Fishing boats line the dock outside of the Icicle Seafoods plant in Seward on Aug. 27, 2022. Nearly all segments of Alaska's seafood industry are struggling with low prices, high costs and other problems. State lawmakers are considering several bills aimed at helping the industry. (Photo by Yereth Rosen/Alaska Beacon)
Alaska’s seafood industry, squeezed by depressed fish prices and increased costs, is in a crisis. Also in a crisis is the Alaska state budget, with both investment income and oil revenues in sharp decline.
That presents a dilemma for lawmakers trying to find ways to help the beleaguered seafood industry. What can they do to boost the industry’s fortunes at a time when they are staring down a big budget deficit?
Some bills are pending in the Legislature that aim to aid fishers, the industry and the communities that depend on seafood harvests. Those include bills responding directly to recommendations made by a legislative task force that worked for several months prior to the session’s start.
As to which bills are likely to pass this year and which might have to wait until 2026, one task force member had a succinct answer.
“The ones that don’t cost money,” Sen. Bert Stedman, R-Sitka, who is also a co-chair of the Senate Finance Committee, said in an interview last week. “This year is a very difficult year to have legislation that has expenditures with it.”
Task force bills working their way through the Legislature appear to fit Stedman’s description.
One bill that has already passed the House is aimed at providing fishers better access to insurance.
The House passed the measure, House Bill 116, on April 25. The Senate Labor and Commerce Committee has scheduled the bill for a hearing on May 9.
It would allow commercial fishers to establish their own insurance pools, providing a new option for harvesters coping with sharply rising insurance premiums. Three such pools already exist for Alaska fishing organizations, but they are managed in Washington state.
Rep. Louise Stutes, R-Kodiak, said that bill may have the best chance of passing this session among all the pending seafood bills.
The bill has an especially appealing feature, said Stutes, seafood industry task force member and chair of the House Fisheries Committee: It would impose no new costs on the state. “We’re having trouble paying our bills as it is now,” she said on Wednesday.
A second measure, House Bill 129, and its counterpart, Senate Bill 130, proposes to modify the state’s existing tax credit program aimed at promoting the development of fisheries products. The legislation would expand eligibility for the tax credits.
A problem raised by industry members during the task force meeting was what they considered to be an overly restrictive set of qualifications for the tax credits.
The credit program allows companies to offset state taxes with up to 50% of their total investments in equipment and property used to create value-added seafood products. As of now, the program is limited to equipment used on a single species from a limited set of specific types of fish: salmon, herring, pollock, sablefish and Pacific cod. The changes proposed in the bill would expand that eligibility to all types of seafood, including shellfish. Through that change, it would allow product development investment credits to be applied for purchases of equipment used on multiple fish species.
The bill would add refrigeration and cooling systems to the list of equipment that qualifies for the investment credit. And it would extend the investment credit’s sunset date from Jan. 1, 2027, the current end date of the program, to Jan. 1, 2040.
Though it would not require direct spending from the state, the proposal is not without costs. According to the fiscal note prepared by the Department of Revenue, it would mean a loss in state revenues ranging from about $1 million in the coming year to over $4 million in 2030.
Both the House and Senate versions of the bill were pending in those bodies’ finance committees as of this week.
A bill aimed at helping fishing communities would increase cities’ or boroughs’ share of the fisheries tax revenues that are currently split between the state and local governments. The measure, Senate Bill 135, proposes replacing the current even split with varying percentages, up to 75% for local governments, depending on where fish are landed or processed. It also proposes a sliding scale for revenue sharing with newly created municipalities or boroughs.
The bill, currently pending in the Senate Finance Committee, is crafted with the purpose of helping communities maintain and repair harbors and other facilities needed by the seafood industry. While it would mean a reduction in state revenues in the short term, the bill could wind up generating more revenue for local and state government in the long term by improving infrastructure, supporters say.
“Acknowledging a more fair balance of sharing the fisheries tax revenue with the communities that most directly affect generating the fisheries tax revenue is in the interest of the State. By reinvesting tax revenue into local infrastructure, we can strengthen coastal economies, support the seafood industry, and promote long-term resilience,” the sponsor statement said.
