CS FOR SENATE BILL NO. 164(FIN) "An Act relating to the salmon product development tax credit; providing for an effective date by amending an effective date in sec. 7, ch. 57, SLA 2003; and providing for an effective date." TIM BERRY, STAFF, SENATOR BERT STEDMAN, explained that the bill would give salmon processors an additional three years to claim a tax credit. He read the sponsor statement (copy on file.) 9:25:36 AM Vice-Chair Stoltze asked about the effective date of 2012. CHUCK HARLAMERT, REVENUE AUDIT SUPERVISOR, TAX DIVISION, DEPARTMENT OF REVENUE, explained that the basic credit is extended to 2008, but the carryover period is extended to 2012. Vice-Chair Stoltze asked if it is capped at $1 million a year. Mr. Harlamert replied that there is not a cap on the credit itself. The entire unused credit would be carried over. 9:27:55 AM Vice-Chair Stoltze asked about the difference in pop-top cans and the old cans. Mr. Berry explained that a normal can requires a can opener. The change was requested by the processors. Representative Kelly asked why this date is extended beyond the previous sunset date. Mr. Berry replied that the processors have taken a while to learn about the credit. Mr. Harlamert added that it was a request from the Salmon Task Force. Representative Kelly asked about outcomes of the bill. Mr. Harlamert explained about the investments attributed to the tax credit. Mr. Berry added that processors have testified in support of the tax credit and the advantages it has allowed them. Representative Kelly asked if the tax credit would be gone in three years. Mr. Berry said it is not the intention of the sponsor to extend it beyond three years. 9:32:38 AM Representative Hawker noted that he was a very strong supporter of the original legislation. It did not include the idea of new packaging products, which is a fundamental capital investment. He noted that this is a concern of his. He said he cannot support any new fiscal notes. Vice-Chair Stoltze MOVED to ADOPT Conceptual Amendment 1, on page 2, delete lines 9 and 10. Representative Hawker OBJECTED. 9:35:38 AM At ease. 9:37:13 AM Mr. Harlamert noted that under current law new canning equipment does qualify for the credit. This bill precludes a credit for that. Co-Chair Meyer asked if the extension could be reduced to two years. Mr. Berry responded that three years would allow processors to do long-range planning. 9:39:00 AM Vice-Chair Stoltze WITHDREW Conceptual Amendment 1. Representative Kelly inquired about extending it only one year. 9:39:55 AM Representative Hawker questioned the benefit of the bill and said he is comfortable extending the credit for one year. 9:40:34 AM At ease. 9:41:06 AM STEPANIE MADSON, PACIFIC SEAFOOD PROCESSORS, spoke about the pop-top can issue as it relates to the tax credit. She encouraged the Committee to leave pop-tops in the bill. Vice-Chair Stoltze asked for comment about the sunset date. Ms. Madson said one year would be better than none, but three years would be best. 9:44:34 AM KRIS NOROSZ, ICICLE SEAFOODS, PETERSBURG, (via teleconference) referred to a letter of support for SB 164 (copy on file.) She discussed one of the projects and a reason to extend the program for longer than one year. 9:47:20 AM REED STOOPS, LOBBYIST, OCEAN BEAUTY SEAFOOD, related how the company uses the credit. He noted that 40 new seasonal jobs were added. He spoke in favor of SB 164. Co-Chair Meyer said he is comfortable with the 3-year extension. Vice-Chair Stoltze agreed. 9:49:43 AM Representative Hawker MOVED to ADOPT Conceptual Amendment 2, which would delete all language except that relating to the salmon tax credit extension date of three years. Co-Chair Meyer OBJECTED. Representative Hawker explained his reasons for the amendment. Representative Joule asked for clarification of the intent of the bill. 9:52:33 AM Mr. Berry responded that the intent is indeed to expand markets and create new ones. 9:53:43 AM Mr. Harlamert clarified the intent of the amendment. Some of the language is to clarify existing law and keep taxpayers out of trouble. Thirty percent of credit claims fail because existing statute is insufficiently written. Representative Moses noted that fish taxes are shared with local governments. Mr. Harlamert replied that the credit comes entirely out of the states share and does not affect local governments. Representative Kelly stated a concern that Conceptual Amendment 2 would delete the tightening up of the statute, which is necessary. 9:57:27 AM Representative Hawker WITHDREW Conceptual Amendment 2. Representative Foster MOVED to report CSSB 164 (FIN) out of Committee with individual recommendations and with the accompanying fiscal impact note. There being NO OBJECTION, it was so ordered. CSSB 164 (FIN) was REPORTED out of Committee with a "no recommendation" recommendation and with a zero fiscal impact note by the Department of Revenue.