Legislature(2023 - 2024)SENATE FINANCE 532

03/07/2024 09:00 AM Senate FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 189 EXTEND ALASKA COMMISSION ON AGING TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
*+ HB 120 HUNT/FISH LICENSE FOR NONRESIDENT STUDENT TELECONFERENCED
Heard & Held
-- Invited & Public Testimony --
*+ SCR 10 JOINT LEGIS SEAFOOD INDUSTRY TASK FORCE TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled 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.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
SB 189 AARP Letter of Support.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Board Member Bob Pawlowski Letter of Support.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Board Chair Letter of Support.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Denakkanaaga Letter of Support.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Fairbanks Senior Center Letter of Support.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Sectional Analysis.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Sponsor Statement.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Supporting Document - ACoA Roster.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Supporting Document - ACoA 2023 Senior Snapshot.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Supporting Document - ACoA Legislative Priorities.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Supporting Document - Sunset Review of ACoA Conclusions.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SB 189 Vice Chair Letter of Support.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
HB120 Sectional Analysis.pdf HRES 4/5/2023 1:00:00 PM
HRES 4/12/2023 1:00:00 PM
SFIN 3/7/2024 9:00:00 AM
HB 120
HB120 Sponsor Statement.pdf HRES 4/5/2023 1:00:00 PM
HRES 4/12/2023 1:00:00 PM
SFIN 3/7/2024 9:00:00 AM
HB 120
HB 120 Support Letter from UA Chad Hutchison State Director 2 17 2024.pdf SFIN 3/7/2024 9:00:00 AM
HB 120
SCR 10 sponsor statement.pdf SFIN 3/7/2024 9:00:00 AM
SCR 10
SB 189 Trust LOS SB189 - ACOA Extension 3.6.24.pdf SFIN 3/7/2024 9:00:00 AM
SB 189
SCR 10 LEG COU 030624.pdf SFIN 3/7/2024 9:00:00 AM
SCR 10
HB 120 DGF DAS 030124.pdf SFIN 3/7/2024 9:00:00 AM
HB 120
HB 120 DFG DSF 030124.pdf SFIN 3/7/2024 9:00:00 AM
HB 120
HB 120 DFG DWC 030124.pdf SFIN 3/7/2024 9:00:00 AM
HB 120
SJR 10 Seafood Task Force Testimony Kelty.pdf SFIN 3/7/2024 9:00:00 AM
SJR 10
SB 189 Letter of Support.SB 189.3.7.24.pdf SFIN 3/7/2024 9:00:00 AM
SB 189