HOUSE BILL NO. 41 "An Act relating to management of enhanced stocks of shellfish; authorizing certain nonprofit organizations to engage in shellfish enhancement projects; relating to application fees for salmon hatchery permits; and providing for an effective date." 1:31:37 PM Co-Chair Wilson discussed the bill status. She reported that the change made by the bill would enable the program to become self-sustainable and grow. She noted there was an updated fiscal note. REPRESENTATIVE DAN ORTIZ, SPONSOR, supported the bill and believed it offered much potential for the development and growth of the state's fishing industry. Co-Chair Wilson reported she had been discussing with the Department of Revenue (DOR) whether it needed to update its system; there had been a $50,000 fiscal note. She had reached out to the Department of Fish and Game (DFG) to understand why it would take time before the state would see any revenue. She read from an email explanation from Sam Rabung [director of the Division of Commercial Fisheries] (copy not on file): ADF&G will implement the regulations, accept applications, process the application through the public process and ultimately issue a permit. The earliest a permit could possibly be issued under this statute if the bill was to pass this year, would be the fall of 2020. Further, once a permit is issued, the project would have to be developed, which would include building the necessary infrastructure, collecting broodstock, producing juveniles, culturing those juveniles to the point they could be released, and allowing them to grow in the wild to a harvestable size. I would anticipate this to take, depending on the species and infrastructure needs, approximately five years or more. In a best case scenario, this takes it out to about 2025. Couple this with ADF&G practice of utilizing a precautionary approach to permitting new enhancement projects, in which a project is first permitted at a small scale in order to evaluate it for unanticipated consequences prior to increasing production to a level that could support a targeted commercial, common property fishery that could have a cost recovery assessment applied. In best case scenario, this would likely take us out to approximately 2030. Co-Chair Wilson referenced the idea of changing a system in DOR, when one may not be needed. She thought a zero fiscal note better anticipated what was taking place. Additionally, it was her understanding that the cost recovery assessment was merely one option a fishery could take, but not a requirement. She believed there were other options a fishery could choose that would not impact DOR. She communicated it was not her intent to require any agencies to take on any more costs than they already had. 1:34:54 PM Co-Chair Wilson offered DOR the opportunity to speak to the fiscal note [OMB Component Number 2476]. She lauded the department for its work and reported that she did not want DOR to have to do work that was not necessary. BRUCE TANGEMAN, COMMISSIONER, DEPARTMENT OF REVENUE, believed he understood what the chair was saying, but he did not agree with the approach in the fiscal note. He pointed to the following language in the second to last paragraph on page 2 of the note: "These costs will be absorbed by the Tax Division." He believed the language set bad precedent when there was a new tax form and regardless of what the implementation timeframe may be, the bill had an immediate effective date. He communicated it was imperative that the department update the revenue management system to be prepared for taxes to come online regardless of how they would be implemented. There had been talk about interagency receipts or receipt authority, but he did not see that included in the fiscal note. He suggested including something to help in that way for preparation. He reported that DOR could not absorb upgrades to the revenue management system. Co-Chair Wilson thought he was misunderstanding the fiscal note. She pointed to language specifying it was the committee's intent that any DOR programming costs be absorbed by the requesting entity. She stated it would not be DOR, but the fishery requesting the update. 1:37:07 PM Commissioner Tangeman stated that if that was the intent, it would be better for the information to be reflected in the fiscal note. He noted the change in revenue shown in the fiscal note was zero. 1:37:26 PM AT EASE 1:39:37 PM RECONVENED Co-Chair Wilson explained that the fiscal note would still reflect zero, but the language would be updated to specify that all costs would be charged to the fishery entity requesting the update. She asked if it worked for DOR. Commissioner Tangeman replied, "I believe so." Co-Chair Wilson specified the intent to move the bill from committee with a Department of Fish and Game fiscal note [two DFG fiscal notes] and a forthcoming note from the Department of Revenue. Vice-Chair Johnston MOVED to REPORT CSHB 41(FIN) out of committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 41(FIN) was REPORTED out of committee with a "do pass" recommendation and with one new indeterminate note from the Department of Fish and Game; one new zero note from the House Finance Committee for the Department of Revenue; and one previously published zero note: FN1 (DFG). 1:40:56 PM AT EASE 1:43:08 PM RECONVENED