Legislature(2025 - 2026)ADAMS 519
02/05/2026 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB284 | |
| Presentation: Alaska Travel Industry Association | |
| Presentation: Alaska Seafood Marketing Institute | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | TELECONFERENCED | ||
| += | HB 284 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
February 5, 2026
1:38 p.m.
1:38:42 PM
CALL TO ORDER
Co-Chair Josephson called the House Finance Committee
meeting to order at 1:38 p.m.
MEMBERS PRESENT
Representative Neal Foster, Co-Chair
Representative Andy Josephson, Co-Chair
Representative Calvin Schrage, Co-Chair
Representative Jamie Allard
Representative Jeremy Bynum
Representative Alyse Galvin
Representative Sara Hannan
Representative Nellie Unangiq Jimmie
Representative Elexie Moore
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Nils Andreassen, Executive Director, Alaska Municipal
League; Jillian Simpson, President and CEO, Alaska Travel
Industry Association; Jeremy Woodrow, Executive Director,
Alaska Seafood Marketing Institute.
SUMMARY
HB 284 TAX COMPACT; SALES TAX; OIL & GAS TAX
HB 284 was HEARD and HELD in committee for
further consideration.
PRESENTATION: ALASKA TRAVEL INDUSTRY ASSOCIATION
PRESENTATION: ALASKA SEAFOOD MARKETING INSTITUTE
Co-Chair Foster reviewed the meeting agenda. He reminded
members that the committee would meet later that evening to
hear public testimony on the bill.
HOUSE BILL NO. 284
"An Act relating to the Multistate Tax Compact;
relating to apportionment of income to the state;
establishing a state sales and use tax; relating to
taxes levied by cities and boroughs; relating to the
corporate income tax; authorizing the Department of
Revenue to enter into the Streamlined Sales and Use
Tax Agreement or substantially similar agreement;
relating to the oil and gas production tax;
establishing an infrastructure maintenance surcharge
on oil; establishing a pipeline corridor maintenance
fund; and providing for an effective date."
1:40:50 PM
NILS ANDREASSEN, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL
LEAGUE, introduced the PowerPoint presentation "Alaska
Fiscal Policy" dated February 5, 2026 (copy on file). He
remarked that when he was invited to present, his first
thought was of a song lyric about gearing up and taking
someone down, but he emphasized that was not the Alaska
Municipal League's (AML) intent. He continued to slide 2
and conveyed that AML remained equally committed to working
with state agencies to address longstanding fiscal
challenge. He relayed that AML members had advocated for
the need for a state fiscal policy for more than 20 years
and it had developed resources outlining its approach. Over
the last five to ten years, AML had focused particularly on
the state's revenue shortfall.
Mr. Andreassen asserted that the core problem was the
state's revenue shortfall and whether the state had the
ability to meet its obligations. He noted that when the
state had not met its obligations, AML members had
experienced cost shifting to local governments, which
increasingly picked up burdens that otherwise would have
been the state's responsibility had fiscal policy been
addressed earlier.
Mr. Andreassen reported that member resolutions supported a
broad-based tax. He noted that there was a preference for
an income tax because it deconflicted with existing local
taxation. He added that members opposed a spending cap,
which could shift additional costs to local governments. He
stated that AML supported a sustainable Permanent Fund draw
and emphasized that the shared goal was a state able to
fulfill its constitutional and statutory obligations.
Mr. Andreassen continued to slide 3 and paraphrased a quote
asserting that the fairest statewide revenue tool was an
income tax. He explained that the proposed fiscal plan
before the committee identified some available revenue
levers, but not all of the options. The Department of
Revenue (DOR) had described the revenue levers as the
governor's selected priorities. He urged the committee to
consider the trade-offs associated with the proposals,
including the state's ability to meet obligations, impacts
on jobs and the economy, public impacts, resident and
nonresident effects, distributional consequences, and
intersections with local government authority.
Mr. Andreassen stated that AML was uniquely positioned to
focus on the sales tax proposal. He acknowledged that there
were broader fiscal policy comments, but he understood the
sales tax was a key feature of the current plan. He
described several high-level considerations, including the
proposal to eliminate the corporate income tax, which had
the least impact on jobs and the economy according to the
Institute of Social and Economic Review (ISER); the
potential effects of a spending cap that could constrain
state spending as costs rose; the fact that more than 100
local governments already used sales taxes; and the central
question of whether the proposal generated sufficient
revenue for the state to meet its obligations.
Mr. Andreassen indicated that the upcoming slides reflected
feedback from AML members and noted the breadth of
expertise involved, including legal counsel and tax
administrators from member communities. He stated he would
do his best to convey their perspectives.
1:45:03 PM
Co-Chair Foster suggested holding questions until the end
of the presentation because the committee had limited time.
Mr. Andreassen continued on slide 4 and relayed that he
would discuss the sales tax proposal in broad terms. He
indicated that sales tax was understood to be the second
most regressive revenue option with the highest non-
resident contribution. He acknowledged that a high level of
work had gone into the methodology and research presented
by ISER in the prior week, but it had also identified
limitations. There was no data for commercial property and
no analysis of oil taxes and corporate income tax in
relation to non-resident contribution.
Mr. Andreassen addressed the distinction between macro and
micro. He explained that non-resident take, as defined by
ISER, reflected an averaged amount statewide. In
communities such as Toksook Bay, Quinhagak, and Huslia,
non-resident take would effectively be 100 percent because
there was no visitor industry presence. He contrasted those
communities with locations such as Skagway, where non-
residents might account for approximately 50 percent. He
emphasized that residents in different communities would
experience the tax burden differently and that the
distinctions were important for the committee to
understand.
Mr. Andreassen noted that there was a projected revenue
potential of approximately $830 million, but if the net was
reduced by eliminating the corporate income tax, the trade-
offs would need to be considered. He observed that narrower
exemptions could result in potential revenue increases for
local governments. However, new exemptions included in the
proposal, which many local governments did not currently
have, could reduce the opportunity. He relayed that the
state would be responsible for collection under the bill
and there could be potential savings, but the cost had not
yet been determined. He noted that some cities did not
currently pay for sales tax collection because collection
occurred at the borough level, and the proposal could
create an additional cost for those cites. He remarked that
administration of a new state sales tax would be
challenging for a state that had not previously undertaken
such a function.
Mr. Andreassen emphasized that a state sales tax would be
new for the largest population areas in Alaska. He stated
that the tax would be new and different for the majority of
Alaskans and it would be weighed against other taxes
already in place. He described the concept of economic
friction as the ways in which new taxes or costs could slow
economic activity. He added that in communities with high
property taxes, there was no differentiation in the
proposal to account for local variation when layering a
state sales tax on top of existing local taxes.
1:49:03 PM
Mr. Andreassen continued to slide 5 and identified ten
items for evaluation of impact. He referenced the chart
showing the frequency of sales tax rates and noted that 59
local governments did not have a sales tax. He recalled
that DOR had outlined the way in which the average 1.82
percent had been determined in an earlier presentation. He
noted that the 1.82 percent average included 59 governments
with a sales tax of zero and did not include dozens of
unincorporated communities that also did not levy a sales
tax, which would reduce the average further.
Mr. Andreassen advised the committee to consider impacts by
specific community rather than relying on averages, and to
evaluate how the proposal would affect residents and
taxpayers within individual districts. He noted that the
average also did not account for stacking within
jurisdictions such as the Kenai Peninsula Borough or
Ketchikan, where city and borough rates were combined to
create a higher effective rate than reflected in the
averages.
Mr. Andreassen directed attention to the chart on the slide
showing average sales tax as a percentage of general fund
revenue by population. He explained that the chart
reflected the percentage of local general fund revenue
derived from sales taxes across different population sizes.
He noted that for some communities, sales tax revenue
constituted a significant portion of their general fund,
while it represented a smaller share for others. He
emphasized that sales tax revenue had distinct implications
for each jurisdiction. He would later address the impact of
a state sales tax on those local governments.
Mr. Andreassen continued on slide 6 and explained that
additional technical work was necessary. He indicated that
he had reviewed feedback from legal counsel and a senior
sales tax administration official within AML about the
proposal, and he was told that it would be unenforceable in
its current form. He emphasized that if the state chose to
pursue a sales tax, it should be workable and enforceable.
He stated that the law must contain the components
necessary to ensure effectiveness and compliance. He
stressed that achieving compliance would require work,
investment, and capacity within both the legislature and
the executive branch to understand how sales tax systems
functioned. He identified definitions and statutory
citations as areas needing improvement. He stressed that
the final product should be legally defensible and not
easily subject to court challenge by sellers attempting to
comply. He stated that AML had concerns that the current
version did not yet meet the standard.
Mr. Andreassen highlighted that there were broad business-
to-business exemption categories in the proposal, which
were new for most jurisdictions and would result in net
revenue loss for many local governments. He stated that
there were additional ways to evaluate the inclusion or
exclusion of business taxes within exemption structures.
Mr. Andreassen continued to slide 7 and explained that AML
administered remote sales tax collection for 56
jurisdictions on behalf of the Alaska Remote Seller Sales
Tax Commission (ARSSTC). He stated that AML had a 23-page
code that was legally defensible. He compared that code
against the proposed state legislation and found
deficiencies in both. He clarified that the problem with
the proposal was not lack of effort, but it simply needed
more refinement to ensure that it was defensible.
Mr. Andreassen noted that the landscape of remote sales tax
collection had evolved significantly. He relayed that the
online retailer Wayfair had particularly impacted
collections within the state [following the United States
Supreme Court decision in South Dakota v. Wayfair, Inc.].
He stated that early assumptions about implementation had
changed as states and local governments gained practical
experience. He relayed that AML and ARSSTC had developed a
system that complied with Wayfair and managed variability
across jurisdictions, including differences in rates,
exemptions, caps, and seasonality. He explained that
uniformity across all elements was not required as long as
the system effectively administered the variations.
Mr. Andreassen continued to slide 8 and pointed out
references in the bill to the Multistate Tax Compact (MTC)
and the Streamlined Sales and Use Tax Agreement (SSUTA),
which was managed by the Streamlined Sales Tax Governing
Board (SSTGB). He encouraged the committee to carefully
consider the implications of joining national systems and
to understand the commitments and compliance requirements
involved. He stated that ARSSTC was not currently part of
the agreement. He noted that other states had undertaken
extensive negotiations to establish common standards and
that non-compliance could result in negative consequences
by the governing board.
