CS FOR SENATE BILL NO. 33(FIN) "An Act relating to a fisheries product development tax credit; and providing for an effective date." 3:07:51 PM SENATOR GARY STEVENS, SPONSOR, provided a brief description of the bill. He stated that it was a value added tax for the fishing industry. Representative Rasmussen noted having visited some of the salmon processing facilities in Kodiak. She asked about some of the federal regulatory burdens on the industry. 3:10:12 PM TIM LAMKIN, STAFF, SENATOR GARY STEVENS, indicated here were folks online that could provide further details. 3:11:00 PM AT EASE 3:12:58 PM RECONVENED 3:13:23 PM CHRISTOPHER BARROWS, PRESIDENT, PACIFIC SEAFOOD PROCESSING ASSOCIATION (via teleconference), asked if Representative Rasmussen could restate her question. Representative Rasmussen asked about some of the federal regulatory burdens on the industry. Mr. Barrows responded that there were a number of federal regulations on the industry. 3:16:39 PM Senator Stevens stressed that the bill dealt with value added products. Representative Rasmussen appreciated the comments. She was trying to highlight that the industry already was well invested in the state. Senator Stevens saw an area for water quality and remarked that companies were using the waste for fertilizers. Co-Chair Merrick asked Mr. Barrows to provide his testimony. 3:19:26 PM Mr. Barrows spoke in support of the legislation. He gave some history of his organization. He stated that the bill would reestablish the tax credit program, and expand the list of eligible species. 3:23:23 PM Vice-Chair Ortiz would be supportive of extending the tax credit. He asked how long the tax credit had been in place. Mr. Lamkin indicated it had been on the books since 2004. Vice-Chair Ortiz asked what percentage of the annual harvest went overseas for processing. Mr. Lamkin was aware that currently none of it went to Russia. However, some of it went overseas. He deferred to Mr. Barrows. Mr. Barrows deferred to ASMI. 3:25:17 PM JEREMY WOODROW, DIRECTOR, ALASKA SEAFOOD MARKETING INSTITUTE (ASMI) (via teleconference), replied that annually 70 to 75 percent of value of the product was sent overseas. Vice-Chair Ortiz asked if the percentages reflected overseas for processing. Mr. Woodrow responded, both. Vice-Chair Ortiz asked if Alaska had been able to cut into the value added percentage. Mr. Woodrow indicated his question was difficult to answer because, thought it would be difficult to say that the state had kept more seafood in the state. He thought it had increased the value for the products. Representative Wool asked for the weight shipped overseas. Mr. Woodrow could provide it to the committee in written form. 3:28:51 PM Representative Wool visited some of the processors in Kodiak, and stressed that bit of processing added value. He wondered how to value the degree of processing. //. He asked Mr. Woodrow to elaborate. Mr. Woodrow indicated that anytime a fish was taken from the water flavors added to the package which added value to a product. Co-Chair Merrick invited Mr. Woodrow to provide his public testimony. 3:32:07 PM Mr. Woodrow relayed that the Alaska Seafood Marketing Institute (ASMI) was in support of the bill. NICOLE REYNOLDS, DEPUTY DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE (via teleconference), answered that the credit applied to the fisheries business tax and was taken against the state share of the tax. 3:38:40 PM Co-Chair Merrick asked Ms. Reynolds to review the fiscal note. Ms. Reynolds reported that the revenue ranged between $3 million FY 24 and $3.4 million in FY 25, and would be deposited into the general fund. Representative Wool asked for the total tax amount received by the state. Ms. Reynolds replied that the total tax collections for FY 18 through FY 21 ranged from $46.2 million to $34.6 million. Co-Chair Merrick invited Ms. Curry to begin her testimony. 3:43:51 PM JULIANNE CURRY, PUBLIC AFFAIRS MANAGER, ICICLE SEAFOODS (via teleconference), spoke in support of the bill. She stated that the bill would allow for the purchase of equipment that would vastly improve the financial outcome of the business. 3:46:36 PM TRACY WELCH, EXECUTIVE DIRECTOR, UNITED FISHERMEN OF ALASKA (via teleconference), strongly supported SB 33. The program incentivized value added products. Representative LeBon wondered whether the tax credits could be spread out over a number of years at the pleasure of the taxpayer, or whether there was a formula to define the credit. Ms. Reynolds reported that the credit was limited to 50 percent of the value of the equipment. Co-Chair Merrick set an amendment deadline. Senator Stevens indicated that the equipment could only be used in Alaska. Co-Chair Merrick indicated Speaker Stutes had the companion bill to SB 33. She reviewed the agenda for the following meeting. CSSB 33(FIN) was HEARD and HELD in committee for further consideration.