SB 147 MUNICIPAL RIVER HABITAT TAX CREDIT  SENATOR LEMAN announced SB 147 to be up for consideration. SENATOR TORGERSON, sponsor, said SB 147 was introduced to correct and change part of the original legislation established in 1994 to allow for tax credits for improvements along the Kenai River as long as the improvements would protect or enhance the fish habitat. The current law requires ADF&G to establish criteria by regulation on how the improvements and credits would be taken. It also requires the Department to review and certify the improvements for the tax credits. These credits are only available when certified by ADF&G, he explained. SB 147 gives ADF&G more of an oversight role and has them work more directly with the Kenai Peninsula Borough. The Municipality would be required to establish the criteria by ordinance. This revised process would allow improvements to go forward so that habitat can be protected and land owners would receive their credit. Number 122 MAYOR DON GILMAN, Kenai, noted that he had sent a position paper to the committee. SENATOR LEMAN acknowledged receipt of that paper. MAYOR GILMAN said that SB 147 tries to limit what the Commissioner of ADF&G could review, because there needs to be more criteria. SENATOR TAYLOR said he wasn't sure why the legislature should be mandating back to a taxing entity the standards by which they will choose to either grant or deny a tax exemption nor does he think it is appropriate for the legislature to place an executive level bureaucrat in charge of either approving or disapproving an area for which they may wish to grant a tax credit for. It seems they are authorized to grant credits just as they are authorized to impose taxes. Let them establish the standards for which they wish to grant such taxes in their own community which is what they are hurting or helping. MR. GILMAN responded that he couldn't argue with that at all. SENATOR TAYLOR said he would be willing to grant a much broader authority to people wishing to do projects of this type. Number 222 GERON BRUCE, Alaska Department of Fish and Game, clarified that the Department wants to know exactly what is expected of them. They do support SB 147 with that clarification. Number 244 SENATOR PEARCE explained that, as the sponsor last year of the Senate version of HB 306, the original intent, which she worked closely with Mayor Gilman on, was to allow the borough to give credits for those people who spend their monies trying to do habitat restoration and protection along the Kenai River, as kind of a pilot project. They all thought that was a laudable goal. As the committee process followed, at the request of the Department and some legislators, it was decided that ADF&G would promulgate regulations that would set up other criteria that the borough had to use before the borough could do their tax credit ordinance. Unfortunately, there still aren't regulations under the old bill, but the borough is facing a January 1 deadline to have an ordinance in place or they will not be able to allow any tax credits for the 1996 calendar year. She thought it was clear that it is not up to ADF&G to decide whether the scope of protection and restoration is equal to the value of the tax credit, but it is up to the borough. The only thing they want ADF&G to certify is that the criteria that the borough includes in their ordinance is certified by the commissioner as being helpful and of benefit to the habitat along the stream bed. Number 282 DALE BONDURANT supported SB 147 saying this was an added incentive to get people to save the river. GARY HINKLE said he thought the money and control should be local. He thought the permitting process still left the habitat agencies in control as they ought to be. He said that the permitting process is very involved which is a concern. Every agencies agrees with what they are going to do, but the inconsistencies between the agencies' regulations make it very hard to get them to agree on any one project. The most habitat friendly projects on the river are highly maintenance oriented. The less habitat friendly will last a long time, like putting rock along the bank. Most of the habitat friendly projects need to be reworked. He asked the committee to particularly realize the importance of the tax credit for the on going maintenance. SENATOR TAYLOR asked about the 50% limitation for one year, but then it says that the credit may be given for more than one. He asked if it was contemplated that these tax credits might be on- going for maybe 20, 30, or 40 years. MAYOR GILMAN said he didn't think it would go on for 20 to 40 years, but there is another restriction saying it can't exceed more than 50% of whatever the cost is. It's conceivable that it could go over two or more years. SENATOR TAYLOR said it was a commendable credit, but he was concerned that it was a percentage of 50% of a person's taxes which could very well pay for the whole project each year. MAYOR GILMAN answered that that was correct and it depends on the value that's established on the property. He said they are talking about 50% of the value, not necessarily 50% of the project. SENATOR TAYLOR said he didn't have any objection to that. Number 380 SENATOR PEARCE moved to pass SB 147 from committee with individual recommendations with the accompanying fiscal note. There were no objections and it was so ordered.