Mr. Andreassen added that participation in SSUTA required
engagement with Certified Service Providers (CSP) and
associated costs would need to be budgeted. The agreement
also required participating states to provide CSPs in a
database of all addresses in Alaska and the tax rate
applicable to each location. He stated that AML had
developed a system to satisfy the requirement without
addressing, but if the legislature chose to require
addressing, every Alaskan resident and business would need
to provide address data.
1:56:18 PM
Mr. Andreassen advanced to slide 9 and explained that the
primary reason AML was interested in the topic was because
it involved local autonomy and decision-making. He stated
that sales tax in Alaska had historically been local. He
explained that the state retained the authority to
implement a net income tax and local governments were
preempted from levying income taxes. As a result, property
tax and sales tax served as the principal revenue tools for
local governments. He stated that the structure was
grounded in the Alaska Constitution's provisions on maximum
local self-government, liberal construction of local
powers, and taxing authority granted only to cities and
boroughs. He noted that it differed from many other states,
where school districts and special districts also possessed
taxing authority.
Mr. Andreassen cautioned that if the state enacted a sales
tax that intersected with municipal authority, it should
ensure that municipal revenue capacity was not diminished.
He pointed out that under the bill, municipal exemptions
were subordinated to state law and there was no explicit
protection for voter-approved local exemptions. He
referenced community-specific policy choices such as caps,
seasonal exemptions, and senior exemptions that were not
reflected in the state proposal. He stated that many of the
provisions had been adopted through local voter approval
and would be displaced by the state's exemption list under
the bill.
Mr. Andreassen noted that municipalities would not retain
independent audit authority under the bill. He stated that
municipalities would have no clear authority to initiate
audits, participate in dispute resolution, or prioritize
enforcement. He identified the lack of authority as a
significant concern and explained that more than 100
jurisdictions currently maintained responsibility for
compliance and enforcement within their communities. He
stated that the existing neighbor-to-neighbor compliance
relationships and localized oversight would be lost under a
centralized state system.
Mr. Andreassen continued to slide 10 and described the
extent of local variability in exemptions. He stated that
across 55 local jurisdictions, there were 136 different
types of exemptions. He explained that the variability
reflected community-specific economic conditions and policy
choices. He stated that seasonal exemptions and other
adjustments were often adopted in response to local
patterns, including subsistence activity, tourism cycles,
and timing of major purchases. He emphasized that a uniform
statewide approach would not account for community-level
distinctions.
Mr. Andreassen added that the bill did not include sales
tax caps. He explained that caps limited taxability on
high-cost items such as fishing vessels, snow machines, and
automobiles. He relayed that maximum tax paid ranged from
$10 in Houston and Seldovia to $720 in Bethel. He explained
that caps were intended to protect residents from excessive
tax burdens on large purchases. He also noted that caps
could apply differently across sales tax ranges. The
portion of sale tax applied to ranges from $300 in North
Pole to $14,300 in Juneau. Caps were often specific to
vehicle purchases, but there were some caps that were
relevant to the total transaction. He relayed that 32 of
the 55 jurisdictions that ARSSTC collected for had a cap.
Mr. Andreassen stated that Juneau had recently gone through
a public vote in which voters approved an exemption for
non-prepared essential food. He explained that under the
state proposal, that exemption would be eliminated. In
addition, senior exemptions, while uncommon nationwide,
were common in many Alaska communities where there was a
longstanding priority placed on elders and seniors. He
stated that the bill did not include senior exemptions and
that seniors would likely be negatively impacted. He
emphasized that local variability existed for specific
community reasons.
2:01:59 PM
Mr. Andreassen continued to slide 11 and outlined the
practical implications of the implementation of the sunset
clause. He stated that 106 local governments currently
administered a sales tax and would be required to undertake
a months-long process to unwind their systems and notify
sellers that local collection would cease in favor of state
collection. He noted that approximately 3,300 remote
sellers would need to update their software systems that
had been developed for current collection practices. He
added that 91,000 Alaska businesses would need to update or
purchase software to comply.
Mr. Andreassen noted that while some point-of-sale systems
could activate a tax function in a "flip of a switch,
remote sales and interjurisdictional transactions required
sellers to manage multiple rates and rules. He relayed that
not all businesses used the same type of point-of-sale
system and that many service providers did not operate with
the same systems as retail establishments, such as law
firms. He emphasized that the startup costs for
implementation would be significant and the systems would
later be dismantled under the sunset clause. He stated that
businesses and local governments would build systems up and
then unwind them again, which he characterized as
contributing to continued out-migration in the state.
2:04:05 PM
Mr. Andreassen continued to slide 12 and addressed human
resource impacts. He stated that 106 jurisdictions
currently employed staff to administer local sales taxes,
ranging from 0.2 full-time equivalent positions in smaller
communities to as many as six positions in larger
communities. He explained that Section 8 of the bill
required municipalities to continue collecting certain
"other" local taxes not covered by the state proposal,
meaning some staff capacity would need to remain in place.
He relayed that AS 43.05.230(c) required local governments
to retain sufficient staff to review and inspect DOR's
collection work, which would lessen the savings impact. He
characterized the projected efficiencies as not a one-to-
one reduction and suggested that any savings would likely
be partial rather than complete. He noted that local
governments would essentially lose the economy of scale
that was currently in place.
Mr. Andreassen relayed that AS 43.44.420 allowed the
department to contract with municipalities as field agents
for collection. He suggested that the statute could create
opportunities for collaboration, potentially allowing
jurisdictions to collect both local and state taxes. He
stated that such operational discussions had not yet
occurred with the department, but it would be important to
consult the jurisdictions that were currently collecting
the taxes.
Mr. Andreassen moved to slide 13 and addressed the
distinction between remote and physical sales tax
collection. He explained that AML currently administered
remote sales tax collection on behalf of ARSSTC. He stated
that local governments had invested millions of dollars in
a system that was legally defensible, had not been
challenged, and had enrolled approximately 3,300 remote
sellers. He reported that the system currently collected
approximately $30 million in remote sales tax for the 55
participating jurisdictions. He described the system as
streamlined and capable of accounting for variability in
rates and exemptions, with standardized definitions agreed
upon by participating jurisdictions. He noted that if the
state agreed to the definitions, it could participate in
the system. He emphasized that compliance with the Wayfair
decision did not require the state to assume full control
of collection.
Mr. Andreassen explained that AML and ARSSTC had worked
through the issue of addressing through the Alaska Sales
Tax Lookup (ASTL) system. He stated that hundreds of
thousands of dollars had been invested to create an
application programming interface available to sellers,
allowing integration into sales systems and enabling
sellers to determine applicable tax rates and exemptions by
jurisdiction. He stated that the infrastructure was
currently operational and could be leveraged, but would be
displaced under the proposed legislation.
Mr. Andreassen continued to slide 14 and advised the
committee to consider not only the items that were included
in the fiscal note, but also the costs that were not
included. There were anticipated costs for training,
travel, software development, and coordination with local
governments and sellers. He noted that there was no formal
process for producing a local government fiscal note and it
would be expensive for local governments to respond to and
implement the proposed system. He stated that
implementation would also impose costs on businesses and he
urged the committee to evaluate the impacts carefully. He
directed attention to the chart on the slide that showed
average sales tax as a percentage of general fund revenue
by tax rate range. He emphasized that sales tax revenue
represented a significant share of revenue for certain
jurisdictions.
2:08:26 PM
Mr. Andreassen continued to slide 15 and stated that
communities had expressed that they did not trust the state
to administer the tax well. He referenced existing concerns
regarding delayed payments and reimbursements that could
take as long as six months. He noted that local sales tax
collections were typically managed and reconciled promptly
on a monthly or quarterly basis, but there needed to be
some assurance that it would occur with similar timeliness
at the state level, which would be challenging in the
current environment.
Mr. Andreassen explained that narrower state exemptions
would not automatically result in increased revenue for
municipalities because the bill also included new
exemptions that could reduce current collections. He noted
that the legislation did not include a hold harmless
provision or minimum revenue guarantee for local
governments. He stated that administrative fees imposed by
DOR could affect net revenues, and that staff time,
software costs, and ongoing administrative expenses needed
to be evaluated.
Mr. Andreassen encouraged collaboration on a local
government fiscal impact analysis and recommended
evaluating multiple software solutions rather than assuming
reliance on existing departmental systems. He stated that
modern software systems were capable of managing
variability across jurisdictions and could potentially
offer cost-effective solutions. He further advised that the
committee assess what contracted support would entail and
quantify the fiscal impact of newly created exemptions.
Mr. Andreassen continued to slide 16 and stated that 106
city councils and borough assemblies would be required to
amend local tax codes, revise ordinances, and eliminate
other provisions superseded by state law. He explained that
there was a need for public communication efforts, business
outreach, potential layoffs of current sales tax staff,
retraining, and adjustments within local budget processes.
He emphasized that municipalities would face uncertainty
regarding revenue projections and remittances from the
state under the bill. He urged the committee to be mindful
of the complexity involved in unwinding a fairly efficient
and effective local system. He explained that the charts on
the slide illustrated the frequency of sales tax rates and
reiterated that community-level impacts were significant.
He stated that micro-level impacts differed from statewide
averages and higher percentage ranges would create material
differences for certain communities.
Mr. Andreassen advanced to slide 17 and stated that
approximately 72 percent of Alaskans would experience the
bill as a new tax and that most of those individuals
already paid property tax. He explained that at the local
level, communities often balanced sales tax and property
tax decisions against one another. For example, sales tax
had been structured to support education funding in Kenai.
He stated that such trade-off discussions occurred locally
and would not be accounted for under a uniform state tax
layered on top of existing local systems.
Mr. Andreassen reported that 36 communities would see their
total sales tax rate increase to at least 9 percent under
the proposal. He highlighted that the rate was
significantly higher than the 1.82 percent statewide
average. He indicated that some communities could reach
combined rates as high as 13 percent, which was high in
comparison to national benchmarks. He cautioned that
consumer behavior tended to change when tax rates increased
by 2 to 3 percentage points, and behavioral changes became
more pronounced when combined rates exceeded 9 or 10
percent.
Mr. Andreassen advanced to slide 18 and identified that
certain coastal communities in the state that were largely
dependent on fishing and tourism were at particular risk
due to already high local tax rates. He noted that many of
those communities were responsible for ports and harbors
that had been transferred from the state with expectations
of continued support. He added that most maintained local
police departments and community jails and were less
reliant on state troopers. The communities had assumed
significant responsibilities and taxing to support their
local services. He expressed concern that layering a state
sales tax on top of existing rates could generate local
resistance, leading voters to reduce or reject local sales
taxes in future elections. He stated that such reductions
would diminish local governments' ability to provide
services that had increasingly shifted from the state.
