Alaska Legislature makes progress on aid package for ailing seafood industry

Yahoo

29-05-2025

Commercial fishing boats are lined up at the dock at Seward's harbor on June 22, 2024. (Photo by Yereth Rosen/Alaska Beacon)
To help pull the struggling Alaska seafood industry out of its tailspin, state lawmakers passed some bills aimed at lightening the financial load on harvesters and advanced others that are intended to help businesses and fishery-dependent municipalities.
The bills stemmed from recommendations made by the Joint Legislative Task Force Evaluating Alaska's Seafood Industry, which was created by lawmakers last year and which completed its work with a report at the start of this year's session.
Lawmakers passed two task force-related bills, giving unanimous or near-unanimous support. One of them, House Bill 116, allows Alaska fishing organizations to establish their own insurance cooperatives. The other bill, Senate Bill 156, shores up the Alaska Commercial Fishing and Agriculture Bank with a long-term loan from the state to keep the cooperative organization in business.
The bills pose little to no costs to the state, according to legislative analysis. And they are only incremental steps toward addressing the big problems facing a major Alaska industry.
Multiple and often interrelated forces have dragged down nearly all sectors of the seafood industry: low fish prices resulting from glutted world markets, high operating costs, financial turmoil among processing companies, labor shortages and numerous stock collapses or poor returns tied to a variety of environmental conditions, including climate change.
While Alaska produces about 60% of the nation's seafood, that volume is overwhelmed by international supplies and global economic forces, limiting lawmakers' options to respond effectively, said Sen. Jesse Kiehl, D-Juneau.
'Our role is not as big as we imagine. That means the Legislature has only so many tools,' said Kiehl, who served on the task force. 'But you see us, I think, turning the knobs.'
Beyond the bills passed this year, other bills resulting from the task force recommendations have advanced far enough to be approaching full floor votes; the Legislature works in two-year cycles, and bills introduced this year carry over to next year.
Those remaining seafood task force bills carry price tags for the state, however. They will get some extra scrutiny next year, given the state's dire fiscal condition created by reduced investment earnings and lower oil revenues, task force members said.
'We are in new and unusual times where, you know, we have to look at every issue and try to decide if it's worth the additional cost,' said Senate President Gary Stevens, R-Kodiak, who served as the task force's chair.
One bill, Senate Bill 135, would increase local governments' share of seafood taxes that are currently split with the state government. Currently, fishery business and seafood tax revenues are split evenly between the state and local governments; the bill would allow the local governments up to 75% of those revenues.
Some fishing communities endured steep losses from the industry's woes. The island community of St. Paul, for example, saw a drop of nearly 90% of its tax revenue in 2024 after key crab harvests were canceled, according to legislative information.
To Stevens, the sacrifice of state revenue through a smaller cut of fish taxes seems justified. Local governments' troubles are likely to continue, he said. 'I think that it'll be even more apparent that we need to give those fellows a break,' he said.
Another important bill that resulted from the task force's report would broaden the state tax credit granted to companies that invest in equipment to create new seafood products, adding value to the fish they process. The two versions of the measure, Senate Bill 130 and House Bill 129, both had been sent to their respective bodies' finance committees prior to last week's adjournment of the session.
The annual cost to the state would range from $930,000 to $4.2 million a year, depending on different scenarios, according to the state Department of Revenue's analysis of the Senate version.
That might be seen as considerable, Stevens conceded. 'But I think it's a fair cost,' he said.
It could improve the fortunes of the processing sector and potentially result in more revenues ultimately to the state, he said.
Kiehl has high hopes for the bill. It will encourage the development of high-end products, key to the industry's recovery, he said.
'As much as our seafood as we can put into a premium space, that will help,' he said.
Differentiating Alaska salmon, for example, as a premium product is critical when competition comes from huge amounts of cheap Russian salmon harvested by fish traps rather than by small family businesses, he said.
At the same time, there are opportunities for Alaska fish oil and fish meal to be molded into new products like nutritional supplements, Kiehl said. Those opportunities could be explored by companies investing in equipment to add value to the raw fish they process, he said.
The budget that lawmakers passed also reflects task force recommendations for boosted state marketing efforts. The budget includes a $10 million allocation for the Alaska Seafood Marketing Institute, the state agency that promotes Alaska fish products domestically and internationally.
Gov. Mike Dunleavy vetoed a similar amount from last year's budget but has expressed support for the ASMI funding this year.
An estimated 70 percent of Alaska's fish is sold outside of the United States, according to ASMI. To Kiehl, that shows the importance of the organization's international marketing.
'I don't see a point in the next several decades when Americans buy all of our fish,' he said. 'Americans aren't eating salmon roe or herring roe. Americans don't eat sea cucumbers.'
Not in the budget, however, is any significant increase for Alaska Department of Fish and Game fishery research, Stevens said.
That may be possible in the future if the state manages to bring in more revenue through tools like changes in oil taxes, he said.
More ominously, the Trump administration has slashed positions and fisheries research at the National Oceanic and Atmospheric Administration, with potentially dramatic impacts to Alaska.
'That's really shocking,' Stevens said. 'I am really concerned when the federal government talks about cutting science and research and all the things that they do right now to protect our fisheries.'
The state cannot replicate that work by NOAA and its National Marine Fisheries Service, he said.
'The assumption that some people make, 'Oh, the feds can't do it, the state will,' However, we don't have the money to do all these things,' he said.
Beyond fisheries, Stevens worries about deep cuts to federal social programs like Medicaid. 'It's going to be an enormous problem, maybe $1 billion, that the feds walk away from. We can't fill that gap.'
Other fishery-related bills in addition to those recommended by the task force are also pending.
One of them, House Bill 125, would reconfigure the state Board of Fisheries by designating two seats each to the commercial, sport and subsistence sectors, with the seventh seat to represent the science community. Sponsored by Rep. Nellie Jimmie, D-Toksook Bay, the passed the House on May 17 by a relatively close 22-17 vote. It now moves to the Senate.
A bill introduced by Dunleavy would expand ASMI's authority, allowing it to market mariculture products. The idea has received a mixed response from the mariculture industry; some kelp harvesters are receptive, but many key shellfish growers oppose it. The Senate version of the measure, Senate Bill 131, had reached that body's finance committee by early May. The bodies' finance committees are usually the last stops for bills before they put up for floor votes. The House version, House Bill 135, had not seen action since March.