Legislature(1995 - 1996)
01/17/1996 05:04 PM House FSH
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE SPECIAL COMMITTEE ON FISHERIES
January 17, 1996
5:04 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Chair
Representative Carl Moses, Vice-Chair
Representative Gary Davis
Representative Kim Elton
MEMBERS ABSENT
Representative Scott Ogan
COMMITTEE CALENDAR
* HOUSE BILL NO. 396
"An Act relating to the fisheries resource landing tax; and
providing for an effective date."
- HEARD AND HELD
* HOUSE BILL NO. 397
"An Act relating to the seafood marketing assessment; and
providing for an effective date."
- PASSED SSHB 397 OUT OF COMMITTEE
PREVIOUS ACTION
BILL: HB 396
SHORT TITLE: FISHERIES RESOURCE LANDING TAX
SPONSOR(S): REPRESENTATIVE(S) AUSTERMAN
JRN-DATE JRN-PG ACTION
01/08/96 2370 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2370 (H) FSH, RESOURCES, FINANCE
01/17/96 (H) FSH AT 05:00 PM CAPITOL 124
BILL: HB 397
SHORT TITLE: SEAFOOD MARKETING ASSESSMENT
SPONSOR(S): REPRESENTATIVE(S) AUSTERMAN
JRN-DATE JRN-PG ACTION
01/08/96 2370 (H) READ THE FIRST TIME - REFERRAL(S)
01/08/96 2371 (H) FSH, RESOURCES, FINANCE
01/17/96 (H) FSH AT 05:00 PM CAPITOL 124
01/17/96 2463 (H) SPONSOR SUBSTITUTE
INTRODUCED-REFERRALS
01/17/96 2463 (H) FSH, RESOURCES, FINANCE
WITNESS REGISTER
AMY DAUGHERTY, Committee Aide
House Special Committee on Fisheries
Alaska State Legislature
State Capitol, Room 434
Juneau, Alaska 99801-4990
Telephone: (907) 465-2487
POSITION STATEMENT: Provided information on SSHB 397
BOB BARTHOLOMEW, Deputy Director
Income and Excise Audit Division
Department of Revenue
P.O. Box 110420
Juneau, Alaska 99811-0420
Telephone: (907) 465-4773
POSITION STATEMENT: Testified in favor of SSHB 397
ACTION NARRATIVE
TAPE 96-1, SIDE A
Number 000
The House Special Committee on Fisheries was called to order at
5:04 p.m. on Wednesday, January 17, 1996. A quorum was present.
Members present at the call to order were Representatives
Austerman, Moses, Elton, and G. Davis.
HB 396 - FISHERIES RESOURCE LANDING TAX
HB 397 - SEAFOOD MARKETING ASSESSMENT
CHAIRMAN ALAN AUSTERMAN announced that the agenda was HB 396 and
HB 397. He added that since the calendar was published, a
sponsor substitute for HB 397 (SSHB 397) was introduced which
combined HB 396 and HB 397 into one bill.
Number 090
REPRESENTATIVE KIM ELTON moved that the committee take up SSHB
397.
Number 109
Hearing no objections, CHAIRMAN AUSTERMAN announced that the
committee would address SSHB 397 and introduced Amy Daugherty.
Number 150
AMY DAUGHERTY, Committee Aide, House Special Committee on
Fisheries, Alaska State Legislature, provided information on SSHB
397. She said that SSHB 397 was designed to more precisely align
the current fisheries resource landing tax with the fisheries
business tax and the Alaskan Seafood Marketing Institute (ASMI)
assessment. She stated that SSHB does this by clarifying the
landing tax as an occupational tax and equalizes tax rates and
credits with the fisheries business tax.
MS. DAUGHERTY said that the legislation came about through
discussions with the Department of Revenue (DOR) about the legal
challenges affecting the landing tax and its revenues, and of the
need to clarify the intent of this tax by aligning the landing
tax with the fisheries business tax. She provided some history
to SSHB 397 stating, prior to January 1, 1994 offshore fishery
resources were not subject to any Alaska fishery tax. She added
that these revenues were important to the state and to the
sharing communities who are impacted by the offshore fisheries.
Number 292
REPRESENTATIVE GARY DAVIS asked for a brief outline, of the two
taxes and revenues from those taxes, from the DOR.
Number 335
BOB BARTHOLOMEW, Deputy Director, Income and Excise Audit
Division, DOR, provided information about current taxes involving
the fishing industry. He said the fisheries resource landing tax
was instituted in 1994 to establish a tax comparable to the tax
that was implemented and revised since the early 1900s for those
who fished within the three mile limit. Until 1994, resources
that were caught outside the three mile limit and brought inside
the three mile limit, had not been subject to any tax despite the
fact that they used state and local resources. The Alaskan state
legislature enacted the 1994 Fisheries Landing Tax, including an
assessment for ASMI within one statutory reference. The
industry, that was subject to the tax, took it Superior Court and
then to the Supreme Court. The Supreme Court ruled that the
industry needed to use the administrative appeal process within
the DOR. He said the affected industry was currently in this
process.