2:14:30 PM
Mr. Andreassen continued to slide 19 and addressed consumer
behavior concepts such as salience and elasticity. He
stated that local officials understood that residents would
alter their purchasing behavior based on outside factors.
He noted that there was a "tipping point" for behavioral
changes. He explained that modest increases of 0 to 1
percent generally produced little behavioral change, while
increases of 2 percent prompted residents to delay
purchases or consolidate spending. He stated that at
increases of 3 to 4 percent, consumers began seeking
alternatives, particularly for high-cost items.
Mr. Andreassen reported that when total sales tax rates
exceeded 9 percent, consumption reductions tended to become
persistent. Residents would decrease spending or seek
alternatives, including relocating to lower-tax communities
within Alaska. He explained that the situation brought
about a push for reductions in local sales tax rates. He
noted that residents would look to their local government
first because they did not think they could directly alter
state policy.
Mr. Andreassen advanced to slide 20 and expressed that it
was possible to build a system that protected local
variability and had a state sales tax. He suggested that
AML could help the state accomplish the goal. He noted that
AML members were supportive of a broad-based tax, but not
at the expense of their own decision-making authority. He
suggested that it was possible to structure the bill so
that the total tax burden remained limited through creative
and careful thinking on a community-by-community basis. He
noted that other revenue options existed. He stressed
significant work was required for the bill to become
technically correct and more effective. He asserted that in
its current form, the bill would materially affect local
governments' ability to deliver services.
Mr. Andreassen continued to slide 21 and noted that there
had been earlier comments that there was no perfect tax,
which he interpreted as meaning that someone would need to
pay the tax and every tax ultimately affected someone. He
explained that while no tax avoided impacts entirely, it
was possible to mitigate some of the impacts. He
acknowledged that policymakers faced trade-offs, including
choices between new revenue and Permanent Fund Dividend
(PFD) reductions, as well as distributional considerations.
He noted that ISER had reviewed several revenue options
that could generate comparable revenue without producing
the same degree of impact on local governments.
Mr. Andreassen emphasized that limiting local government
decision making would have clear consequences which would
affect communities differently. He explained that while
statewide averages such as a 2 percent or 4 percent tax
rate and projected revenues of approximately $830 million
might appear acceptable at a macro level, the effects would
vary significantly across communities. He stressed that the
issue was not simply who paid the tax but also the trade-
offs and implementation pathways involved.
Mr. Andreassen moved to slide 22 and asserted that that the
current composition of the legislation did not resolve the
state's revenue shortfall or address the fiscal instability
discussed earlier. He stated that it would not benefit
communities in the long term if it relied on provisions
that materially affected local governments. He explained
that AML's mission was to strengthen local governments and
improve the condition of Alaska's communities, which
required the state to function as a partner. He
acknowledged the governor's engagement on fiscal policy and
observed that while earlier action would have been
preferable, the present moment still provided an
opportunity to proceed correctly. He reiterated that AML
supported measures to address the state's revenue shortfall
but not at the expense of local government authority. He
expressed AML's commitment to participating in the process
and thanked the committee.
2:19:57 PM
Co-Chair Foster thanked Mr. Andreassen and remarked that
the presentation had been clear and easy to understand. He
noted that Nome's 6 percent local sales tax could reach 10
percent if a 4 percent state tax were layered on during the
summer season. He thought the example illustrated how
significant the combined tax rate could become. He added
that AML represented communities both with and without
sales taxes and that member jurisdictions had raised
numerous implications related to the proposal.
Representative Stapp indicated that he agreed with the
concerns raised in the presentation and found most of the
information helpful. He thought the critiques were fair,
particularly those relating to legal issues. However, he
questioned whether the purpose of the bill might be
misunderstood. He thought that the intent was to fund a
statutory obligation that the state was not currently
meeting. He noted that Mr. Andreassen had stated that
municipalities were covering constitutional and statutory
obligations that the state had not fulfilled. He understood
that the proposal before the committee was a tax proposal
intended to meet one of those statutory obligations. He
asked if residents in communities that already paid local
sales taxes might be better off if a larger PFD offset the
sales tax.
Mr. Andreassen responded that some AML members had
suggested the proposal effectively amounted to the state
taxing the PFD. He explained that the concept had been
described by members as a form of double taxation, where
reducing the dividend represented the first impact and
taxing spending funded by the dividend represented the
second. He explained that he had attempted to examine the
trade-off between the increased dividend and the proposed
sales tax. Based on the calculations he reviewed, he
estimated that Alaskans earning approximately $12,500 or
less annually might benefit from the proposal because the
increased dividend could exceed the amount they would pay
in sales tax. He stated that individuals earning more than
that amount would likely pay more in tax than they would
receive from the increased dividend. He noted that he was
not an economist and that the outcome depended on
assumptions about dividend levels and spending patterns. He
emphasized that these were the types of trade-offs
policymakers were evaluating.
Mr. Andreassen clarified that AML's primary concern related
to the state's broader revenue shortfall rather than the
dividend specifically. He stated that AML focused on
funding needs such as community assistance, school
construction, major maintenance, school bond debt
reimbursement, capital budgets, and other public services.
He noted that the dividend was another statutory
obligation, but it was not the focus of AML's policy
priorities.
Representative Stapp commented that when statutory
obligations were discussed, the conversation appeared to
focus on the obligations prioritized by AML, such as
community assistance and school bond debt reimbursement,
rather than all statutory obligations, including the
dividend. He noted that the state had several statutory
obligations drawing on the budget, including community
assistance, school bond debt reimbursement, and the PFD.
Mr. Andreassen responded that he had not attempted to
select or exclude specific obligations in his remarks. He
stated that AML focused on obligations consistent with its
mission and acknowledged that other statutory obligations
existed. He added that senior exemption reimbursement was
another item that could be included on such a list and
noted that it involved roughly $100 million in obligations.
He acknowledged that additional statutory commitments
existed within the state budget.
2:25:24 PM
Representative Stapp stated that Alaska was already part of
MTC under the corporate income tax structure. He asked
whether implementing a statewide sales tax would affect
Alaska's participation in MTC or whether the bill might
unintentionally remove the state from it.
Mr. Andreassen responded that the legislation contained
references to changes involving the state's current
relationship with MTC. He intended to encourage the
committee to conduct due diligence regarding what
participation required and how membership might affect
policy choices available to the state. He stated that
legislators should understand what obligations were
associated with membership and whether different policy
options would exist outside the framework. He added that he
did not have sufficient knowledge about MTC to recommend
whether the state should or should not remain within it,
but emphasized that the committee should examine the issue
carefully.
Representative Stapp agreed that the issue warranted
further examination. He relayed that he also did not know
the answer and appreciated the point being raised on the
record because the state would likely want to avoid
unintentionally removing itself from the tax compact. He
noted that the proposal appeared intentionally designed to
establish a low-rate sales tax applied broadly with limited
exemptions. He noted that the limited exemptions seemed to
be a deliberate policy choice rather than an oversight. He
asked how AML might work with such a structure if the
policy approach remained in place.
Mr. Andreassen responded that the legislature could begin
by identifying exemptions required under federal law and
ensuring that those were included. He noted that some
federally required exemptions had already been identified
and flagged for consideration. He suggested that the
legislature examine exemptions commonly used by
municipalities and determine which ones might be
appropriate to maintain. He recommended identifying
exemptions that were important to constituents and
negotiating with local governments to streamline the system
where possible.
Mr. Andreassen acknowledged that the general principle of a
low tax rate applied broadly was sound. However, the state
would need to address the reality that many jurisdictions
currently operated with numerous local exemptions. He
explained that the proposal introduced certain exemptions
that local governments did not currently have, which could
reduce potential revenue gains for municipalities. He
cautioned that it was not automatically true that the
proposal would generate additional revenue for local
governments. He recommended beginning with required
exemptions, identifying optional exemptions, and then
determining priorities based on those categories.
Co-Chair Foster noted that the committee would hear the
bill again to ensure that all members had time to ask
questions.
HB 284 was HEARD and HELD in committee for further
consideration.
2:29:19 PM
AT EASE
2:33:17 PM
RECONVENED
^PRESENTATION: ALASKA TRAVEL INDUSTRY ASSOCIATION
2:34:31 PM
JILLIAN SIMPSON, PRESIDENT AND CEO, ALASKA TRAVEL INDUSTRY
ASSOCIATION, thanked the committee for its support over the
years. She provided a PowerPoint presentation titled
"Alaska Travel Industry Association" dated February 5, 2026
(copy on file) and she began on slide 2. She explained that
the presentation would provide an overview of the
organization, visitor numbers to Alaska, and the economic
impact of tourism. She would also discuss the current
marketing budget, the marketing program being implemented
on behalf of the state, and the return on investment (ROI)
associated with the program.
Ms. Simpson continued to slide 3 and described the Alaska
Travel Industry Association (ATIA) as the statewide trade
association for Alaska tourism. She stated that the
organization's mission was to ensure a healthy and robust
tourism economy in Alaska. She explained that the
association carried out traditional trade association
functions, including advocacy on behalf of the tourism
industry, while also serving as the official destination
marketing organization for Alaska through the Department of
Commerce, Community, and Economic Development (DCCED).
Ms. Simpson noted that the structure was somewhat unusual
compared with other states. She explained that many states
maintained a tourism division within their government,
which was what Alaska had previously done as well. However,
several entities had been combined into ATIA about 25 years
ago so the state could leverage private sector expertise in
delivering tourism marketing programs. She stated that ATIA
operated as a private nonprofit corporation governed by a
24-member elected board of directors representing various
regions and sectors of Alaska's travel industry. The
organization maintained a marketing committee composed of
industry experts who guided the tourism marketing program.
She reported that ATIA currently had 634 members statewide,
the majority of which were small businesses. She stated
that approximately 60 percent of ATIA's membership
consisted of businesses with fewer than 20 employees.
Ms. Simpson advanced to slide 4 and outlined additional
services provided by the association. She stated that ATIA
hosted an annual convention for the industry, administered
the AlaskaHost and CultureHost programs through a
memorandum of understanding with DCCED, and operated the
Adventure Green Alaska program, which she described as a
voluntary certification program for sustainable tourism
businesses. She noted that her presentation focused
primarily on ATIA's role in implementing the state's
destination marketing program.
Ms. Simpson moved to slide 5 and listed visitor statistics.
