Legislature(2019 - 2020)BUTROVICH 205
03/13/2020 03:30 PM Senate RESOURCES
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| Audio | Topic |
|---|---|
| Start | |
| SB184 | |
| SB130 | |
| SB232 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SJR 15 | TELECONFERENCED | |
| *+ | SB 184 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 130 | TELECONFERENCED | |
| += | SB 232 | TELECONFERENCED | |
SB 184-EXTEND FISHERY RESOURCE LAND. TAX CREDIT
3:32:41 PM
CHAIR MICCICHE announced that the first order of business would
be SENATE BILL NO. 184, "An Act extending the fishery resource
landing tax credit for certain taxpayers that harvest fishery
resources under the provisions of a community development quota;
providing for an effective date by amending the effective date
of sec. 36, ch. 61, SLA 2014; and providing for an effective
date."
3:33:07 PM
SENATOR DONALD OLSON, Alaska State Legislature, Juneau, Alaska,
sponsor of SB 184, explained that the bill extends the date for
[The Western Alaska Community Development Quota (CDQ) Program]
to continue their function which is essential to many coastal
Alaska communities. The CDQ Program is based on a tax credit to
provide economic development.
3:33:46 PM
DENISE LICCIOLI, Staff, Senator Donald Olson, Alaska State
Legislature, Juneau, Alaska, said SB 184 extends the fishery
resource landing tax credit for the CDQ Program for 10 years.
The scheduled sunset date for the tax credit is December 31,
2020 and SB 184 will extend that to December 31, 2030.
She detailed that the Alaska Division of Legislative Finance
produced its biennial indirect cost report in 2019 and
recommended continuation of the program. The Alaska Department
of Revenue-Tax Division Revenues Source Book Report also
recommended continuation of the program.
MS. LICCIOLI explained that CDQ holders receive a tax credit if
certain program expenditures occur. She noted that many of the
programs are educational. The CDQ tax credits split are against
the specific municipality share of the tax.
She noted that the CDQ Program is net zero to the State, whether
there is sunset date extension or not. However, many of the CDQ
groups want the legislature to extend the program because they
receive the benefit of the program's tax credit. Municipalities
have not voiced opposition to extending the program's sunset
date, which is where the tax credit comes from.
CHAIR MICCICHE asked Mr. Spanos with the Tax Division to explain
the program's tax revenue distribution and use.
3:36:52 PM
BRANDON SPANOS, Deputy Director, Tax Division, Alaska Department
of Revenue, Anchorage, Alaska, detailed that the tax credit is
on the 50 percent fishery landing tax share that goes to the
municipalities. Having the CDQ credit come out of the
municipality side makes a lot of sense because the money goes
back to nonprofits organized by the villages in Western Alaska
and the Aleutians.
He said the CDQ Program is a federal program established in
1992. It provides 10 percent of the Bering Sea and Aleutian
Islands fisheries to the villages that formed six CDQ nonprofit
corporations. The federal government established the CDQ Program
to provide eligible Western Alaska villages with the opportunity
to participate and invest in the Bering Sea and the Aleutians
Island management area fisheries.
MR. SPANOS explained that the CDQ tax credit filings require Tax
Division approval. Most tax credit claims occur during tax
return filings, but the CDQ tax credit submission occurs prior
to that. There are seven contribution categories identified on a
tax credit form that a fisherman can donate to: scholarships,
seafood industry training, transportation facility grants,
transportation facility loans, facilities grants, facilities
loans, and research grants. A fisherman can claim a tax credit
up to 45.5 percent on their tax return.
SENATOR KIEHL asked if there is a list of municipalities
affected by the tax credit.
MR. SPANOS replied he had the list on his screen but someone
else may have in in a more usable form.
CHAIR MICCICHE asked Mr. Caissie if he had the list.
3:40:44 PM
JOSEPH CAISSIE, Assistant State Assessor, Division of Community
and Regional Affairs, Alaska Department of Commerce, Community &
Economic Development, Anchorage, Alaska, replied he did not have
the list and it is not readily available. It would entail going
through a list of 112 communities to determine which are
impacted by these credits.
CHAIR MICCICHE asked Ms. Ivanoff if she had the list.
3:41:16 PM
LAURELI IVANOFF, Communications Director, Norton Sound Economic
Development Corporation, Unalakleet, Alaska, replied she did not
have the information.
CHAIR MICCICHE asked someone to submit a list of the
municipalities affected by the tax credit before the next
hearing.
MS. LICCIOLI said Senator Olson's office will provide the list.
CHAIR MICCICHE asked Mr. Caissie if he had any testimony on the
bill.
MR. CAISSIE replied the department does not have any official
comment on the bill.
CHAIR MICCICHE asked Ms. Ivanoff if she had any comments on the
bill.
MS. IVANOFF stated that the Norton Sound Economic Development
Corporation (NSEDC) supports extending the sunset date. She said
NSEDC has given sizable contributions to the Northwestern Alaska
Career and Technical Center (NACTEC) for a vocational education
program that provides opportunities for students from the Bering
Strait School District and Nome Public Schools. The NSEDC
contributions have been an important resource for NACTEC.
SENATOR GIESSEL asked who Ms. Ivanoff represents.
CHAIR MICCICHE replied Ms. Ivanoff represents the Norton Sound
Economic Development Corporation.
He noted that the program had run from 2014 and 2020 and asked
if this was the first sunset.
3:43:22 PM
SENATOR OLSON explained that the Norton Sound Economic
Development Corporation is the CDQ assigned to the area between
Wales and the start of the next CDQ near the delta of the Yukon
River. He said the federal delegation initiated the CDQ Program
and this is the first extension that he is aware of.
He said he can attest to Ms. Ivanoff's comments on the programs
that have benefited from the CDQ Program because he lives in one
of the communities that benefits. The programs give more
opportunities to the youth to provide more education, more jobs,
and an opportunity to continue living in the area.
CHAIR MICCICHE said he asked because the program ran for 6 years
and the bill requests a 10-year extension. He asked if there was
a reason for the additional 4 years.
MS. LICCIOLI replied she would follow up with an answer to the
question.
SENATOR KIEHL said his question was why the extension was for
only 10 years when Legislative Finance's indirect expenditure
report suggested the legislature consider eliminating the sunset
date.
SENATOR OLSON replied that the legislature likes to see sunset
dates because things can change. He said the Bering Sea fishery
is very large and he is more comfortable with a sunset date so
the legislature can review the program and verify its benefit to
the public. He noted that there has been no opposition in his
region to having the CDQ in place.
MS. LICCIOLI added that one of the reasons for keeping a sunset
is on behalf of municipalities since the tax credit goes against
their share.
3:46:07 PM
CHAIR MICCICHE opened public testimony. He found no one who
wished to testify.
3:46:30 PM
CHAIR MICCICHE held SB 184 in committee for future
consideration.