Number 473
MR. BARTHOLOMEW said the affected industry challenged the
fisheries resources landing tax by saying it was not a business
but a property tax whereas the DOR felt that it was similar to
the fisheries business tax already in place. He said the intent
of SSHB 397 was to tax all businesses benefiting from Alaskan
resources. He said the DOR supports the legislation to improve
the statutes and added that the DOR had a zero fiscal note
because it has a negligible impact on the taxpayer or on the DOR.
He said SSHB 397 clarifies how the tax works and it's intent.
MR. BARTHOLOMEW said that SSHB 397 adds, under the fisheries
landing resources tax, the ability to take an education credit.
The other fishery business tax allows tax credits for
contributions to certain educational institutions. He said it
makes sense for both taxes to have an education credit. SSHB 397
allows for a lower rate on development of fisheries which amounts
to less than two-tenths of 1 percent of the resources that are
caught. It does allow a lower rate for resources that are
determined to be developed by the Department of Fish and Game.
SSHB 397 adjusts the sharing provisions to make sure that it
aligns up with the other changes that are taking place so that it
doesn't reduce or change that amount of money shared with local
governments.
MR. BARTHOLOMEW said that currently the landing tax and an ASMI
assessment are combined into one rate of 3.3 percent. The
fisheries business tax, which is a separate tax on resources
caught within the three mile limit, has a 3 percent rate and then
under a separate statute the DOR accesses a ASMI assessment of .3
percent. The legislature in the 1994 fisheries resources landing
tax combined those two rates into one statute for a total of 3.3
percent. One of the contentions of the industry is that the DOR
is taxing resources caught outside the state boundary at a higher
rate because of this inclusion of the ASMI assessment rate. SSHB
397 reduces the fishery landing tax in the statute from 3.3
percent to 3 percent. The ASMI statute would then institute a .3
percent ASMI assessment.
Number 731
REPRESENTATIVE G. DAVIS asked for more details on the Supreme
Courts decision to refer the industries complaint back to the
DOR.
Number 743
MR. BARTHOLOMEW said that under the tax codes there is a process
put into the statutes and regulations for a taxpayer to appeal.
If the taxpayer feels he/she has been treated unfairly, there is
an informal level where it is reviewed by appeals officers, of
the Income and Excise Audit Division of the DOR, who issue a
ruling. After that process there is a second level called the
formal hearing level which is currently in the commissioners
office. At this point a hearing officer will take a second look
at their case and rule one way or the other. The last avenue of
appeal, if he/she still feels the two reviews have been unfair,
is to go back to court. Historically the courts have always
ruled that when statutes authorize an administrative process a
taxpayer must first go through this process. The fishing
industry who opposes the fishery resources landing tax is at this
informal level.
Number 817
REPRESENTATIVE G. DAVIS asked if the Supreme Court responded to
any constitutional issues.
Number 829
MR. BARTHOLOMEW said that the court did not address
constitutional issues, but wanted the specific issues defined in
the administrative appeals level.
Number 848
REPRESENTATIVE G. DAVIS addressed concern about skirting the
dedicated tax issue in many areas and departments in the state.
He added that he does not have any problem with SSHB 397.
CHAIRMAN AUSTERMAN asked what Representative Davis was referring
to as dedicated taxes.
REPRESENTATIVE G. DAVIS said he was referring to the .3 percent
ASMI assessment. He said that anything outside income received
to the states general fund would be deemed as a dedicated tax.
Number 901
REPRESENTATIVE ELTON addressed Representative Davis' concern by
saying that there is no dedication to ASMI. In the last 15 years
money has been collected, especially from the volunteer processor
tax, and returned to the taxpayers in the form of seafood
marketing. He said there is a moral obligation to pay this tax
but not a dedication to that fund. Representative Elton stated
that there is nothing allowing this committee to reappropriate
that money to ASMI.
Number 999
There being no further discussion on SSHB 397, REPRESENTATIVE
ELTON made a motion to move SSHB 397 out of the House Special
Committee on Fisheries with individual recommendations. Hearing
no objection, it was so ordered.
Number 1014
CHAIRMAN AUSTERMAN asked each member of the committee to give
some thought to any issues they would prefer or like to see come
to this committee in way of department overviews or information
that we can gather to bring to this committee.
ADJOURNMENT
There being no further business to come before the House Special
Committee on Fisheries, Chairman Austerman adjourned the meeting
at 5:20 p.m.
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