She reported that Alaska had received more than 3 million
annual visitors over the last couple of years. Those
visitors spent approximately $3.9 billion directly with
Alaskan businesses and communities. She explained that
roughly 40 percent of the spending was associated with
cruise ship visitors, and the other 60 percent came from
independent travelers. She stated that tourism activity
generated approximately $181 million in revenue for the
state and produced an overall economic impact of
approximately $5.6 billion and supported about 48,000 jobs
statewide.
Ms. Simpson continued to slide 6 and provided further
detail on visitor trends. She explained that visitor
numbers had increased slightly the previous year, with
overall visitation growing by about 1 percent. She stated
that the growth had been driven primarily by the cruise
sector, which experienced a 3.5 percent increase in
passengers traveling to Alaska. In contrast, independent
travelers declined by approximately 2.5 percent during the
same period. She noted that while Alaska experienced a 1
percent growth overall, national travel data indicated that
travel within the U.S. had increased by approximately 2
percent, meaning Alaska had not captured its full potential
share of visitors.
Ms. Simpson advanced to slide 7 and directed attention to a
chart illustrating seasonal visitation. She explained that
the majority of Alaska's visitors traveled during the
summer months, which was represented by the green portions
of the chart. Winter visitation accounted for approximately
12 percent of total visitors. She stated that winter
tourism was particularly important for communities in the
interior and southcentral regions of Alaska and had
historically been a growing segment. However, there had
been a decrease in winter visitation in the prior year for
the first time in several years. She explained that when
winter visitors were combined with summer travelers who
traveled independently rather than by cruise ship,
independent travelers accounted for approximately 42
percent of Alaska's year-round visitors. She noted that the
composition of summer visitors had changed over time, with
independent traveler market share declining while cruise
visitation increased.
2:39:58 PM
Ms. Simpson moved to slide 8 and discussed projections for
upcoming seasons. She stated that final numbers for the
summer of 2025 were still being compiled but that early
indications suggested visitation had remained relatively
flat. She reported that there was positive news regarding
transportation capacity looking ahead to 2026. She
explained that two new cruise lines planned to operate in
Alaska as well as an increase in the number of passengers
able to travel across the Gulf of Alaska on one-way cruises
departing from Vancouver or Seattle and arriving in Seward
or Whittier. She explained that the one-way itineraries
often encouraged passengers to travel further within Alaska
after their cruise. She added that airline capacity to
Alaska was also increasing, partly to accommodate the
additional cruise passengers, but would also present an
opportunity for more independent travelers. She stated that
the U.S. Travel Association projected an additional 2
percent increase in nationwide trips, which could be a
positive opportunity for Alaska if the state was able to
capture additional market share.
Ms. Simpson reported that international visitation to the
U.S. had declined by approximately 5.4 percent during the
past year, with travel from Canada declining by more than
20 percent. She stated that it was not yet clear how those
trends would affect Alaska specifically, noting that
international travelers often perceived Alaska differently
from the Lower 48 states, particularly Canadian visitors.
However, she wanted to share the information with the
committee as part of the broader travel context.
Representative Hannan asked a question regarding slide 8.
She represented Juneau and was surprised at the statement
that visitation in summer of 2025 had been flat. She stated
that local reporting in Juneau had indicated a significant
increase in visitors, with numbers reportedly rising by
several hundred thousand visitors to approximately 1.7
million. She asked whether Juneau had experienced an
unusual increase.
Ms. Simpson responded that Juneau was unique because it
received the majority of Alaska's cruise visitation. She
reiterated that the preliminary statewide information
indicated overall visitation had remained flat in 2025. She
explained that the cruise data used in the statewide totals
were based on ports of calls across Alaska.
Representative Hannan relayed that the reports circulating
in Juneau suggested that visitor volumes had increased
substantially, although businesses reported that visitors
were spending less money. She stated that local businesses
had indicated that the tourists arriving were generally
lower price-point travelers, resulting in higher visitor
volume without corresponding revenue growth. She
acknowledged that final numbers might differ once all data
were reviewed.
Ms. Simpson responded that she would review the Juneau-
specific figures and follow up. She explained that
visitation numbers were typically reported by the port and
aggregated to calculate statewide totals. She stated she
would examine whether the numbers being discussed locally
corresponded with the statewide reporting.
2:44:01 PM
Ms. Simpson advanced to slide 9 and discussed historical
tourism marketing budgets. She explained that Alaska had
historically invested significantly more funding in tourism
marketing than it was currently investing. Approximately
ten years earlier, the state had invested around $16
million annually in marketing efforts. Over time, the
investments had declined. She noted that during the COVID-
19 pandemic, the tourism industry had received support
through a federal grant administered by the governor that
helped sustain marketing during that period. The chart
displayed two main categories of funding: the light blue
bars represented investments from the state, while the
green bars represented industry contributions. She
explained that tourism businesses purchased participation
opportunities within the state marketing program, and the
contributions were reinvested directly into marketing
activities.
Ms. Simpson reported that the current tourism marketing
budget was approximately $2.5 million, with the industry
expected to contribute just under $600,000. She explained
that larger state marketing budgets allowed states to offer
more marketing programs that businesses could buy into.
When the marketing budget decreased, fewer programs were
available, which in turn reduced the amount the industry
could contribute.
Ms. Simpson continued to slide 10 and compared Alaska's
tourism marketing spending to other states. She explained
that tourism marketing was widely recognized as an economic
development tool used to stimulate travel demand. Every
state invested in tourism marketing, though the funding
structure varied. Some states maintained dedicated tourism
marketing funds, while others appropriated funds annually
from their general funds. She stated that Alaska ranked
near the bottom nationally in tourism marketing investment.
She reported that the average state spent approximately
$22.4 million annually on tourism marketing, which was
roughly $20 million more than Alaska's current marketing
budget.
Ms. Simpson continued that when considering the overall
tourism marketing expenditures nationwide, states
collectively invested more than $1 billion in tourism
advertising directed toward U.S. residents. She reported
that the overall tourism advertising market had increased
by 6 percent the previous year. She explained that the
environment was highly competitive and Alaska faced
challenges ensuring its message was visible among competing
destinations.
Ms. Simpson pointed to a graphic on the slide that compared
the geographic size of Delaware to Alaska. She explained
that Alaska and Delaware currently operated with roughly
the same size tourism marketing budget. The comparison
illustrated the challenge Alaska faced. She relayed that
Delaware was geographically small and primarily targeted
travelers in nearby metropolitan areas who could easily
drive for short visits or weekend trips. In contrast,
Alaska sought to attract travelers willing to spend
approximately nine days in the state and several thousand
dollars on travel, with trips often planned as far as nine
months in advance. She stated that the difference made
Alaska's marketing task significantly more complex and
difficult than it was for other states.
Representative Galvin remarked that investment in marketing
created opportunities for economic growth. She asked for
more information about the funding composition shown on
slide 9, noting that approximately 30 percent of the
marketing funding appeared to come from industry
contributions, or roughly $600,000, while the remainder
came from state funding of approximately $2.5 million. She
asked whether other states relied on similar industry
contributions and what portion of tourism marketing funding
in other states came from private industry.
Ms. Simpson replied that she did not believe other states
relied on industry contributions to the same extent as
Alaska. She explained that when Alaska's tourism marketing
budget had previously been larger, the industry had
contributed more than $2 million toward marketing programs.
She noted that other states had expressed admiration for
Alaska's ability to generate such industry participation,
particularly because Alaska had fewer tourism businesses
compared with many other states. However, the most common
model nationally was for the state government to fund the
marketing program directly, with industry participation
playing a smaller role. She added that she would need to
review data from other states to provide precise
percentages.
2:48:35 PM
Ms. Simpson moved to slide 11 and discussed the proposed FY
27 budget, which currently included zero dollars allocated
for tourism marketing. She relayed a story that was often
referenced by the tourism industry about Colorado. In 1993,
Colorado eliminated its tourism marketing program, reducing
its budget from $12 million to $0. Within one year of that
decision, the state experienced a decline of approximately
$1.4 billion in traveler spending. She asserted that the
example illustrated how the absence of marketing investment
could produce an immediate negative impact on tourism
visitation and economic activity.
Ms. Simpson advanced to slide 13 and explained how the
existing marketing funds were used. She described the
concept of the marketing "sales funnel," which was a model
commonly used in destination marketing. She stated that the
state's tourism marketing program focused primarily on the
top of the funnel, which represented the awareness stage.
The goal at the awareness stage was to reach the largest
possible audience of potential travelers and encourage them
to consider Alaska as a destination. Once travelers entered
the awareness stage, marketing messages were designed to
guide them through the funnel toward consideration and
ultimately conversion into visitors. She stated that
businesses and communities played a significant role in
converting interested travelers into actual visitors once
they reached later stages of the funnel.
Ms. Simpson remarked that a robust marketing budget allowed
the funnel to be wide and deep, reaching a broad audience
and sustaining interest over time. She stated that the
funnel was much narrower with Alaska's current marketing
funding level and resembled a "straw" rather than a wide
funnel. Nevertheless, the organization continued to focus
its efforts on the upper and middle portions of the funnel
to maximize awareness.
Ms. Simpson advanced to slide 14 and detailed the target
audiences for Alaska's tourism marketing program. She
explained that the organization used both behavioral and
geographic targeting strategies to reach potential
travelers who were most likely to visit Alaska. Behavioral
targeting focused on individuals already interested in
travel or interested in activities commonly associated with
Alaska, such as viewing the aurora borealis, hiking,
fishing, glaciers, Alaska Native culture, and cruising.
Geographic targeting focused on specific markets where
marketing efforts were most likely to generate a strong
return on investment.
s. Simpson stated that the program currently focused on six
geographic markets where marketing efforts were
concentrated. She explained that the markets were selected
based on previous return on investment as well as the
availability of nonstop flight access to Alaska. In
addition, the association developed a market potential
model the previous year, which provided detailed data to
support marketing decisions.
Ms. Simpson continued to slide 15 and explained that the
model was developed after an advertising effectiveness
study conducted several years earlier. The study evaluated
what visitors spent in Alaska after seeing the state's
advertising and analyzed the impact that advertising
exposure had on travel behavior. The study also examined
where those travelers originated. Using the information,
ATIA developed a model evaluating nearly 300 different
markets in the Lower 48 states. The model identified
traveling households in each market and estimated the
effects if approximately 44 percent of those households
were exposed to Alaska tourism advertisements, which made
the household an aware household. She explained that the
model estimated the cost of reaching those households
through advertising, the number of travelers who would
visit Alaska as a result of the advertising rather than
through trips they would have taken anyway, the spending
the incremental visitors would generate in Alaska, and the
resulting ROI from the advertising expenditures for both
the industry and the state.