A fourth bill would shore up the Alaska Commercial Fishing and Agriculture Bank, a member-owned cooperative that has lost business to the state-operated Commercial Fishing Revolving Loan Fund.
The bill seeks to “Help keep financing options open and available for Alaska’s businesses, Alaska small family businesses,” said Sen. Jesse Kiehl, D-Juneau, one of the task force members. Kiehl, speaking at Tuesday’s Senate majority caucus news conference, said Senate Bill 156, if passed, will help the Alaska Commercial Fishing and Agriculture Bank survive “and make sure that those who take a risk and go into business, on Alaska waters harvesting our seafood, have access to the capital they need so that more of the permits don’t migrate outside.”
Two other pending seafood bills, both introduced by Gov. Mike Dunleavy and not resulting from the seafood industry task force, face an uncertain future.
One measure, numbered House Bill 135 and Senate Bill 131, would expand the duties of the Alaska Seafood Marketing Institute to include mariculture products like oysters and kelp.
Although that idea was discussed in the task force meetings held in the months preceding the start of the legislative session, it was not among the recommendations in the group’s final report.
Many mariculture industry members oppose the idea, arguing that they prefer to manage their own marketing efforts and that they cannot spare the money to contribute to more generic ASMI campaigns.
Stutes said there seems to be a split in the industry, with kelp harvesters more positive about the idea and shellfish farmers more opposed. But as long as significant opposition exists, the state cannot move forward with the proposed expansion of ASMI’s duties, she said.
“We’ve got to have that come from the stakeholders rather than from us,” she said. “We’ll continue having a conversation, but I don’t see it going anywhere in the near future.”
The other seafood bill introduced by the governor would allow finfish farming in the state, reversing a decades-old ban. The idea has been panned by fishers and by lawmakers representing fishing communities.
The House version, House Bill 111, got a single hearing in Stutes’ committee on April 10. The Senate version, Senate Bill 108, got a single hearing on March 10 in the Senate Resources Committee.
“It’s not going anywhere,” Stutes said. “We gave it a perfunctory hearing just so the administration could hear that Alaskans are not ready for this. “
Aside from the targeted seafood industry bills, lawmakers are seeking to increase ASMI’s funding. The pending budget includes a $10 million boost in funding, to be used over three years. The state agency relies on industry contributions as well as state appropriations to promote Alaska seafood in domestic and international markets.
Stutes said that even though Dunleavy vetoed last year’s lawmaker-approved $10 million injection into ASMI, she believes he will support this year’s funding increase.
“I think that the administration and the governor recognize how important it is,” she said. Dunleavy traveled in March to the Seafood Expo in Boston, she noted. “And I think that he really had an opportunity to recognize how important ASMI is and what they are able to do with the minimum amount of funding.”
Other seafood-producing nations spend much more on marketing than ASMI, she added.
The Legislature’s work on seafood comes at a time when Trump administration policies are anticipated to make the Alaska industry’s plight even worse.
Tariffs were repeatedly brought up as a concern at task force meetings, with virtually all of the comments expressing fears about impact to Alaska’s seafood industry, Stevens said at the news conference.
“It can be pretty horrendous,” he said.
About 70% of Alaska’s seafood is sent to other countries. China, the nation most pointedly targeted by the Trump tariffs, is the top export destination for Alaska seafood.
Stutes said she does not know of any tariff impacts that have hit the industry yet, but she is fully expecting them as fishing seasons get underway. “I cannot imagine that they’re going to get anything but worse, because we send a lot of H&G fish to China to be reprocessed,” she said, referring to the abbreviations for headed and gutted, the first step in processing.
Many companies’ business models are based on sending such fish to China, she said.
The Trump administration’s deep cuts to the National Oceanic and Atmospheric Administration are also a big problem for the Alaska seafood industry, lawmakers said. NOAA’s National Marine Fisheries Service provides the information needed to know when fisheries should open and close, Stevens said. And NOAA’s National Weather Service provides information that fishers need to stay safe.
“Fishermen and processors are very concerned about where things are going,” he said.
