Legislature(2017 - 2018)GRUENBERG 120
03/28/2017 10:00 AM House FISHERIES
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| Audio | Topic |
|---|---|
| Start | |
| Confirmation Hearings(s):|| Fishermen's Fund & Appeals Council | |
| Alaska Board of Fisheries (bof) | |
| HCR8 | |
| HB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HCR 8 | TELECONFERENCED | |
| += | HB 76 | TELECONFERENCED | |
| += | HB 128 | TELECONFERENCED | |
| *+ | HJR 9 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 76-MARICULTURE REVOLVING LOAN FUND
11:34:06 AM
CHAIR STUTES announced that the next order of business would be
HOUSE BILL NO. 76, "An Act relating to the mariculture revolving
loan fund and loans from the fund; and providing for an
effective date."
11:34:37 AM
REPRESENTATIVE FANSLER moved to adopt the proposed committee
substitute (CS) for HB 76, Version 30-ls0343\T, Bullard,
3/14/17, as the working document.
11:34:51 AM
CHAIR STUTES objected for discussion.
11:35:06 AM
ELIZABETH BOLLING, Staff, Representative Dan Ortiz, Alaska State
Legislature, said there are five changes proposed in Version T.
Referring to the committee packet document labeled, "Explanation
of Changes from HB0076 to HB0076 CS," she paraphrased the
changes, which read as follows [original punctuation provided
with slight modification]:
Section 3
AS 16.10.900(d) divides the fund into two critical
purposes, and ensures the revolving nature of one side
does not depend or detract from the other over time.
Section 4
AS 16.10.905 limits grants as one-time grants to non-
profit organizations.
Section 5
AS 16.10.905(b) caps the total amount available for
grants at [$500,000].
Section 8
AS 16.10915(4) allows the department to secure loans
by a first priority lien on collateral.
Section 13
AS 16.10.920 will ensure individual farmers accrue
interest.
11:36:27 AM
CHAIR STUTES removed her objection. Without further objection,
Version T was before the committee.
11:36:45 AM
REPRESENTATIVE NEUMAN noted that the proposed change in Section
3, allows the entire fund balance to be available for loans
versus a percentage of the balance.
MS. BOLLING responded that the change adds a new subsection,
(d), and said, "The fund was not previously split 60/40, this
bill splits it 60/40."
REPRESENTATIVE NEUMAN stated his understanding that the fund has
been described as allowing 40 percent, of the $500,000 balance,
to be loaned.
11:38:39 AM
BRITTENY CIONI-HAYWOOD, Director, Division of Economic
Development, Department of Commerce, Community & Economic
Development (DCCED), explained that the fund, up to this point,
has been fully available for use by individual mariculture
farmers. The bill seeks to make 40 percent of the fund
available for hatchery and salmon enhancement projects. The
remaining 60 percent will remain available to individual
farmers.
REPRESENTATIVE NEUMAN referred to the previously adopted Version
R, Section 10, and paraphrased the language, which read:
(e) The total balances outstanding on loans made to
borrowers under AS 16.10.910(a)(2) may not exceed 40
percent of the principal of the mariculture revolving
loan fund.
REPRESENTATIVE NEUMAN noted that in the previous bill hearing
the loan totals and balances available were discussed. He said,
"If I remember right, there was $5 million out, there was a loan
out for $500,000, left $450; 60 percent of it would be $2
million available, [leaving] one half million dollars
available."
MS. CIONI-HAYWOOD offered that the percentage split in the
previous version was for making loans to hatcheries; however,
concerns were expressed and the percentages were changed to
accommodate individual farmers. She clarified that the grants,
"which is the 'up to $500,000' piece" will be coming out of the
$400,000 and the remaining of the 40 percent can then be used
for loans to hatcheries. The remaining 60 percent is then set
aside for use by individual farmers.
REPRESENTATIVE NEUMAN asked whether loan defaults would affect
the fund.
MS. CIONI-HAYWOOD answered that a small amount is held in a
foreclosure reserve, currently $50,000. As additional loans are
made, she said the amount could be increased appropriately.
However, 60 percent of the fund would remain available for
loans.
REPRESENTATIVE NEUMAN questioned whether there is a standard
practice to loan out the entire corpus of the revolving fund.
MS. CIONI-HAYWOOD said that such a situation has not been
encountered, in her experience.
11:43:00 AM
REPRESENTATIVE FANSLER referred to Version D, Sec. 7, pages 3,
line 31, continuing to page 4, lines 1 and 2, which read:
(e) The total of balances outstanding on loans made to
borrowers under AS 16.10.910(a)(2) may not exceed 40
percent of the principal of the mariculture revolving
loan fund.
REPRESENTATIVE FANSLER asked whether this subparagraph can be
tracked in Version T.
