HB 129 — An Act relating to the fisheries product development tax credit; providing for an effective date by amending the effective date of sec. 2, ch. 31, SLA 2022; and providing for an effective date.

34-LS0647\I34-LS0647\N CS FOR HOUSE BILL NO.

129(FSH)129 IN THE LEGISLATURE OF THE STATE OF ALASKA THIRTY-FOURTH LEGISLATURE - FIRST SESSION BY THE HOUSE SPECIAL COMMITTEE ON FISHERIES Referred:BY REQUEST OF THE JOINT LEGISLATIVE TASK FORCE EVALUATING ALASKA'S SEAFOOD INDUSTRY Introduced:

Finance3/10/25 Sponsor(s):Referred:

HOUSEHouse SPECIALSpecial COMMITTEECommittee ONon FISHERIESFisheries, BYFinance REQUEST OF THE JOINT LEGISLATIVE TASK FORCE EVALUATING ALASKA'S SEAFOOD INDUSTRY A BILL FOR AN ACT ENTITLED "An Act relating to the fisheries product development tax credit;

AS 43.75.037(c) is amended to read:

(c) If the property for which a tax credit is claimed is installed on a vessel, the amount of qualified investment under (a) of this section is determined by multiplying HB0129b -1- CSHB 129(FSH) New Text Underlined [DELETED TEXT BRACKETED] 34-LS0647\I the investment cost of the qualified investment property by a fraction, the numerator of which is the weight of raw macroalgae and raw eligible fish processed on the vessel by the taxpayer in the state in the tax year in which the property is first placed into service, and the denominator of which is the weight of raw macroalgae and raw eligible fish processed on the vessel by the taxpayer in and outside of the state in the tax year in which the property is first placed into service.

In this subsection, "eligible fish" does not include pollock, sablefish, or Pacific cod.

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AS 43.75.037(g) is amended to read:

(g) If, during a tax year, property for which a credit was claimed under this section is disposed of by the taxpayer, ceases to be qualified investment property, or is removed from service in the state, the tax due under this chapter is increased by the recapture percentage of the aggregate decrease in the credit allowed under this section for all prior tax years that would have resulted solely from reducing to zero the credit allowed for the qualified investment property under this section.

The amount of tax credit attributable to the qualified investment that is carried forward from prior tax years is terminated as of the first day of the tax year in which the qualified investment property is disposed of by the taxpayer, ceases to be qualified investment property, or is removed from service in the state.

For purposes of this subsection, (1) the recapture percentage during the year in which the property is first placed into service or during the first year following the year in which the property is first placed into service is 100 percent;

(2) the recapture percentage during the second year following the year in which the property is first placed into service is 75 percent;

(3) the recapture percentage during the third year following the year in which the property is first placed into service is 50 percent;

(4) the recapture percentage during the fourth or later year following the year in which the property is first placed into service is zero percent;

(5) qualified investment property used on a vessel is considered to have been removed from the state on the first day of a tax year in which the proportion of raw macroalgae and raw eligible fish processed in the state on the vessel is less than 50 percent of total weight of raw macroalgae and raw eligible fish processed on CSHB 129(FSH) -2- HB0129b New Text Underlined [DELETED TEXT BRACKETED] 34-LS0647\I the vessel in and outside of the state.

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(i) The department shall devopdeveop and implement procedures by which a taxpayer that is a fisheries business may submit the taxpayer's proposed investment to HB0129a -1- HB 129 New Text Underlined [DELETED TEXT BRACKETED] 34-LS0647\N the department and request a preliminary determination of whether the investment qualifies for the fisheries product development tax credit under this section.

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(4) "qualified investment" means the investment cost to purchase or convert depreciable tangible personal property with a useful life of three years or more that will [TO] be used predominantly to harvest or process macroalgae, increase the quality and value of macroalgaeeligible fish or eligibleused fish,predominantly orto perform an ice-making, processing, packaging, or product-finishing function that is a significant component in producing a value-added eligible fish product, including canned salmon products in can sizes other than 14.75 ounces or 7.5 ounces;

(ii) new parts necessary for, or costs associated with, converting a canned salmon line to produce can sizes other than 14.75 HB0129b -3- CSHB 129(FSH) New Text Underlined [DELETED TEXT BRACKETED] 34-LS0647\I ounces or 7.5 ounces;

(iv) ice-making machines, freezers, and other HB 129 -2- HB0129a New Text Underlined [DELETED TEXT BRACKETED] 34-LS0647\N temperature reducing technologies;

[AND]and (vi) equipment used to transform eligible fish byproduct that is discarded as waste into saleable product;

(B) does not include (i) vehicles, forklifts, conveyors not used specifically in increasing the quality and (vii)value of eligible fish or the act of producing a value-added eligible fish product, cranes, pumps, or other equipment used to harvesttransport eligible fish or processeligible macroalgae;fish products, knives, gloves, tools, supplies and materials, equipment, other than ice- making machines, that is not processing, packaging, or product- finishing equipment, or other equipment, the use of which is incidental to increasing the quality and value of eligible fish or the production, packaging, or finishing of value-added eligible fish products;

(B) does not include (i) vehicles, forklifts, conveyors not used specifically in increasing the quality and value of macroalgae or eligible fish or the act of producing a value-added eligible fish product, cranes, pumps, or other equipment used to transport eligible fish or eligible fish products, knives, gloves, tools, supplies and materials, equipment, other than ice-making machines, that is not processing, packaging, or product-finishing equipment, or other equipment, the use of which is incidental to increasing the quality and value of macroalgae or eligible fish or the production, packaging, or finishing of value-added eligible fish products;

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