SB 322-SALMON ENHANCEMENT TAX                                                                                                 
                                                                                                                                
CHAIR SEATON announced that the  first order of business would be                                                               
SENATE BILL NO.  322, "An Act relating to the  rate of the salmon                                                               
enhancement tax."                                                                                                               
                                                                                                                                
Number 0059                                                                                                                     
                                                                                                                                
CHERYL  SUTTON, Staff  to the  Joint Legislative  Salmon Industry                                                               
Task Force, Alaska State Legislature,  presented SB 322 on behalf                                                               
of  Senator Ben  Stevens,  sponsor, who  chairs  the Task  Force.                                                               
This  legislation,  she  explained, merely  adds  additional  tax                                                               
rates of  30, 20, 15,  10, 9, 8,  7, 6, 5,  and 4 percent  to the                                                               
salmon  enhancement  tax.    She  further  explained  that  under                                                               
current  law,  commercial  salmon interim-use  and  entry  permit                                                               
holders  organized under  regional  aquaculture associations  may                                                               
vote to tax themselves at the rates  of 1, 2, and 3 percent.  The                                                               
collected revenues pass through the  Department of Revenue to the                                                               
Department of  Community & Economic  Development (DCED)  and back                                                               
out to  the regional  aquaculture associations  in order  to fund                                                               
the operations and programs of those associations.                                                                              
                                                                                                                                
MS. SUTTON related that SB  322 was introduced because during the                                                               
interim Senator Ben Stevens chaired  the Hatchery Subcommittee of                                                               
the Task  Force during which  much concern was related  in regard                                                               
to cost-recovery  practices for the  hatcheries.  Some  wanted to                                                               
have  the ability  and flexibility  to quickly  "buy down"  their                                                               
debt service.   She highlighted  that this is a  totally optional                                                               
tax  rate.   In response  to Chair  Seaton, Ms.  Sutton confirmed                                                               
that  SB 322  merely changes  the tax  rates, not  the collection                                                               
procedures or pass-through amounts.                                                                                             
                                                                                                                                
Number 0301                                                                                                                     
                                                                                                                                
REPRESENTATIVE  OGG inquired  as  to the  percentage required  to                                                               
change the aquaculture associations' tax.                                                                                       
                                                                                                                                
MS. SUTTON  answered that the  statute, AS  43.76.015(a)(1) reads                                                               
as follows:   "it is approved by a majority  vote of the eligible                                                               
interim-use permit  (IUP) and entry  permit holders voting  in an                                                               
election held under this section in the region;".                                                                               
                                                                                                                                
CHAIR  SEATON  mentioned  that there  have  been  questions  with                                                               
regard to  cost-recovery fish  and the  high percentage  of cost-                                                               
recovery fish that are taken by  some of the hatcheries.  Some in                                                               
the state would rather impose a  high total tax and not have cost                                                               
recovery occur  at all.   Therefore, the fishermen would  be free                                                               
to catch all of the fish  rather than have special harvest areas.                                                               
This legislation would provide fishermen  another option by which                                                               
they could  fund the  fisheries without  having to  segregate the                                                               
fish.                                                                                                                           
                                                                                                                                
Number 0426                                                                                                                     
                                                                                                                                
REPRESENTATIVE OGG moved  to report SB 322 out  of committee with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
There being no objection, it was so ordered.