MS. CIONI-HAYWOOD said that as the loan fund is currently only
available to mariculture farmers, the bill seeks to support
hatcheries, as well. The language of the 40/60 split has
vacillated between bill versions. However, Version T stipulates
that 60 percent of the fund will be available to farmers, and 40
percent to hatcheries.
REPRESENTATIVE FANSLER suggested the loan figures might be
better established in "bright line" numbers versus a percentage
split, and asked if there is a prevailing reason for the
approach being proposed.
MS. BOLLING responded that legal consultation suggested it would
be more reliable, and offer protection to individual farmers, to
"simply split the fund, in time, from one date." She said
that's what is proposed in the CS.
11:46:36 AM
REPRESENTATIVE EASTMAN asked what is the longest deferral time
allowed prior to repayment beginning.
MS. CIONI-HAYWOOD answered that individual farmers are currently
allowed a six year deferment, which remains the same in the
proposed CS.
11:47:20 AM
REPRESENTATIVE CHENAULT pointed out that loan recipients are
intended to be Alaskans. He asked whether all of the fishermen
that receive a loan from the program will be required to be
Alaskan [residents].
MS. CIONI-HAYWOOD answered yes.
11:48:02 AM
REPRESENTATIVE NEUMAN asked the director to clarify her
statement. He said, "I believe I heard you say that it's not
standard procedure to take 100 percent of these revolving loans
and have them available for loans."
MS. CIONI-HAYWOOD explained that the fiduciary duty of the
division is to maintain the revolving fund; however, if the
entire available amount were loaned, the fund would be shut down
until payments were received for recapitalization and provide a
loanable cash balance.
REPRESENTATIVE NEUMAN expressed concern for the fund becoming
bankrupt. He asked, "Standard policy for revolving loans; is it
standard policy to take 100 percent of the amount of the loan
and allow that all out for the other revolving loans that the
state handles."
11:50:18 AM
REPRESENTATIVE DAN ORTIZ, Alaska State Legislature, offered that
the intent of the bill is to jump-start a mariculture resource
that is projected to evolve into a $1 billion industry.
REPRESENTATIVE NEUMAN asked if 100 percent of the corpus of the
fund could be loaned out.
MS. CIONI-HAYWOOD restated how the corpus could be loaned
against.
The committee took an at-ease from 11:53 a.m. to 11:54 a.m.
11:54:26 AM
REPRESENTATIVE EASTMAN referred to Version T, page 5, lines 26-
28, and read:
The department may defer principal of and interest on
a loan made under AS 16.10.910(a)(2) for a period of
up to 11 years after the loan is made.
REPRESENTATIVE EASTMAN noted that the addition of this proposed
language will allow non-payment of a loan for 11 years.
MS. CIONI-HAYWOOD replied that the hatcheries are extended this
deferral period; however, the farmers are not.
11:55:19 AM
REPRESENTATIVE NEUMAN stated his understanding that the loan
fund has $5 million available and hatcheries are allowed to
borrow up to $1 million.
MS. CIONI-HAYWOOD affirmed the member's understanding.
REPRESENTATIVE NEUMAN asked how many applicants might be
anticipated.
REPRESENTATIVE ORTIZ said the industry is in the fledgling
state, making it difficult to determine how many applicants will
come forward should the bill become law. He offered that, from
anecdotal conversations, two groups are currently in a position
to make application.
REPRESENTATIVE NEUMAN expressed concern for the ability of the
fund to be maintained if 60 percent is on loan.
11:57:52 AM
REPRESENTATIVE EASTMAN referred to Version T, page 4, lines 12-
13, and paraphrased the language, which reads:
(B) $1,000,000 a year for an applicant under AS
16.10.910(a)(2);
REPRESENTATIVE EASTMAN asked for an explanation of the
significance regarding the $1 million per year stipulation.
MS. CIONI-HAYWOOD said the "per year" language was brought
forward from the previous bill version, and offered to provide
further information on the significance.
11:59:22 AM
REPRESENTATIVE NEUMAN stated concern for the number of loans
that could be made available, and asked what the long-range plan
is for continuing the funding corpus.
REPRESENTATIVE ORTIZ replied that the intent is to optimize an
underutilized, available fund, and jumpstart the budding
mariculture industry. He expressed appreciation for the
member's concerns regarding the solvency of the fund; however,
it has an excellent record of good, solid management practices,
and has grown over the years. The concerns are unmerited when
considering this solidly managed fund, he opined.
REPRESENTATIVE NEUMAN maintained his concern regarding solvency,
stating, "I've seen a lot of these revolving loan funds fail
because ... they've been overextended."
REPRESENTATIVE ORTIZ responded, "Not in this department you
haven't."
REPRESENTATIVE NEUMAN referred to Version T, page 3, lines 8-10,
which read:
(9) make one-time grants for organizational and
planning purposes to nonprofit organizations eligible
for loans under AS 16.10.190(a)(2) in amounts not
exceeding $100,000.
