Legislature(2019 - 2020)BUTROVICH 205
03/20/2020 03:30 PM RESOURCES
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SB 130-SEAFOOD PRODUCT DEVELOPMENT TAX CREDIT CHAIR MICCICHE announced that the first order of business would be SENATE BILL NO. 130, "An Act relating to a seafood product development tax credit; providing for an effective date by repealing secs. 32 and 35, ch. 61, SLA 2014; and providing for an effective date." He noted that the bill was previously heard and public testimony was started. He said the intention today is to finish public testimony, consider an amendment and look to the will of the committee. He asked Mr. Lamkin to provide a brief recap of the bill. 3:37:09 PM TIM LAMKIN, Staff, Senator Gary Stevens, Alaska State Legislature, Juneau, Alaska, stated that SB 130 continues a direct economic development policy that the State has used for some time. It is intended to support the long-term development of Alaska's value-added seafood processing industry. The salmon and herring fisheries have traditionally been targeted and SB 130 adds pollock and cod products. He detailed that the economic incentive has historically been in the form of a tax credit applied to these fisheries that invest in infrastructure and research and development to find ways of improving existing or discovering new technologies in adding value to all parts of the fish, from the gills to the collagen to the scales. MR. LAMKIN noted that there was an amendment for the committee to consider that would add fisheries including cod, sole, flounder, rockfish, and perch. CHAIR MICCICHE said the amendment does not have a fiscal note so it will not be considered today. He suggested that another committee could take it up and he would be happy to discuss the details of the amendment with those members. 3:39:04 PM CHAIR MICCICHE turned to public testimony. 3:39:17 PM MARK PALMER, President, Ocean Beauty Seafoods, Seattle, Alaska, testified in support of SB 130. He stated that Ocean Beauty Seafoods has five Alaska-based seafood processing plants in Bristol Bay, Kodiak Island, Prince William Sound, and Southeast Alaska. MR. PALMER said Alaska has supported the seafood processing industry over the years. The industry's last critical need was to diversify the salmon product mix in Alaska. The State helped the industry succeed with added-value infrastructure investment in facilities and the industry continues to benefit from the investment. SB 130 is the final piece for the industry to fully utilize its processing waste stream. He said as the seafood processing industry faces increased demands from the United States Environmental Protection Agency (EPA), an opportunity exists to develop an economic benefit from the 10 million pounds of permitted discharge from each of Ocean Beauty Seafoods' processing facilities. There is an opportunity to develop economic benefit for the State by reprocessing the industry's waste stream into finished goods and value-added products, including existing markets for nutraceutical and pharmaceutical products. MR. PALMER said the seafood processing plants in Alaska are seasonal operations and the industry needs support to get the needed value-added infrastructure in place. The industry anticipates a small fiscal note because the biggest infrastructure requirements are already in place. SB 130 will support remote salmon facilities and smaller processing plants around the state, he said. CHAIR MICCICHE agreed that the seafood processing industry has challenges ahead and his hope is to pass the legislation during the current legislative session. 3:41:45 PM CHRIS BARROWS, President, Pacific Seafood Processors Association, Tacoma, Washington, testified in support of SB 130. He said there is no better way to increase the value of Alaska's resources than to increase the utilization of harvested fish. Seafood processors have proven greater value in the past from increased salmon and herring utilization. Given the volume from the cod and pollock fisheries, increased utilization of the two species is an appropriate approach for a greater return on investment. 3:42:56 PM CHAIR MICCICHE closed public testimony. Finding no questions, he solicited the will of the committee. 3:43:11 PM SENATOR REVAK moved to report SB 130, work order 31-LS1197\M, from committee with individual recommendations and attached fiscal note. 3:43:27 PM CHAIR MICCICHE found no objection and SB 130 was reported from the Senate Resources Standing Committee.