Ms. Simpson noted that the information allowed the
association to refine marketing decisions. She relayed that
Phoenix had been added as a new marketing market because of
both increased nonstop flight service to Alaska and the
strong projected return on investment from that market. She
remarked that marketing decisions involved both analytical
data and judgment. Decisions could be based on prioritizing
advertising return on investment, total economic impact, or
media efficiency, and ATIA evaluated all of those factors.
Ms. Simpson added that the model revealed that advertising
in Seattle had reached a saturation point. She explained
that additional advertising in Seattle was no longer
producing significant incremental visitation because it
already had a high level of brand awareness regarding
Alaska travel. As a result, the association discontinued
advertising in the Seattle market.
2:53:11 PM
Ms. Simpson advanced to slide 16 and discussed how the
marketing budget was distributed. She stated that the
majority of the budget supported advertising and public
relations efforts designed to reach potential travelers at
the top of the marketing funnel. Additional portions of the
budget supported the travel trade program, the
organization's website, and other outreach efforts.
Ms. Simpson explained that a portion of the budget was
dedicated specifically to cultural tourism. She emphasized
that the association wanted to ensure visitors understood
that Alaska had always been and remained an Indigenous
place. She stated that cultural tourism messaging had
become a central element of the state's tourism marketing
strategy. To support that effort, ATIA produced a cultural
guide that was inserted into every vacation planner
distributed to potential visitors. She noted that the
association had not produced a new vacation planner during
the current year and was instead distributing a previous
edition. She explained that much of the information about
traveling to Alaska remained relevant over time, although
the primary drawback was that newer tourism businesses and
recently developed tours were not included.
Ms. Simpson moved to slide 17 which illustrated examples of
the current advertising creative used in the campaign. She
explained that ATIA continued to use the "Also Known As"
campaign theme, which highlighted several of Alaska's
primary tourism marketing pillars, including the aurora
borealis, glaciers, wildlife, culture, and mountains. The
association had also conducted a brand health study
examining what consumers sought when choosing travel
destinations. The study revealed that many travelers were
interested in unique lodging experiences, but many were not
aware that Alaska offered numerous distinctive lodging
options. As a result, the association incorporated imagery
such as an igloo-style structure into its advertising to
highlight those opportunities.
Ms. Simpson stated that the brand research also revealed
that travelers perceived Alaska as a wilderness destination
but were uncertain about how accessible it was. The
association responded by incorporating messaging showing
that Alaska could offer both wilderness experiences and
accessibility for travelers. She explained that those two
findings from the research had been incorporated into the
current advertising campaign.
Ms. Simpson moved to slide 18 and discussed the media
tactics used in the campaign. She explained that the
program now relied entirely on digital advertising as
budget constraints had eliminated several previous
advertising formats. In earlier years, ATIA had placed ads
on streaming platforms such as Hulu, Disney+, and Netflix.
Interactive advertising formats had also previously been
used, allowing viewers to engage with travel advertisements
through multiple devices. However, the current budget no
longer allowed those options.
Ms. Simpson stated that digital advertising still provided
an advantage because campaigns could be optimized in real
time. If particular advertising content, geographic
markets, or demographic groups responded more strongly to
certain advertisements, the association could increase
advertising investment in those areas to improve results.
Ms. Simpson continued to slide 19 and offered information
about the association's website, TravelAlaska.com. She
reported that year-over-year comparisons showed a decline
in the number of visitors to the site. She explained that
part of that decrease was driven by reduced advertising in
the marketplace. She added that organic traffic had also
declined, which she attributed to the rise of artificial
intelligence (AI) search tools. She stated that both
factors affected the organization's ability to convert
potential travelers. With fewer visitors to the website,
fewer Alaska businesses received referrals through the
site, fewer people ordered the vacation planner, and fewer
individuals signed up for email communications. She
explained that the reductions made it more difficult to
convert potential travelers into participants in Alaska's
tourism program.
Ms. Simpson explained that ATIA was responding by investing
in a shift in its content strategy so that the website
would perform better in AI-based search environments. In
the past, most travelers used traditional search engines
such as Google by typing search terms, after which search
results would display websites such as TravelAlaska.com
based on keywords and content. She explained that AI search
tools now gathered information by scanning and aggregating
content from multiple websites. If the Travel Alaska
website was not structured in a way that allowed AI tools
to easily retrieve the information, the site's content
might not appear in those search results. She explained
that because the association was the authoritative source
for Alaska travel information, it was important that the
website's content appeared prominently in AI search
responses.
Ms. Simpson reported that the association was reorganizing
its website content to reflect how users asked questions in
AI systems. For example, if a traveler asked an AI search
tool where the best place to view the northern lights was,
ATIA wanted the answer to identify Alaska rather than
destinations such as Norway. She stated that the
organization was rewriting and restructuring website
content to address those types of questions directly. In
addition, the association was restructuring the technical
back end of the website to improve its compatibility with
AI search tools.
Ms. Simpson explained that AI systems also evaluated
whether a source was widely recognized as an authority,
which required the association to ensure that other third-
party platforms referenced Alaska travel information in
ways consistent with the Travel Alaska website. As a
result, ATIA continued to invest in public relations
efforts so that its messaging appeared consistently in news
media, social media platforms, and travel review sites such
as TripAdvisor.
2:58:06 PM
Ms. Simpson continued to slide 20 and reported that the
association's public relations program worked with travel
journalists, editors, and writers to generate coverage of
Alaska tourism. The goal for the year was to assist at
least 250 travel media professionals in producing stories
about Alaska and to generate approximately $25 million in
advertising-equivalent earned media coverage. One of the
primary public relations initiatives was the Alaska Media
Roadshow. The program brought travel writers together with
Alaska tourism businesses so that those businesses could
pitch story ideas directly to the media. She explained that
the event had proven to be an effective pipeline for
generating positive travel coverage about Alaska.
Ms. Simpson stated that ATIA also maintained an active
presence on social media platforms. Although the engagement
rate appeared to be approximately 3 percent, she explained
that the level was considered high for destination
marketing organizations. She added that the association
also partnered with social media influencers and cultural
ambassadors as part of its cultural tourism strategy. The
partnerships included collaborations with Alaska Native
content creators who shared stories about their communities
and cultures with their audiences.
Ms. Simpson explained that the association also worked
closely with the travel trade, which included travel
advisors, travel agents, and tour operators. The goal of
those efforts was to help industry partners design and sell
travel itineraries to Alaska throughout the year. The
association attended national trade shows, hosted
familiarization tours to allow travel professionals to
experience Alaska firsthand, and operated an online
training program known as the Alaska Certified Expert
program.
Ms. Simpson continued to slide 21 and explained that due to
budget constraints, ATIA would attend fewer trade shows and
host fewer familiarization tours during the current year.
However, there was an upcoming event in Fairbanks called
the Amazing Alaska Experience. The event would bring travel
advisors to Alaska during the winter season so they could
experience winter tourism offerings and meet directly with
Alaska tourism businesses.
Ms. Simpson added that the association maintained a small
international presence through a representation office in
Germany. The office represented Alaska in German-speaking
Europe, including Austria and Switzerland. The office
worked primarily with travel trade partners and media in
those markets to maintain awareness of Alaska as a travel
destination and to support nonstop summer flights operating
across the Arctic to Anchorage.
Ms. Simpson added that ATIA also maintained a small
international marketing presence in India. She noted that
the program there might seem surprising, but India
represented one of the fastest growing international travel
markets to the U.S. and to Alaska. She explained that the
program delivered strong value because the cost of
operating in India was relatively low due to exchange
rates, allowing the association to achieve a favorable
return on a small investment.
Ms. Simpson advanced to slide 21 and detailed the key
performance indicators (KPIs) for the marketing program.
She stated that during the previous fiscal year, the
program operated with a $5 million budget. She explained
that the metrics on the slide illustrated the program's
effectiveness and the indicators were constantly monitored
by ATIA. While the association was proud of the return
generated by its marketing activities, she emphasized that
the most important return was the economic impact produced
by visitors traveling to Alaska.
Ms. Simpson continued to slide 23 and noted that an
advertising effectiveness study conducted several years
earlier had demonstrated measurable impacts from tourism
marketing. The study showed that individuals who saw Alaska
tourism advertisements were twice as likely to visit Alaska
as those who did not see the ads. She explained that the
finding demonstrated that marketing could influence travel
decisions and increase visitation beyond what would occur
without marketing. She also reported that 71 percent of the
visitors influenced by the advertisements were independent
travelers.
Ms. Simpson added that a brand health study conducted the
previous year revealed what she described as a "halo
effect." She explained that tourism advertising influenced
not only visitation but also perceptions of Alaska more
broadly. Survey results indicated that individuals who saw
Alaska tourism advertisements were 80 percent more likely
to view Alaska as a good place to live and were twice as
likely to consider Alaska a good place to start a business
or career. She stated that tourism marketing therefore
contributed to broader interest in investing and living in
Alaska.
3:03:13 PM
Ms. Simpson moved to slide 24 and described the pie chart
on the slide as the "Circle of Life," which illustrated how
tourism marketing investments generated economic activity.
She explained that when the state invested in tourism
marketing, it generated more visitors. Increased visitation
produced additional spending in Alaska communities, which
generated economic activity and higher revenues to the
state. She reported that tourism generated approximately
$181 million annually in revenue to Alaska. She noted that
about $15 million of the revenue came from the vehicle
rental tax, which was largely paid by independent
travelers. She stated that roughly 70 percent of the
vehicle rental tax revenue came from out-of-state visitors.
Based on the proportion, ATIA's request was for
approximately $10 million to be reinvested into tourism
marketing from that revenue stream.
Ms. Simpson acknowledged that the legislature faced many
competing fiscal challenges. However, the association hoped
to work with the legislature to determine what was an
appropriate level of investment that would allow Alaska to
remain competitive in the tourism marketplace and continue
attracting visitors to the state.
Co-Chair Josephson understood that the tourism marketing
budget for FY 26 was approximately $2.5 million, ATIA was
requesting $10 million for FY 27, and the the governor's
proposed budget currently contained no funding for tourism
marketing. He asked if his understanding was correct.
Ms. Simpson responded in the affirmative.
Representative Hannan asked whether the $15 million in
revenue represented the total amount of revenue generated
by the vehicle rental tax.
