Legislature(2023 - 2024)SENATE FINANCE 532
03/07/2024 09:00 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB189 | |
| HB120 | |
| SCR10 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 189 | TELECONFERENCED | |
| *+ | HB 120 | TELECONFERENCED | |
| *+ | SCR 10 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE CONCURRENT RESOLUTION NO. 10
Establishing the Joint Legislative Seafood Industry
Task Force.
10:10:11 AM
Co-Chair Olson relayed that it was the first hearing for
SCR 10.
10:10:33 AM
TIM LAMKIN, STAFF FOR SENATOR GARY STEVENS, relayed that
the bill was a priority among coastal communities. He
commented that the resolution modeled a similar task force
in 2002 as the legislature attempted to find solutions to
offer at a state level. The resolution was a draft, and he
noted that there could be some additional target subject
areas that might want to be added for the task forces
consideration. He discussed the size of the task forces
membership, and noted that the 2002 task force membership
of 15 had to extend its work to two years to complete its
work. He mentioned the prior task forces governance
structure and stakeholders, which included several policy
subcommittees.
Mr. Lamkin spoke to the fiscal impact of the bill, and
shared that the activities of the task force should fall
within the members normal course of duty. He expected an
initial in-person organizational meeting, likely in
Anchorage, presumably in May. He anticipated that the task
force would meet digitally throughout the legislative
interim, with a second potential meeting in Anchorage in
January. He mentioned the final report and presumed that
the cost borne by the task force would be absorbed by
existing operational budgets of the legislature and by the
public members representing their respective organizations.
Co-Chair Stedman referenced Mr. Lamkin's mention of the
previous salmon task force twenty years previously. He
recalled that the previous task force had 16 members and
asked if the resolution proposed to have 7 members.
Mr. Lamkin answered affirmatively, and relayed that the
number was a starting point.
Co-Chair Stedman asked if it was felt that the 16-member
task force was too broad, slow, or cumbersome; and that 7
members would work more quickly. He asked for the reasoning
behind the reduction of membership.
Mr. Lamkin did not recall the conversation regarding the
reasoning for the change. He opined that a task force with
over 15 members was too many. He thought logistics was a
factor. He mentioned the amount of work and the difficulty
of achieving consensus with larger groups. He pondered
whether seven was too few, and suggested having a maximum
of 15 members.
10:14:59 AM
JOHN HANRAHAN, CEO, OBI SEAFOODS, SEATTLE, WA (via
teleconference), spoke in support of SCR 10. He relayed
that OBI Seafoods had operations in Southeast, Prince
William Sound, Kodiak, and Bristol Bay. The company was one
of the largest salmon processors in the state and employed
over 1,500 people each year. He thought the Alaska seafood
industry was experiencing adverse conditions that
negatively affected nearly every fishery. He mentioned high
interest rates, inflation, and Russian pricing. He
discussed efforts by the congressional delegation and
legislature.
Mr. Hanrahan discussed things the state could do to assist
with the problem. He suggested that more support for Alaska
Seafood Marketing Institute (ASMI) to increase market
shares. He discussed including Alaska fish purchases in
food banks. He mentioned loan guarantees to reduce the
effects of high interest rates. He thought the creation of
task force would be helpful in coming up with additional
measures to help the fishing community and adjacent
stakeholders. He emphasized working on the makeup of the
task force to ensure the creation of the best possible plan
for all stakeholders.
10:17:48 AM
TRACY WELCH, EXECUTIVE DIRECTOR, UNITED FISHERMEN OF
ALASKA, spoke in support of the bill. She explained that
the United Fisherman of Alaska (UFA) was a statewide
commercial fishing trade association that represented 36
member groups that participated in state and federal
fisheries off Alaskas coast. She relayed that she was a
harvester and she had participated in Southeast Alaska
fisheries for over 30 years. She emphasized that UFA had
unanimously supported the resolution to form the task
force. She stressed that the states seafood industry was
facing unprecedented challenges in every area of the state.
She discussed affected parties that were faced with low
prices, closed plants, lost markets, and foregone fishing
opportunities.
Ms. Welch discussed the impact on state and local tax
revenue, jobs, and businesses. The estimated loss to the
economy in 2020 was estimated to be over $2 billion. She
thought the Alaska seafood industry was in crisis. She
thought the proposed task force was an important mechanism
to provide recommendations on legislative and
administrative actions to improve the economics of Alaskas
seafood industry. She thought that immediate action was
needed but that the task force would develop long-term
strategy for the industry. She expressed appreciation that
there was a task force seat for a harvester included in the
proposal.
10:20:25 AM
JEREMY WOODROW, EXECUTIVE DIRECTOR, ALASKA SEAFOOD
MARKETING INSTITUTE, spoke in support of the bill. He read
from a prepared statement:
The Alaska Seafood industry is currently weathering
its worse economic storm in decades. And while the
seafood industry is used to unusual market dynamics
and ebbs and flows in dock prices, the current
situation we find ourselves in is unprecedented. It's
not "just salmon", "pollock" or "sablefish" that are
experiencing these market pressures. It is, in fact,
every Alaska species that is currently facing a large
supply and demand imbalance. For example, while Alaska
experienced a large 2023 pink salmon harvest of almost
200,000 metric tons, it's important to note that
Russia harvested over three times what we brought in.
The sheer size of the Russian harvest and the
significantly lower value of the Russian ruble has
allowed Russia to sell pink salmon and salmon roe to
our shared global customers at historically low
prices, thus driving down the market value for all
salmon species. And while Russia is finally blocked
from the US market, we still must compete against them
in the global market, where, by value, 70 percent of
Alaska seafood and 80 percent by weight goes.
