Legislature(2023 - 2024)SENATE FINANCE 532
03/07/2024 09:00 AM Senate FINANCE
Note: the audio
and video
recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.
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.