Ms. Simpson replied that the $15 million figure represented
the total revenue generated by the tax, including amounts
paid by Alaska residents.
Representative Bynum remarked that AS 43.52.080 allowed the
legislature to appropriate vehicle rental tax revenue for
tourism marketing purposes. She relayed that she generally
opposed taxes that lacked a clear purpose, but in this case
the tax had been established to support tourism marketing,
which in turn produced direct economic benefits for Alaska
communities. She asked how disruptions in the broader U.S.
economy might influence visitor spending patterns when
travelers came to Alaska communities.
Ms. Simpson responded that leisure travel was often one of
the first types of spending people reduced when economic
uncertainty arose. However, that research from the U.S.
Travel Association showed that although travelers might
reduce spending levels, the intent to travel remained
relatively strong. She explained that many Americans viewed
travel as an important part of their lives and continued to
prioritize it even when budgets were constrained. She added
that when economic conditions or regulatory factors became
barrier to travel, marketing could help overcome the
barriers by keeping Alaska visible as a destination. She
stated that marketing played an important role in filling
the travel funnel and attracting visitors, particularly
when budgets were tight. She emphasized that Alaska became
more vulnerable to declines in visitation when tourism
marketing funding was reduced or eliminated.
3:07:17 PM
Representative Tomaszewski noted that Alaska had received
approximately three million visitors during the previous
year and asked what was considered an ideal number of
visitors. He questioned how many visitors Alaska could
realistically accommodate given existing infrastructure
limitations.
Ms. Simpson replied that the question was an excellent one
but stated that she did not have a specific number for an
optimal visitor capacity. She explained that Alaska was
geographically vast and that many communities hoped to
expand tourism as a way to strengthen their local
economies. She added that visitor distribution was an
important consideration, noting that spreading visitors
across more communities and regions could help accommodate
growth. She relayed that Alaska had significant opportunity
to grow its tourism sector and the potential for growth
remained substantial.
Representative Galvin asked for confirmation that
approximately 70 percent of individuals renting vehicles in
Alaska were visitors from outside the state.
Ms. Simpson replied that ATIA was confident in that
estimate. She explained that the figure originated from
visitor profile research conducted by the McKinley Research
Group. The study analyzed visitor survey data and
established ratios used to estimate visitor behavior. The
ratios were also applied to airline passenger arrivals when
estimating visitor volumes. She stated that the association
had periodically reviewed the data to determine whether the
ratio had changed, and it had remained relatively
consistent over time. She expressed confidence in the
estimate that approximately 70 percent of vehicle rental
tax revenue was paid by out-of-state visitors.
Representative Galvin asked whether international markets
showed particular interest in culture tourism.
Ms. Simpson responded that cultural tourism was one of the
fastest growing segments of the tourism market. She stated
that travelers in general showed strong interest in
cultural tourism experiences, but international visitors
demonstrated especially high interest in Alaska Native
cultural experiences. She added that Alaska had already
seen growth in that area as new cultural tourism
opportunities had developed, but she believed there
remained significant potential for further expansion.
Co-Chair Josephson thanked Ms. Simpson for her
presentation. He indicated that the committee would proceed
with the next presentation.
^PRESENTATION: ALASKA SEAFOOD MARKETING INSTITUTE
3:10:57 PM
JEREMY WOODROW, EXECUTIVE DIRECTOR, ALASKA SEAFOOD
MARKETING INSTITUTE, asked how much time he had for the
presentation.
Co-Chair Josephson responded around 40 minutes.
Ms. Woodrow expressed that it was a pleasure to follow the
presentation by the ATIA, noting that there would be some
similar themes between the work of the two organizations.
He explained that the work conducted by ATIA and the Alaska
Seafood Marketing Institute (ASMI) complemented one
another. He introduced the PowerPoint presentation "Alaska
Seafood Marketing Institute (ASMI)" dated February 5, 2026
(copy on file). He continued on slide 2. He stated that he
would begin with an overview of ASMI, review ASMI's
budgets, discuss the current economic condition of the
seafood industry, describe the institute's marketing goals,
and provide examples of tactics used to meet those goals.
Mr. Woodrow continued to slide 3 and explained that ASMI
served as the state's official seafood marketing arm. He
relayed that the institute operated as a public corporation
within DCCED and was established in statute to maximize the
economic value of Alaska's seafood resources. He stated
that ASMI pursued its mission by building and protecting
the Alaska seafood brand, developing markets for Alaska
seafood products worldwide, and working closely with the
Alaska seafood industry to promote products. The
organization was governed by a seven-member board of
directors appointed by the governor, which consisted of
five seafood processors and two commercial harvesters. In
addition, ASMI had several ex officio members who included
members of the legislature and representatives for the
administration.
Mr. Woodrow stated that the board had also established nine
advisory committees composed of commercial harvesters and
representatives from the seafood processing sector. The
committees provided advice to the board regarding marketing
priorities for different sectors of the seafood industry
and for specific species harvested in Alaska. The advisory
committees allowed ASMI to receive broader input from
industry participants to ensure its marketing activities
aligned closely with industry needs.
Mr. Woodrow advanced to slide 4 and relayed that ASMI's
mission was to increase the economic value of Alaska's
seafood resources. He explained that the organization
worked to increase positive awareness of the Alaska seafood
brand while emphasizing the sustainable management of
Alaska fisheries. He stated that ASMI coordinated closely
with the seafood industry and implemented both proactive
and responsive marketing strategies to address changing
market conditions. The organization also provided quality
assurance guidance and technical information to industry
participants and maintained prudent fiscal management to
ensure that marketing investments generated strong returns
for the state, fishing industry, and coastal communities.
Mr. Woodrow continued to slide 5 and explained that ASMI's
marketing activities focused on retail and food service
promotions. The organization used traditional advertising,
public relations campaigns, and social media outreach. He
added that ASMI also facilitated access to U.S. programs
through food aid initiatives and provided technical
resources to the seafood industry to ensure Alaska seafood
products had fair access to domestic and international
markets. The efforts helped increase the value of Alaska
seafood by generating price premiums relative to competing
seafood products, reducing inventory backlogs when they
occurred within the industry, and creating incremental
sales opportunities in both new and existing markets.
Mr. Woodrow moved to slide 6 and explained that ASMI's
marketing activities were organized into five primary
program areas: international marketing, domestic marketing,
seafood technical programs, communications and public
relations, and a global food aid program. The food aid
program primarily worked with purchasing programs
administered by the U.S. Department of Agriculture (USDA),
although other programs also existed.
3:15:35 PM
Mr. Woodrow turned to slide 7 and detailed ASMI's budget.
He stated that if ASMI's FY 26 budget was compared with the
governor's proposed FY 27 budget, the two would appear
relatively similar overall. He explained that ASMI
typically received funding from three primary sources in
any given fiscal year.
Mr. Woodrow explained that the first source was seafood
marketing assessments, which appeared in the budget as
statutory designated program receipts. He stated that the
assessments were paid by the seafood industry and
functioned as a self-assessment established in statute. The
statute allowed the industry to vote to increase, decrease,
or eliminate the assessment. He explained that the current
rate was set at one-half of 1 percent of ex-vessel value.
He clarified that ex-vessel value referred to the first
sale of seafood from a commercial fisher to a processor.
Mr. Woodrow explained that the transaction represented the
initial commercial sale of seafood landed in Alaska and
could occur at a tender vessel or directly at a dock. He
noted that the FY 26 and FY 27 assessment amounts appeared
similar in the budget figures. However, the budget numbers
also included some carry-forward funds and spending
authority because the assessment revenues were received in
quarterly payments collected by DOR. The assessment was
based on the price paid to fishers, but the processors
collected the funds and remitted them to DOR on behalf of
the industry. He stated that the process created an
interesting arrangement in which the assessment was
calculated from fisher's ex-vessel value but paid by
processors through the tax collection process.
Mr. Woodrow stated that ASMI had also been successful in
recent years in increasing the amount of federal funding it
received. The majority of federal funds came through the
USDA's Foreign Agricultural Service. The funds came with
restrictions, including a requirement that the money be
spent on international marketing activities. He noted that
he would discuss the international marketing program in
greater detail later in the presentation.
Mr. Woodrow explained that ASMI also received a $5 million
unrestricted general fund (UGF) appropriation in FY 26. He
clarified that the appropriation had been included as part
of the FY 25 supplemental budget and was structured as a
multi-year appropriation. He noted that a small portion of
the funds had been spent during the closeout of FY 25, but
the majority would be spent during FY 26. He expressed
appreciation for the legislature's support and indicated he
would show how the funding affected ASMI's spending plan in
the next slide.
Mr. Woodrow highlighted that the total FY 26 budget
authority was approximately $31.4 million, although the
actual spending plan was lower. He explained that it was
common practice for the ASMI board to maintain a lower
spending plan so that funds would remain available at the
start of the following fiscal year. He relayed that ASMI
needed to begin each fiscal year with funds already in
reserve to start marketing activities on July 1, because
some of the statutory designated program receipts
represented spending authority rather than immediately
available cash.
Mr. Woodrow advanced to slide 8 and detailed the way in
which the FY 26 spending plan was distributed across ASMI's
major program areas. Approximately 30 percent of the budget
supported domestic marketing activities. He noted that the
domestic category included the global food aid program
administered through USDA as well as communications, public
relations, and retail and food service promotions. He
stated that just under 60 percent of ASMI's budget
supported international marketing programs. He explained
that the statutory designated program receipts representing
industry assessments provided the required match for
federal funding received through the USDA Foreign
Agricultural Service (FAS). He noted that the share of
federal funds used for international marketing had grown
significantly in recent years and was expected to remain
relatively high.
Mr. Woodrow explained that federal funding for
international marketing had increased because of federal
legislation known as the One Big Beautiful Bill. The
legislation expanded the Market Access Program (MAP), a
competitive grant program administered by FAS. He stated
that ASMI participated in the program as a commodity board
and competed with many other commodity groups for funding.
The groups included organizations representing U.S. beef,
pork, poultry, citrus, and California almonds, among many
others.
Mr. Woodrow explained that approximately 100 different
commodity organizations applied for funding through MAP.
Historically, ASMI had received about $4.5 million annually
through the program, which he indicated was represented by
the green bar on the pie chart on the slide. He explained
that ASMI expected to receive additional funds in future
years because the program's funding had been doubled
through the recent federal legislation, although final
allocations had not yet been announced.
