Legislature(1993 - 1994)

05/04/1994 01:50 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
  SB 132    An  Act  relating  to loans  for  the  purchase of                 
            individual fishery quota shares.                                   
                                                                               
            CS SB 132 (RES)  am was reported out  of Committee                 
            with "no  recommendations" and with a  fiscal note                 
            by  the   Department  of  Commerce   and  Economic                 
            Development dated  2/04/94 and a Letter  of Intent                 
            provided by the House Resources Committee.                         
  SENATE BILL 132                                                              
                                                                               
       "An  Act  relating   to  loans  for  the   purchase  of                 
       individual fishery quota shares."                                       
                                                                               
  BRYCE EDGMON, STAFF, SENATOR GEORGE JACKO, explained that CS                 
  SB 132 would expand the  Commercial Fisheries Revolving Loan                 
  Fund Program to allow  Alaskan fishermen to obtain loans  to                 
  purchase Individual Fisheries Quotas (IFQs).  The Commercial                 
  Fisheries Revolving Loan Fund Program would service the debt                 
  to  purchase  limited  entry permits,  purchase  or  upgrade                 
  vessels, and purchase fisheries related gear.                                
                                                                               
  Co-Chair MacLean MOVED to report  CS SB 132 (RES) am out  of                 
  Committee  with  individual  recommendations  and  with  the                 
  accompanying fiscal notes.  She explained that the IFQs  are                 
  transferrable, which creates a fear  that fishermen from out                 
  of state  will purchase  the Alaskan  fishing permits.   The                 
  Division of Investments would provide loan money through the                 
  Revolving Loan Fund,  whereas Alaskan  commercial banks  are                 
  reluctant  to  help  Alaskan  fishermen   who  do  not  have                 
  sufficient  collateral.  The  legislation would keep Alaskan                 
  fishermen in business in Alaskan waters.                                     
                                                                               
  Representative Brown asked  the total amount of  money which                 
  the State would be distributing.  Mr. Edgmon replied that $5                 
  million dollars would be loaned in  FY95 and then between $4                 
  and $5 million dollars appropriated in FY96.  He pointed out                 
  that the  qualification  requirements are  stringent.    The                 
  Division  of Investments  does  have  a regulation  priority                 
  listing.                                                                     
                                                                               
  Representative  Brown  deliberated  on  the  different  loan                 
  funding resources available in the State.  She spoke against                 
  providing  commercial opportunity  to  fishmen over  another                 
  class of  requestors.   Mr. Edgmon  responded that  when the                 
  program was established, it  was the intent of the  State to                 
                                                                               
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  keep as many  limited entry permits in  residence ownership.                 
  The  loan program  was established  in order  to offer  that                 
  arrangement to as many fishermen  as possible.  The  program                 
  allows  resident  fishermen  to   compete  with  nonresident                 
  fishermen who have better access to capital.                                 
                                                                               
  (Tape Change, HFC 94-157, Side 2).                                           
                                                                               
  Representative  Grussendorf commented  that the  IFQ's would                 
  provide collateral  for the  small fisherman.   The  program                 
  would  keep  the   limited  entry  permits  in   the  State.                 
  Representative Hoffman added that the  fishing industry is a                 
  renewable resource and will continue to provide jobs to many                 
  small rural areas within Alaska.                                             
  GREG WINEGAR,  MANAGER, JUNEAU  LENDING BRANCH, DIVISION  OF                 
  INVESTMENTS,   DEPARTMENT   OF    COMMERCE   AND    ECONOMIC                 
  DEVELOPMENT, responded to Representative Navarre's questions                 
  regarding the loan  requirements for  State resident's.   He                 
  advised that the  residency requirement was the same for all                 
  eligibility  requirements, pointing  out that law  states in                 
  Section #A that a person would have  to actively participate                 
  for the  past five  years which  would have  to include  the                 
  preceding season.  The current legislation would change that                 
  to indicate participation for two of the past five years and                 
  that it would be necessary to  include the preceding season.                 
  The borrowing interpretation would be more liberal than that                 
  of the past.                                                                 
                                                                               
  There  being  NO  OBJECTIONS,  to  reporting the  bill  from                 
  Committee, it was  so ordered.  Representative  Foster MOVED                 
  to adopt  the House  Resources Committee  Letter of  Intent.                 
  There being NO OBJECTIONS, it was so ordered.                                
                                                                               
  CS SB 132  (RES) am was reported  out of Committee with  "no                 
  recommendations", with the House Resources Committee  Letter                 
  of  Intent  and with  a  fiscal  note by  the  Department of                 
  Commerce and Economic Development dated 2/04/94.                             

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