REPRESENTATIVE NEUMAN noted that the authority falls under the
purview of the DEC commissioner, and asked what the purpose and
parameters are for approving this type of loan.
MS. CIONI-HAYWOOD explained that the language reflects similar
allowances, similar to what reside in the fisheries enhancement
revolving loan fund, where grants were extended to regional
hatcheries for planning purposes.
12:04:03 PM
REPRESENTATIVE EASTMAN stated his understanding that the term
grant signifies money that will not be paid back and asked how
grants might impact the 60-40 percentage split.
MS. CIONI-HAYWOOD responded that the grant amount was capped at
$250,000 and is a draw from the 40 percent hatchery share.
12:04:55 PM
REPRESENTATIVE FANSLER commented that, should the fund become
overextended, the legislature could choose to appropriate
additional funding, if mariculture proves to be successful.
MS. CIONI-HAYWOOD agreed, and said the fisheries enhancement,
revolving loan fund, was capitalized on numerous occasions.
12:05:38 PM
REPRESENTATIVE NEUMAN said he had further questions for the
director, and sought permission to proceed.
CHAIR STUTES approved the member's request, based on the
questions being "new."
12:06:34 PM
REPRESENTATIVE NEUMAN inquired about the balance of the
fisheries enhancement revolving loan fund, noting that funds
with grant authority generally have a larger corpus.
MS. CIONI-HAYWOOD responded that the fisheries enhancement
revolving fund has about $100 million, as a balance.
REPRESENTATIVE NEUMAN said that is a substantial amount compared
to the $5 million proposed for the mariculture revolving loan
fund balance.
12:08:19 PM
REPRESENTATIVE EASTMAN commented that using a general fund
appropriation to address a shortfall in the fund balance could
present a budgetary problem.
12:08:45 PM
REPRESENTATIVE FANSLER moved to report the proposed CS for HB
76, Version 30-LS0343\T, Bullard, 3/14/17, from committee with
individual recommendations and the accompanying fiscal notes.
REPRESENTATIVE EASTMAN objected.
12:10:05 PM
A roll call vote was taken. Representatives Fansler, Neuman,
Kreiss-Tomkins, Tarr, and Stutes voted in favor of the motion to
move HB 76 from committee. Representatives Eastman and Chenault
voted against it. Therefore, CSHB 76(FSH) was reported out of
the House Special Committee on Fisheries by a vote of 5-2.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Resume - Clay Bezenek.pdf |
HFSH 3/28/2017 10:00:00 AM |
Fishermens Fund Appointment |
| Resume - John Jensen.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| Resume - Frederick (Fritz) Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| Resume - Reed Morisky.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| ASA Support - Jensen Morisky Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| Icicle Support - Jensen Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| Bristol Bay Borough Support - Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| KRSA Support - Jensen Morisky Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| CDFU Support - Jensen.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| SAFA Support - Bezenek.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries Appointment |
| KPFA Support - Jensen Morisky Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries |
| Unalaska Mayor Support - Jensen Morisky Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries |
| HCR008A Sponsor Statement 3.10.17.PDF |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008 ver A 3.1.17.pdf |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008 Fiscal Note LEG-SESS 3.13.17.pdf |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008 Fiscal Note LEG-SESS-03-10-17.pdf |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008A Supporting Document- Leg Research FITC 12.2.16.pdf |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008A Supporting Document - KSMSC Budget.PDF |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008A Supporting Document - APICDA 12.10.15.pdf |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HCR008A Supporting Document - AML 11.5.15.pdf |
HFSH 3/28/2017 10:00:00 AM |
HCR 8 |
| HB128 Supporting Document-Ketchikan Gateway Borough.pdf |
HFSH 3/28/2017 10:00:00 AM |
HB 128 |
| HB128 Supporting Document - Adkinson Comments.pdf |
HFSH 3/28/2017 10:00:00 AM |
HB 128 |
| HB128 Supporting Document-Ketchikan Gateway Borough.pdf |
HFSH 3/28/2017 10:00:00 AM |
HB 128 |
| HB128 Supporting Document - Adkinson Comments.pdf |
HFSH 3/28/2017 10:00:00 AM |
HB 128 |
| ATA Support - Jensen.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries |
| KPFA Support - Jensen Morisky Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries |
| Unalaska Mayor Support - Jensen Morisky Johnson.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries |
| USAG Support - Jensen.pdf |
HFSH 3/28/2017 10:00:00 AM |
Board of Fisheries |
| UFA support Jensen and Johnson for BOF 032817.pdf |
HFSH 3/28/2017 10:00:00 AM |
|
| Bristol Bay Native Assoc Comments BOF.pdf |
HFSH 3/28/2017 10:00:00 AM |