Mr. Woodrow stated that the grant awards had been delayed
due to a federal government shutdown earlier in the fall,
which had postponed the award process by approximately one
to two months. However, once the new awards were announced,
the increased funding would allow ASMI to expand its
international marketing efforts. He noted that the federal
funds did not require additional matching funds from
industry beyond the statutory assessments already in place.
Mr. Woodrow advanced to slide 9 and offered an overview of
trends in ASMI's budget over time. He explained that the
organization's budget had experienced some volatility in
recent years because the seafood industry itself had faced
economic fluctuations. He indicated that declines in
seafood prices reduced the revenue available for marketing
because ASMI's industry assessment revenues were tied to
ex-vessel value.
Mr. Woodrow highlighted FY 20 as an example of the
volatility. He explained that the dark blue bar on the
chart represented statutory designated program receipts
generated by the industry assessment paid by seafood
processors based on the value of seafood harvested in
Alaska. He stated that FY 20 was one of the lowest years on
record for revenues due to the unusual conditions across
the state and within the seafood industry created by the
COVID-19 pandemic. Despite the challenges, fishers were
able to continue fishing during that year, which was
important for maintaining revenue and continuing to supply
seafood to consumers in the U.S. and around the world.
3:21:18 PM
Mr. Woodrow explained that beginning in FY 22 and FY 23,
ASMI's revenues began to increase. He noted that some of
the increase resulted from federal funding through the
Coronavirus Aid, Relief, and Economic Security (CARES) Act
and the American Rescue Plan Act (ARPA), which allowed the
organization to increase its spending plan temporarily.
Mr. Woodrow explained that Alaska experienced the largest
sockeye salmon return in history in Bristol Bay in 2022.
While large harvests were generally positive for the
fishing industry, the timing created major market
challenges. At the time, global inflation was increasing
and consumer spending patterns were shifting following the
pandemic. Consumer spending remained strong in early 2022
and seafood processors paid high prices to fishers for the
sockeye harvest.
Mr. Woodrow explained that consumer spending declined
significantly later in the year. As a result, processors
were left with large inventories of sockeye salmon that
could not be sold at prices high enough to cover the costs
paid to fishers. Maintaining large inventories in cold
storage required additional expenses, including storage
costs and financing costs associated with loans used to
hold the product. As inventories grew, market prices for
seafood began to decline because buyers were unwilling to
pay the higher prices processors had originally paid.
Mr. Woodrow added that global events also contributed to
the price decline. Following the Russian invasion of
Ukraine, Russia began selling large volumes of seafood in
global markets at extremely low prices in order to generate
revenue. The prices were significantly below the cost of
Alaska seafood, making it difficult for Alaska products to
compete.
Mr. Woodrow explained that the situation worsened in the
summer of 2023 when Alaska experienced a large pink salmon
return. Processors informed fishers that they could not
purchase additional fish because the market price for
salmon had fallen below the cost of purchasing and
processing the product. He noted that Russia's continued
sale of seafood at low prices contributed to the depressed
market conditions. During that time, segments of the
seafood industry approached ASMI for assistance in moving
inventory, particularly sockeye salmon. The ASMI board
determined that the organization needed to increase
marketing efforts to help sell existing inventory. As a
result, the board increased ASMI's spending plan using
available reserves. The increase in marketing expenditures
was represented by the blue dotted line on the chart for FY
23 and FY 24.
Mr. Woodrow explained that when the board increased
spending, it did not anticipate that ex-vessel values would
decline significantly in the following years. However, the
decline occurred in FY 24, FY 25, and FY 26, which reduced
ASMI's revenue from industry assessments. As a result, both
revenues and carry-forward balances began to decline, and
the values decreased in the following year. He stated that
ASMI was aware of the trends and had developed a long-term
financial forecast extending through FY 32. The goal of the
forecast was to align ASMI's spending plan with expected
revenues over time. He explained that ASMI planned to
gradually reduce spending until the budget stabilized
around FY 31 and FY 32.
3:24:19 PM
Mr. Woodrow advanced to slide 11 which included a chart
illustrating ex-vessel values across recent years. He
explained that the seafood industry experienced a
relatively stable period from 2015 through 2019. The
pandemic time period represented an anomaly, and conditions
appeared to improve again in 2021. However, the industry
experienced a sharp downturn beginning in 2022 and reached
its lowest point in 2024. He expressed hope that 2024
represented the bottom of the downturn. Preliminary figures
from the most recent year indicated that there had been
some improvement, although he cautioned that conditions had
not yet fully recovered. He explained that the industry
needed several consecutive years of stability before it
could conclude that the downturn had ended. He emphasized
that stability was critical for Alaska's seafood industry.
He explained that fishers, processors, and communities
across the state depended on the industry's economic
strength.
Mr. Woodrow noted that despite the downturn, the seafood
industry remained a major economic driver for Alaska. In
2023 and 2024, which were among the least successful years
in the past 25 years, the commercial fishing industry still
contributed approximately $5.2 billion to Alaska's economy.
He explained that the industry's typical annual
contribution was closer to $6 billion or slightly higher.
He added that fishers ex-vessel values had declined to an
average of approximately $1.5 billion during 2023 and 2024.
He noted that the averages remained lower than what the
industry would normally expect during stable market
conditions.
Mr. Woodrow shared that Alaska remained the largest
contributor to seafood production in the nation. Nearly
two-thirds of all seafood produced in the U.S. originated
from Alaska. However, Alaska only represented approximately
1 percent of total seafood production in the world. He
explained that global production figures included both
aquaculture and wild-capture fisheries. He shared that
Alaska often performed above its weight in the global
seafood market, but the industry continued to face
challenges.
Mr. Woodrow continued to slide 12 and explained that
commercial fishing activity reached communities throughout
Alaska. He reported that about 58 percent of the
approximately 19,000 fishers who participated in Alaska
fisheries annually were Alaska residents, representing
roughly 11,000 individuals. He noted that many of the
fishers lived in major population centers, particularly the
Kenai Peninsula, Anchorage, and the Mat-Su Borough, which
together accounted for nearly 3,000 resident fishers.
Additional concentrations of fishers were located in
communities such as Kodiak and Dillingham. He stated that
the seafood industry contributed approximately $125 million
annually in state, municipal, and federal taxes and self-
assessments paid by fishers and seafood processors.
Mr. Woodrow advanced to slide 13 and described how ASMI was
responding to the challenges facing the industry. He
explained that the ASMI board had directed staff to focus
on three primary priorities over the past year. The first
priority was to capitalize on the ban on Russian seafood
imports and increase the market share of Alaska seafood
within the U.S. The second priority was to increase brand
recognition for key Alaska seafood species, including
sockeye salmon, pink and keta salmon, sablefish, pollock,
and surimi products. The third priority was to strengthen
the Alaska Certified Seafood International (CSI)
certification program as the preferred origin-based seafood
certification program in the nation.
Mr. Woodrow explained that CSI was previously known as the
Responsible Fisheries Management program. The program was
recently rebranded because certification activities had
expanded internationally beyond Alaska. The certification
program verified responsible fisheries management practices
and served as a counterpoint to the Marine Stewardship
Council certification label, which continued to certify
Russian seafood products in global markets.
Mr. Woodrow continued to slide 14 and explained that
competing with Russian seafood was a major challenge for
Alaska producers. He noted that Russia and Alaska harvested
many of the same species in the same ocean regions;
however, Russian seafood products were often sold at
significantly lower prices because Russian fisheries
operated under different regulatory, labor, and trade
practices. As a result, Russian products frequently
undercut Alaska seafood prices in international markets. He
stated that it was important to prevent those products from
undercutting Alaska seafood within the U.S., which remained
the most important market for Alaska seafood.
Mr. Woodrow reported that in December of 2023, the federal
government issued executive orders prohibiting the import
of Russian seafood into the U.S. The ban included a grace
period that allowed importers to continue bringing in
previously contracted shipments for several months.
Importers used that period to build inventory of Russian
seafood, which could supply the market for approximately 18
months. He relayed that the ban took full effect in May of
2024. He added that in April of 2025, the executive order
was extended, allowing the prohibition on Russian seafood
imports to remain in place. He noted that the order would
need to be renewed every year.
Mr. Woodrow reported that the market effects of the ban
were beginning to appear. Companies that previously
imported Russian seafood had begun contacting Alaska
seafood suppliers because their previous supply had been
cut off. The companies were seeking new partnerships with
Alaska seafood producers and were interested in promoting
Alaska seafood products to their customers. He stated that
ASMI supported continuing the ban on Russian seafood
imports. He noted that House Fisheries Committee had
recently passed HJR 29 out of committee [on 2/3/26]. The
resolution supported continuation of the ban and would
communicate the support to Alaska's congressional
delegation and federal administration officials in
Washington, D.C.
Co-Chair Schrage noted that the committee had approximately
ten minutes remaining before members had to leave for other
obligations. He asked Mr. Woodrow to move through the
remaining slides efficiently.
3:30:33 PM
Mr. Woodrow acknowledged the time constraint and stated
that he would conclude slide 14 with one final observation.
Although Russian seafood had been removed from the U.S.
market, other international seafood producers had
identified the U.S. as a growth opportunity because of the
absence of Russian products. As a result, competitors from
countries such as Norway, Chile, and Iceland were also
increasing efforts to capture market share in the U.S.
Mr. Woodrow continued to slide 15 and stated that American
consumers were price sensitive when purchasing seafood.
Seafood products were generally more expensive than other
protein options, and price sensitivity became particularly
visible during 2022 when inflation increased significantly.
He noted that research showed that the second most
influential factor in seafood purchasing decisions for U.S.
consumers was whether the product was wild caught. The
finding aligned well with Alaska's long-standing marketing
strategy. For decades, marketing efforts had emphasized
that Alaska seafood was wild caught and a premium product.
He noted that Alaska accounted for approximately 60 percent
of seafood harvested in U.S. The research suggested that
consumers were often selecting Alaska seafood when choosing
wild caught products.
Mr. Woodrow explained that consumer research further
demonstrated the value of Alaska branding. When the Alaska
Seafood logo appeared on packaging, consumers reported they
were 80 percent more likely to purchase the product.
Additionally, 78 percent of consumers reported that they
were willing to pay more for seafood products labeled as
Alaska seafood. He acknowledged that the willingness to pay
higher prices appeared to contradict consumer price
sensitivity. However, research conducted by ASMI showed
that the average price premium consumers were willing to
pay for Alaska-branded seafood products was approximately
15 percent. The price premium generated through Alaska
branding ultimately benefited processors, fishing
communities, fishers, and the state economy.
