                                                                                                    
                                                                                                                                
Representative Munoz MOVED to ADOPT Amendment 1, 28-                                                                            
LS0594\H.1, Bullard, 4/19/14, (copy on file).                                                                                   
                                                                                                                                
     Page 1, line 1, following "tax":                                                                                           
     Insert "and cost recovery fisheries"                                                                                       
                                                                                                                                
     Page 1, following line 3:                                                                                                  
     Insert new bill sections to read:                                                                                          
        "* Section 1. AS 16.10.455(c) is amended to read:                                                                       
     (c)    As a  condition  of  participation in  a  common                                                                    
     property  salmon fishery  in  a  terminal harvest  area                                                                    
     under  this section,  a fisherman  who participates  in                                                                    
     the  fishery   is  subject  to   the  payment   of  the                                                                    
     assessment  levied under  (d)  of this  section on  the                                                                    
     projected  value of  the  salmon or  on  the pounds  of                                                                    
     salmon  harvested.  The  assessment is  levied  on  the                                                                    
     [VALUE  OF]  salmon that  the  fisherman  takes in  the                                                                    
     terminal harvest  area and sells  to a  licensed buyer.                                                                    
     The  buyer of  the  salmon must  be  licensed under  AS                                                                    
     43.75, and  the buyer  shall collect the  assessment on                                                                    
     salmon taken in a terminal  harvest area at the time of                                                                    
     purchase and remit the assessment  to the Department of                                                                    
     Revenue in  accordance with regulations adopted  by the                                                                    
     Department of Revenue.                                                                                                     
        * Sec. 2. AS 16.10.455(d) is amended to read:                                                                           
     (d)   The  Department  of Revenue  may, by  regulation,                                                                    
     annually, by  March 1  of each year,  set the  [RATE OF                                                                    
     THE] assessment  levied on salmon  taken in  a terminal                                                                    
     harvest  area in  consultation with  the Department  of                                                                    
     Commerce,  Community,  and  Economic  Development,  the                                                                    
     hatchery   permit   holder,  and   representatives   of                                                                    
     affected  commercial  fishermen.   The  [RATE  OF  THE]                                                                    
     assessment  shall provide  sufficient revenue  to cover                                                                    
     debt  service   to  the  state,   reasonable  operating                                                                    
     expenses,   reasonable    maintenance   expenses,   and                                                                    
     development or maintenance of a  reserve fund up to 100                                                                    
     percent  of  annual  operating costs  of  the  hatchery                                                                    
     permit   holder.  In   setting   the   [RATE  OF   THE]                                                                    
     assessment,   the   department   shall   consider   the                                                                    
     estimated return and harvest  of salmon in the terminal                                                                    
     harvest  area,  the  projected price  to  be  paid  for                                                                    
     salmon  in  the  region,  the amount  of  the  existing                                                                    
     reserve  held by  the hatchery  permit holder,  and the                                                                    
     amount by  which the  assessment collected  in previous                                                                    
     years exceeded or fell short  of the amount anticipated                                                                    
     to  be collected.  The [TOTAL  RATE OF  THE] assessment                                                                    
     may not exceed  50 percent of the value  of the salmon.                                                                    
     The department may levy the  assessment as a percentage                                                                    
     of the projected  value of the salmon  returning to the                                                                    
     terminal harvest area  or as a flat rate  on each pound                                                                    
     of salmon harvested  in the area, to  the nearest whole                                                                    
     cent."                                                                                                                     
                                                                                                                                
     Page 1, line 4:                                                                                                            
     Delete "Section 1"                                                                                                         
     Insert "Sec. 3"                                                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 3, line 3:                                                                                                            
     Delete "secs. 1 - 3"                                                                                                       
     Insert "secs. 3 - 5"                                                                                                       
                                                                                                                                
     Page 3, line 4:                                                                                                            
     Delete "sec. 3"                                                                                                            
     Insert "sec. 5"                                                                                                            
                                                                                                                                
     Page 3, line 4:                                                                                                            
     Delete "Sections 1 - 3"                                                                                                    
     Insert "Sections 3 - 5"                                                                                                    
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
Representative Munoz explained  the amendment addressing the                                                                    
method  used by  hatcheries to  determine the  assessment on                                                                    
the  revenues collected  on fish  returning to  the hatchery                                                                    
area.  She  stated   that  the  assessment  was   set  as  a                                                                    
percentage  on  the  fish. The  current  assessment  was  20                                                                    
percent. She noted  that the issues faced  by the hatcheries                                                                    
included  the  variety of  payments  for  the fish.  The  20                                                                    
percent  was   set  allowing   for  variation   on  hatchery                                                                    
payments. She  highlighted the option of  percentage or flat                                                                    
rate, which  would be based  on a projected value  of salmon                                                                    
returning to  the hatchery area.  The assessments  were paid                                                                    
to the Department  of Revenue who appropriated  the funds to                                                                    
the hatchery for operations. The  amendment was supported by                                                                    
all  state  hatcheries  along   with  the  Southeast  Saners                                                                    
Association.                                                                                                                    
                                                                                                                                
SENATOR PETER MICCICHE, SPONSOR, supported the amendment.                                                                       
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, Amendment 1 was ADOPTED.                                                                                     
                                                                                                                                
Representative  Costello  addressed  the  two  fiscal  notes                                                                    
including  one  previously  published  indeterminate  fiscal                                                                    
note  from  the Department  of  Revenue  and one  previously                                                                    
published zero fiscal note from  the Department of Commerce,                                                                    
Community and Economic Development.                                                                                             
                                                                                                                                
Vice-Chair Neuman  MOVED to REPORT  HCS CSSB 71(FIN)  out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes.                                                                                                      
                                                                                                                                
HCS CSSB  71(FIN) was REPORTED  out of committee with  a "do                                                                    
pass" recommendation and with  one previously published zero                                                                    
fiscal  note:   FN3  (CED)  and  one   previously  published                                                                    
indeterminate fiscal note: FN4 (REV).                                                                                           
                                                                                                                                
Senator Micciche thanked  the committee for its  work on the                                                                    
bill.                                                                                                                           
                                                                                                                                
4:43:59 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
4:45:16 PM                                                                                                                    
RECONVENED