Prospective tax credit bill has some Alaska seafood processors thinking of expansion

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Senate Bill 33 extends tax credits through the year 2026 for salmon and herring processors in Alaska that invest in new equipment. The bill was sent to the governor on May 2, and if it’s signed into law, shoreside facilities that process Pacific cod and pollock would also be eligible for the program. 

The current tax credit program for salmon and herring processors cost the state $2.3 million to $4.4 million between 2017 and 2020, and Senate Bill 33’s fiscal note predicts that adding Pacific cod and pollock processors would cost the state $2.9 million to $5.1 million per year. 

Chris Barrows is the president of the Pacific Seafood Processors Association. He said expanding the umbrella of eligibility could give the state’s seafood industry an economic boost.

“The volume of fisheries is not likely to change over time,” said Barrows. “So, what we can do in terms of the economics is all about trying to increase the value, and expanding that to cod and pollock is a good way to bring those higher value products for a return on investment.”

Processors in Kodiak are already planning ahead. Mark Palmer is the chief executive for OBI Seafoods, which has 10 facilities in Alaska – including on Kodiak Island. He said via email that the company intends to invest in its Kodiak facility, where the majority of its groundfish – like Pacific cod and pollock– is processed. 

OBI may use the tax credit for equipment to start producing surimi – a paste made from whitefish that mimics other seafood products – according to Palmer. And he says it’s good timing, as many countries are looking for alternatives to whitefish products exported from Russia.

Barrows says he can’t speak for other companies’ plans, but there’s collective excitement that Alaska seafood will ultimately end up on more far-flung shelves in some shape or form. 

“Alaskans and our policy makers really understand that Alaska seafood – whether it’s salmon or whether it’s cod or pollock or any of our other seafood, really compete in a global market,” he said. 

The bill didn’t draw any written opposition during its journey through the state legislature. Kodiak Republican state Sen. Gary Stevens sponsored the bill, and Kodiak Republican House Speaker Louise Stutes introduced companion legislation. It’s currently awaiting a signature from Governor Dunleavy.