02/24/1993 08:00 AM House RES

  HB 133:  DEFINITION OF VALUE FOR FISHERIES TAX                               
                                                                               
  Number 582                                                                   
                                                                               
  CHAIRMAN WILLIAMS announced the committee would next take up                 
  HB 133, which was sponsored by the House Special Committee                   
  on Fisheries.                                                                
                                                                               
  Number 588                                                                   
                                                                               
  REPRESENTATIVE GAIL PHILLIPS, MEMBER, HOUSE SPECIAL                          
  COMMITTEE ON FISHERIES, PRIME SPONSOR OF HB 133, said the                    
  bill was similar to existing law, but restructured the                       
  definition of "value" used in administering fisheries taxes,                 
  in order to enhance clarity.  Also, HB 133 closed some                       
  loopholes in existing law.  She explained there was no known                 
  opposition to HB 133 from any parties, and the bill was                      
  supported by aquaculture organizations.  The background of                   
  the legislation stemmed from prior disputes among processors                 
  and fishermen over the definition of value in the payment of                 
  the raw fish tax and salmon enhancement tax.  The argument                   
  was that bonuses and delivery costs were not part of the                     
  actual amount paid fishermen for their fish.  That                           
  interpretation, she added, left an opening for processors to                 
  pay lower prices for the fish, and make up for the low price                 
  by giving bonuses for services such as delivery or handling,                 
                                                                               
  Number 593                                                                   
                                                                               
  REPRESENTATIVE PHILLIPS explained that HB 133 clarified                      
  exactly what services and forms of payment were subject to                   
  the taxes.  She added the bill had an effective date of                      
  January 1, 1994.                                                             
                                                                               
  Number 600                                                                   
                                                                               
  VICE CHAIR HUDSON asked for clarification that HB 133 would                  
  guarantee the treasury would collect the raw fish tax based                  
  on all prices paid to the fishermen, including bonus amounts                 
  and other in-kind contributions.                                             
                                                                               
  REPRESENTATIVE PHILLIPS confirmed that was correct.                          
                                                                               
  VICE CHAIR HUDSON then asked whether HB 133 included an                      
  incremental fiscal note showing anticipated revenues from                    
  the change in statute.                                                       
                                                                               
  REPRESENTATIVE PHILLIPS referred to the positive fiscal note                 
  from the Department of Revenue, showing anticipated                          
  additional revenue of $550,000.                                              
                                                                               
  Number 620                                                                   
                                                                               
  PAUL DICK, JUNEAU OPERATIONS, INCOME AND EXCISE AUDIT                        
  DIVISION, DEPARTMENT OF REVENUE (DOR), reiterated the                        
  comments of Representative Phillips.  He stated HB 133                       
  strengthened the position of the DOR by clarifying what was                  
  taxable.                                                                     
                                                                               
  Number 630                                                                   
                                                                               
  VICE CHAIR HUDSON asked Mr. Dick how the DOR currently                       
  tracked the types of additional payments mentioned in HB
.  He asked whether processors and fishermen were                         
  presently required to disclose this information, and if so,                  
  how that information was obtained.                                           
                                                                               
  Number 642                                                                   
                                                                               
  MR. DICK replied there were presently two ways.  One was                     
  through voluntary filing, and the other was through the                      
  audit process of accounting records.                                         
                                                                               
  Number 651                                                                   
                                                                               
  RAY GILLESPIE testified on behalf of REGIONAL AQUACULTURE                    
  ASSOCIATIONS, including Cook Inlet, Prince William Sound,                    
  and two Southeast Alaska associations.  He stated HB 133 had                 
  the unanimous support of the boards of all these                             
  associations.                                                                
                                                                               
  Number 656                                                                   
                                                                               
  REPRESENTATIVE BUNDE asked whether fishermen encouraged the                  
  processors to disclose information on bonuses and other                      
  payments.                                                                    
                                                                               
  Number 665                                                                   
                                                                               
  MR. GILLESPIE answered that yes, the majority of fishermen                   
  and processors complied with the law now, but there were                     
  small numbers in each region who tried to evade the taxes.                   
  He said HB 133 would help close loopholes and encourage                      
  enforcement.                                                                 
                                                                               
  TAPE 93-23, SIDE B                                                           
  Number 000                                                                   
                                                                               
  REPRESENTATIVE BUNDE made a MOTION to move HB 133 from                       
  committee with the positive fiscal note.                                     
                                                                               
  Number 017                                                                   
                                                                               
  CHAIRMAN WILLIAMS asked whether there were any objections to                 
  the motion, and hearing none, announced the MOTION CARRIED.                  
                                                                               
  ANNOUNCEMENTS                                                                
                                                                               
  CHAIRMAN WILLIAMS announced there would be no meeting of the                 
  House Resources Committee on Friday, February 26, 1993, or                   
  on Monday, March 1.                                                          
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  There being no further business to come before the House                     
  Resources Committee, Chairman Williams adjourned the meeting                 
  at 8:53 a.m.