04/17/2014 09:00 AM Senate FINANCE

CS FOR HOUSE BILL NO. 121(FIN)                                                                                                
                                                                                                                                
     "An  Act relating  to the  examinations, board,  loans,                                                                    
     and  records  of  the  Alaska  Commercial  Fishing  and                                                                    
     Agriculture  Bank;  and   providing  for  an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
10:24:11 AM                                                                                                                   
                                                                                                                                
MICHAEL   PASCHALL,   STAFF,  REPRESENTATIVE   ERIC   FEIGE,                                                                    
introduced  himself,  and  stated  that he  was  willing  to                                                                    
respond to questions.                                                                                                           
                                                                                                                                
Co-Chair  Meyer queried  the relationship  of the  bank with                                                                    
the  state. Mr.  Paschall responded  that the  establishment                                                                    
was formed to help the  fishing and agriculture industry. It                                                                    
was given a privileged tool  to use limited entry permits as                                                                    
collateral.  Therefore, there  was a  specific statute  that                                                                    
granted the  authority, even though  they were created  as a                                                                    
private bank. The only relationship  they had with the state                                                                    
was  as an  agent  of  the state  with  the  ability to  use                                                                    
limited entry permits as  collateral. The governor appointed                                                                    
two board  members from  within the members  of the  bank to                                                                    
assure the interest was followed.                                                                                               
                                                                                                                                
Co-Chair Meyer wondered if two  board members were appointed                                                                    
by the governor. Mr. Paschall responded in the affirmative.                                                                     
                                                                                                                                
Co-Chair Meyer  queried the total  number of  board members.                                                                    
Mr. Paschall replied that the  board member numbers could be                                                                    
changed by the corporation. He  assumed there were between 5                                                                    
and 9 members of the board.                                                                                                     
                                                                                                                                
Senator  Hoffman  stressed  that   two  board  members  were                                                                    
appointed by the governor. Mr. Paschall agreed.                                                                                 
                                                                                                                                
Senator Olson queried the reasoning  of the incorporation of                                                                    
the  recent amendment  related  to  lobbyists. Mr.  Paschall                                                                    
replied that  the bank had  requested the ability to  hire a                                                                    
lobbyist. The  state had an  ownership interest in  the bank                                                                    
when it was initially created, so  the bank could not have a                                                                    
lobbyist at that time. The  state no longer had an ownership                                                                    
interest in  the bank, so  the bank was facing  a logistical                                                                    
issue  of  maintaining   involvement  with  the  legislative                                                                    
process.                                                                                                                        
                                                                                                                                
Co-Chair Meyer  surmised that the  bank had a  very specific                                                                    
interest,  because  they  were statutory  obligated  to  the                                                                    
state.  He  felt  that  they  still  had  a  strong  tie  to                                                                    
government, so there was question  as to the appropriateness                                                                    
to have a  lobbyist to influence law making.  He wondered if                                                                    
the  amendment was  made  in the  other  body. Mr.  Paschall                                                                    
replied that the amendment was made in the other body.                                                                          
                                                                                                                                
10:29:32 AM                                                                                                                   
                                                                                                                                
Co-Chair  Meyer  wondered  if  the  bank  had  a  government                                                                    
affairs  employee. Mr.  Paschall  replied  in the  negative,                                                                    
because they only had ten employees.                                                                                            
                                                                                                                                
Co-Chair Meyer  asked if the  bank was reviewed  every three                                                                    
years.  Mr.  Paschall  responded   that  the  bank  was  not                                                                    
currently  reviewed by  the Banking  Commission, because  it                                                                    
was  excluded from  all  banking laws  that  apply to  other                                                                    
banks.  The  statutes  regulating  the bank  were  the  only                                                                    
regulating statutes  for the bank,  which was why  they were                                                                    
asking to  be reviewed.  It helped  their ability  to obtain                                                                    
credit from other lenders.                                                                                                      
                                                                                                                                
Senator  Dunleavy remarked  that the  bank may  be the  only                                                                    
outfit that did not employ a lobbyist.                                                                                          
                                                                                                                                
Co-Chair Meyer  was not  concerned with  whether or  not the                                                                    
bank had a lobbyist.                                                                                                            
                                                                                                                                
Vice-Chair Fairclough queried  the definition of "resident."                                                                    
Mr. Paschall  replied that the  resident status  referred to                                                                    
the general statute, which was  a resident for one year with                                                                    
the intention of staying in the state.                                                                                          
                                                                                                                                
CSHB 121(FIN)  was HEARD and  HELD in committee  for further                                                                    
consideration.