Mr. Woodrow advanced to slide 16 and described how ASMI
communicated the Alaska seafood story to consumers. He
explained that public relations and earned media campaigns
played a significant role in promoting Alaska seafood. He
relayed that ASMI frequently placed Alaska seafood stories
in major national publications and digital media outlets.
The stories often relied on recognizable public figures and
trusted culinary voices, such as collaborations with
individuals such as Martha Stewart, who helped showcase
Alaska seafood products alongside Alaska fishers.
Mr. Woodrow continued to slide 17 and reported that ASMI's
consumer public relations and social media efforts
generated strong engagement during 2025. Influencer
partnerships produced large numbers of impressions and
social media interactions. However, earned media coverage
remained the largest driver of exposure. He moved to slide
18 and relayed that in 2025 alone, ASMI's earned media
placements generated more than 7 billion impressions. He
explained that earned media involved placing stories about
Alaska seafood in trusted outlets so that consumers
encountered the stories naturally while reading news,
lifestyle publications, or food media. The goal was to
build interest in Alaska seafood before consumers entered
grocery stores.
Mr. Woodrow moved to slide 19 and described the marketing
strategy used once consumers reached retail stores. He
explained that ASMI attempted to influence consumers at
multiple points along the purchasing path using an omni-
channel marketing approach. For example, there was a large
promotion conducted with Costco during 2023 and 2024 that
supported efforts to move large inventories of sockeye
salmon. He reported that Costco sold substantial quantities
of sockeye salmon and was an important retail partner for
Alaska seafood producers.
Mr. Woodrow explained that the promotion reached consumers
through multiple channels before they entered the store.
Consumers encountered Alaska seafood messaging through the
Costco website, the company's printed magazine, email
promotions, and digital screens inside Costco warehouses.
The goal was to ensure that by the time customers reached
the seafood aisle, they already intended to purchase
sockeye salmon and would not hesitate between farmed and
wild products. He stated that the strategy had proven
effective in increasing sockeye salmon sales. However, ASMI
also wanted to expand consumer awareness of other Alaska
seafood species, particularly those with lower market
value.
3:34:25 PM
Mr. Woodrow advanced to slide 20 and explained that one of
the lower market value species was pink salmon. Two years
earlier, many canned pink salmon products in grocery stores
were labeled simply as Pacific pink salmon or wild pink
salmon. However, retailers increasingly began to label the
products specifically as Alaskan pink salmon. He explained
that the shift created an opportunity to increase the value
of pink salmon by emphasizing its Alaskan origins. He noted
that ASMI had developed marketing materials that retail and
food service partners could use to promote Alaskan pink
salmon by highlighting its affordability, versatility,
convenience, and nutritional benefits. The promotional
materials had only recently begun appearing in retail
channels, and ASMI expected the materials to increase the
value of pink salmon products over time.
Mr. Woodrow continued to slide 21 and explained that the
Russian seafood ban also created opportunities for Alaska
seafood products in fast-food markets. He explained that
the religious period of Lent significantly increased
seafood consumption because many consumers substituted
seafood for meat. He noted that major fast-food chains
experienced significant increases in seafood sales during
Lent. For example, McDonald's sold approximately one
quarter of its annual Filet-O-Fish sandwiches during the
forty-day Lent period. He noted that such seasonal demand
created important opportunities to promote Alaska seafood
products. He remarked that McDonald's had been an important
partner for Alaska seafood promotions.
Mr. Woodrow explained that when ASMI partnered with
companies on marketing programs, the organization typically
contributed a limited amount of funding at the outset to
encourage companies to incorporate the Alaska Seafood logo
and specifically identify Alaska seafood products in their
promotions. Once companies recognized the value of the
Alaska Seafood brand, the companies frequently continued
using the Alaska Seafood logo in their promotions without
requiring additional funding from ASMI. He explained that
McDonald's restaurants across the country now displayed
digital signage highlighting Alaska seafood products. He
reiterated that the digital displays allowed customers to
encounter the Alaska Seafood brand repeatedly throughout
the year without ASMI continuing to provide funding for the
promotion. He explained that the approach reflected a
broader strategy in ASMI's partnerships with large
companies.
Mr. Woodrow advanced to slide 22 and explained that
international markets remained critically important for
Alaska seafood because approximately 65 to 70 percent of
Alaska seafood products were exported overseas. The green
dots on the map on the slide represented countries where
ASMI maintained active marketing programs. Red dots
represented countries where Alaska seafood products were
sold, but ASMI did not maintain dedicated marketing
programs. He noted that South Korea appeared as a
significant outlier on the map because it functioned
primarily as a cold storage and trans-shipment hub rather
than a final consumer market. Large volumes of Alaska
seafood were stored temporarily in South Korea and then
shipped onward to other destinations such as Japan or
countries in Europe.
Mr. Woodrow explained that export patterns varied by
species. Higher-volume, lower-value species such as
pollock, keta salmon, and pink salmon were more commonly
exported to international markets. In contrast, lower-
volume, higher-value species such as king salmon, king
crab, and halibut were more often consumed in the U.S.
Certain species, including sablefish and sockeye salmon,
were marketed both domestically and internationally because
the fish were considered high value and there was a
sufficient supply. He stated that ASMI's international
marketing portfolio had expanded in recent years due to
increased federal funding. He reported that ASMI currently
operated marketing programs in more than 55 countries
through 10 international marketing offices. The programs
relied on local contractors who served as in-market experts
responsible for promoting Alaska seafood products in those
regions.
Mr. Woodrow advanced to slide 23 and explained that the
convenience store chain FamilyMart in Japan was an example
of an international promotion. He explained that FamilyMart
was one of the largest convenience store chains in Japan
and operated thousands of stores across the country. In
2023, ASMI partnered with FamilyMart to promote salmon roe
and Alaska pollock roe products used in onigiri, a common
Japanese snack. During the 25-day promotion, Alaska seafood
products were sold in approximately 7,500 FamilyMart
stores. The promotion generated more than 3.5 million
servings of the featured products and included in-store
video advertisements viewed more than 3.8 million times.
The promotion generated approximately $7 million in seafood
sales with an ASMI investment of only $56,000.
3:39:15 PM
Mr. Woodrow continued to slide 24 and explained that the
success of the promotion led to a second collaboration with
FamilyMart the following year. The newer promotion expanded
the product lineup to seven Alaska seafood items carrying
the Alaska Seafood logo. The promotion also coincided with
a Japanese seafood event known as Good Fish Day. The target
audience for the collaboration was evening shoppers with
busy lives who were looking for food after work. He
reported that preliminary results showed the promotion
generated more than 14.2 million advertising impressions
and approximately $18 million in U.S. seafood sales. The
promotion sold roughly 14 million Alaska seafood items
during the campaign period. He remarked that FamilyMart's
leadership had become highly supportive of Alaska seafood
promotions. The company's CEO had expressed interest in
visiting Alaska during the summer to further strengthen the
partnership and learn more about Alaska seafood production.
Co-Chair Schrage informed Mr. Woodrow that the committee
was approaching its scheduled stopping point. He asked Mr.
Woodrow whether he preferred to briefly finish the
presentation or proceed directly to questions.
Mr. Woodrow replied that he would spend approximately
thirty seconds on one final slide and then take questions.
Mr. Woodrow continued to slide 26 and explained that ASMI
conducted an ROI study in the prior year to evaluate the
effectiveness of its marketing programs. The study sought
to measure how much economic value was generated for each
dollar invested by the state or the seafood industry. He
stated that the study found that every dollar invested into
ASMI marketing activities by the state or industry
generated $0.82 for ASMI. The results reflected the strong
partnership between ASMI and Alaska's seafood industry. He
explained that the returns would not have been possible
without cooperation between ASMI and seafood processors,
fishers, and industry partners.
Mr. Woodrow noted that while ASMI reported generating
approximately $464 million in economic return in 2023, the
organization did not claim sole credit for that result. The
return reflected coordinated efforts between ASMI and
industry partners using the Alaska Seafood logo,
emphasizing the Alaska origin of seafood products, and
strategically targeting marketing efforts. He noted that
ASMI's budget in 2023 was approximately $20 million. The
$464 million return demonstrated that the organization's
marketing programs were producing the intended economic
benefits for Alaska's seafood industry and communities.
Representative Bynum commented that it was encouraging to
see Alaska seafood products being marketed globally and
across the U.S. However, he frequently received questions
from constituents in fishing communities such as Ketchikan
and Wrangell regarding the use of UGF dollars to support
ASMI. Constituents understood that ASMI received federal
funds and industry assessment funds but sometimes expressed
frustration when additional state funding was provided. He
relayed that some fishers believed that the marketing
programs primarily benefited large commercial fishing
operations that were sometimes involved in controversial
fisheries. He reported that smaller fishing operations,
including power trollers catching species such as king
salmon, questioned why state funds were used to support
marketing efforts that appeared to benefit large corporate
operators. He asked Mr. Woodrow to provide guidance that he
could share with constituents when responding to concerns.
Mr. Woodrow responded that he understood the concerns and
was aware of the controversies surrounding certain
commercial fisheries in Alaska. However, ASMI's role was to
market Alaska seafood, not to manage fisheries or become
involved in fisheries policy debates. He explained that
ASMI's marketing efforts focused on promoting Alaska as a
brand rather than promoting individual fisheries or
harvesting methods. Consumers typically did not distinguish
between different harvesting techniques or vessel sizes.
Instead, consumers primarily recognized that the seafood
came from Alaska and associated Alaska seafood with high
quality and responsible fisheries management. He emphasized
that one of ASMI's core responsibilities was to ensure that
consumers continued to view Alaska seafood favorably
overall. Maintaining the positive perception benefited all
sectors of the industry.
Mr. Woodrow added that ASMI also highlighted the stories of
Alaska fishers when promoting seafood products. He
explained that Alaska's small boat fisheries were central
to the industry's identity. He reiterated that of the
approximately 19,000 fishers participating in Alaska
fisheries annually, about 11,000 were Alaska residents
operating primarily in smaller fishing operations. The
fishers formed the backbone of the industry, and ASMI
frequently placed them at the center of its marketing
storytelling.
Co-Chair Schrage reviewed the agenda for the following
day's meeting.
ADJOURNMENT
3:45:49 PM
The meeting was adjourned at 3:45 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| ASMI - H FIN Feb 5 2026.pdf |
HFIN 2/5/2026 1:30:00 PM |
|
| ATIA HFIN Presentation 2.5.26.pdf |
HFIN 2/5/2026 1:30:00 PM |