However, the list of economic challenges the Alaska
seafood industry is facing goes on. There are a
multitude of other geo-political obstacles affecting
trade. Global inflation has left consumers carrying a
massive amount of debt. In the U.S. alone the average
cost of groceries has increased 30 percent in the last
year and, in turn, has forced consumers to leave
seafood out of the shopping cart and replace it with
less expensive proteins such as chicken and ground
beef.
On top of all that, interest rates have climbed and
remain high making it financially impractical for
fisherman and processors alike to restructure debt,
carry inventory and invest in new capital projects or
even just maintain the assets they have.
All that said, the Alaska seafood industry is
resilient, but it does find itself at new crossroads.
Over the last several months, I have heard numerous
ideas and possible solutions to both help solve our
current crisis and strengthen the industry for the
long-term. However, I believe we all agree that even
the best ideas need to be vetted.
There is no silver bullet to solve the challenges we
face, and this situation certainly will not turn
around overnight. This is why ASMI supports SCR10 as
the vehicle to further investigate and collaborate
amongst key stakeholders and chart new opportunities
for the long-term economic health of Alaska's Seafood
Industry. Thank you to the members of the committee
for seeking a practical solution toward finding a way
out of this crisis. ASMI looks forward to continuing
to partner with you every step along the way.
Co-Chair Stedman referenced page 2, line 20, item 3 of the
bill, relating to improvements of the coordination of
harvesting, processing, and marketing seafood. He thought
it would be beneficial not to wait until the conclusion of
the task force, but rather for ASMI to come forward to the
Senate Finance Subcommittee for the Department of Fish and
Game and discuss marketing or commerce plans. He queried
how ASMIs relationship going with Alaska Travel Industry
Association (ATIA) and marketing/revenue through collection
from the industry. He wanted the subcommittee to bring the
information to the full committee, at which time ASMI could
come before the committee for discussion.
Mr. Woodrow relayed that ASMI was happy to present on its
activities at any time and speak to what it was doing to
help the industry.
Co-Chair Stedman relayed that his comment was less of a
question and more of a directive from the chair of the
operating budget.
Co-Chair Olson asked Mr. Woodrow to respond.
Mr. Woodrow affirmed that ASMI was happy to provide the
resources that the committee needed.
10:25:05 AM
GLENN HAIGHT, COMMISSIONER, COMMERCIAL FISHERIES ENTRY
COMMISSION, spoke in favor of the resolution. He affirmed
that the commission was ready to help in any way. He
recounted that the current situation was reminiscent of
what happened with salmon more than twenty years
previously. He mentioned farmed salmon and processing
closures. He recounted working at the time as a fisheries
specialist with Congress. He mentioned a large-scale effort
including from the legislature and salmon industry task
force, that passed laws that were still in effect. He was
encouraged that the legislature was looking at seafood,
which was an important part of the state's economy.
Mr. Haight relayed that the Commercial Fisheries Entry
Commission (CFEC) was involved in the harvesting side of
the issue. He considered maximizing the value of the
industry for the harvesters. He considered socioeconomic
factors such as the aging of the fleet, getting young
people into the industry, and the loss of fishing
communities. He thought there were multi-faceted issues
that required a lot of people to be involved, and he though
the task force was the kind of forum that would work.
10:27:42 AM
JULIE DECKER, PRESIDENT, PACIFIC SEAFOOD PROCESSORS
ASSOCIATION (via teleconference), spoke in support of the
bill. She relayed that she lived in Wrangell and had worked
in the industry for 30 years starting in 1994 when she came
to Alaska to work in a cannery. She relayed that the
Pacific Seafood Processors Association (PSPA) was a trade
association that represented 11 major seafood processing
companies operating over 30 facilities in the state. The
member companies bought 100s of millions of pounds of fish
from thousands of independent commercial fishermen for
processing before moving it to market.
Ms. Decker discussed the economic conditions that brought
about the situation. She emphasized that the conditions
came together and depressed the market much faster and much
more dramatically than anyone had predicted beginning in
2022, and in 2024 the downturn was still happing. She
thought that while some problematic market conditions would
improve over time, the seafood industry also had systemic
challenges related to competitiveness and fairness,
especially on a global scale. She noted that PSPA had been
advocating for a number of state and federal actions that
would help the seafood industry during the downturn,
although the challenges were larger than any one sector of
the industry and region of the state.
Ms. Decker thought the issue impacted more than just the
industry, and directly impacted coastal communities and
state revenues. She thought the task force would help bring
together people from across the state from various sectors
and policy-making groups, with a focus on the economic
challenges in the seafood industry. She thought the task
force would help better understand the problems, while
allowing a broad variety of solutions to come forward and
providing a roadmap to a resilient Alaskan seafood
industry. She noted that PSPA was in conversation with
other stakeholders about optimum representation on the task
force.
10:29:53 AM
SCOTT ARNDT, MAYOR, KODIAK ISLAND BOROUGH (via
teleconference), spoke in support of the resolution. He
spoke to the importance of commercial fishing in the Kodiak
and Western Alaska. He cited that fishing provided a
significant portion of revenue to all the communities on
Kodiak Island, both directly and indirectly. He mentioned
the possible closure of Trident's plant in Kodiak, and
noted that Kodiak Electric Association was raising rates
for the first time in 30 years. The 12.5 percent increase
was partly due to a major reduction in sales to processors
since 2023. He commented that there was stress on all
fisheries species and all markets.
Mr. Arndt asked for consideration of expanding the
membership of the task force to include two additional
members that would represent communities directly affected
by the seafood industry.
SCR 10 was heard and HELD in Committee for further
consideration.