STATE

Knowles proposes 20 percent income tax

JUNEAU -- Alaskans would pay a state income tax that's 20 percent of their federal tax bill under a plan being pushed by Gov. Tony Knowles.

Knowles unveiled the specifics of his $400 million tax plan Feb. 11, detailing how he would begin to chip away at an anticipated billion dollar budget deficit.

The tax plan would come through a mix of taxes on cruise ship passengers, an income tax, which is $350 million of the package, and an increase of the state's alcohol tax to a dime a drink.

Majority Republicans in the Legislature have been split on what action to take this year.

House Republicans have said they plan to try to craft a package of revenue-raising measures this session to begin closing the state's deficit.

In the Senate, the majority has called for a cap on state spending to be approved by voters before any major tax plan is approved.

Congressional audit delays Chugach plan

ANCHORAGE -- A final revision of the Chugach National Forest management plan was due to be unveiled last month, but a congressional audit has delayed the process.

Forest Service officials say they don't expect release of the plan until at least March.

Once complete, the plan will govern management of the forest for the next 10 to 15 years, regulating everything from where snowmachines can go to which lands can be developed.

The draft Chugach management plan had called for setting aside nearly a third of the forest as wilderness, including much of the Copper River Delta.

Alaska's Rep. Don Young and Sen. Frank Murkowski, both Republicans, requested an audit into how the plan was put together.

In particular, Young, Murkowski and Sen. Ted Stevens, R-Alaska, have questioned whether the Forest Service can legally recommend more lands for wilderness, which would preclude development.

Legislature hires federal expert on gas

The Legislature's Joint Committee on Natural Gas hired Hogan & Hartson, a Washington, D.C., law firm specializing in energy, to advise the Legislature on federal regulatory issues related to a North Slope gas pipeline.

"Most of the decisions on an Alaska gas pipeline will be made in Washington, D.C., by the Congress and the Federal Energy Regulatory Commission," said Sen. John Torgerson, R-Kasilof, co-chairman of the committee. "If we want to have a seat at the table, we need to develop a level of expertise on FERC issues and congressional legislation."

Karol Lyn Newman, a partner with the firm with several years of experience in all aspects of gas regulatory issues before FERC and regulatory authorities, will serve as primary contact with the committee.

NATION

Weyerhaeuser bid for Willamette approved

SEATTLE -- Weyerhaeuser Co.'s hostile takeover bid for timber rival Willamette Industries came to an official end Feb. 11 as nearly all of Willamette's shareholders agreed to Weyerhaeuser's $6.2 billion offer.

Shareholders holding 97 percent of Willamette's stock agreed to Weyerhaeuser's offer to buy Willamette stock for $55.50 per share, according to Weyerhaeuser's preliminary calculations. That makes Portland, Ore.-based Willamette a wholly owned subsidiary of Federal Way-based Weyerhaeuser.

After more than one year of resistance, Willamette's board finally agreed to the acquisition last month.

WORLD

Japanese minister fights price drops, bad debts

TOKYO -- Japan must clean up its bad bank debts along with fighting deflation if the nation hopes for economic recovery, the economy minister said Feb. 11.

Economy minister Heizo Takenaka's comments come as the government prepares a package of policies to fight deflation.

Japan has been fighting price declines as it slides into its third recession in a decade. Deflation is a dangerous obstacle to a turnaround because it brings down income and further dampens economic activity.

Pressures are high from some legislators and economists for the Japanese government and central bank to do more to fight deflation, such as setting price targets. The fall in the price of land used as collateral is also a threat to the health of the banking sector.

The Bank of Japan, which has set interest rates virtually at zero in an effort to pump more money into the financial system, has promised to maintain its loose monetary policy until consumer prices clearly stop falling.

-- Compiled from business wire services.