02/19/1993 08:00 AM House FSH

  HB 123:  LOANS FOR IFQ'S                                                     
                                                                               
  Number 163                                                                   
                                                                               
  REPRESENTATIVE ULMER spoke briefly about HB 123, which                       
  related to loans for individual fishing quotas (IFQs).  She                  
  advised that it allowed Alaskan fishermen to have the                        
  financial backing to purchase quota shares by extending the                  
  existing limited entry permit loan program to quota shares.                  
  Currently, there was money in the revolving loan fund which                  
  allowed capitalization of this program without having to                     
  find new money, she said, and added the federal government                   
  had advised that it would be late this year before the                       
  regulations were in place and they did the adjudications                     
  necessary to determine who got the quota shares and how much                 
  they would be.  "If we put HB 123 in place this session, it                  
  will be ready when the federal government finishes the                       
  regulations," she said.                                                      
                                                                               
  GREG WINEGAR, LOAN MANAGER, DEPARTMENT OF COMMERCE AND                       
  ECONOMIC DEVELOPMENT (DCED), advised that HB 123 amended the                 
  loan program and made it more available to more people.                      
  Currently the interest rate was eight percent he said, and                   
  finished by saying that the department supported HB 123.                     
                                                                               
  RICK LAUBER, LOBBYIST, PACIFIC SEAFOOD PROCESSORS                            
  ASSOCIATION, testified in support of HB 123.  He said the                    
  worth of the quota share was unknown, but he thought                         
  borrowers should be able to pay it off in about five years.                  
                                                                               
  Number 420                                                                   
                                                                               
  JAY GINTER, BIOLOGIST, NATIONAL MARINE FISHERIES SERVICE,                    
  defined IFQs and advised that the concept would be expensive                 
  to implement.  He thought the cost versus benefit ratio was                  
  about ten to one.                                                            
                                                                               
  REPRESENTATIVE ULMER asked if the federal government was                     
  planning to implement a loan program similar to the program                  
  in HB 123.                                                                   
                                                                               
  MR. GINTER was not aware of such a program on the federal                    
  level.                                                                       
                                                                               
  REPRESENTATIVE DAVIDSON asked if the federal government was                  
  more concerned with preserving businesses of the small                       
  fishermen or just with the efficiency of harvests.                           
                                                                               
  MR. GINTER advised that the federal government looked to                     
  support smaller fishermen by providing a one percent cap on                  
  the harvests and a .5% cap on crab harvests.                                 
                                                                               
  MR. THOMSON interjected that the UFA had not been involved                   
  in developing the IFQ program, yet they liked the concept of                 
  HB 123.  He further said that HB 123 needed restraint                        
  language to not make loans to people who already had loans.                  
  Loans should be made to really small fishermen and crew                      
  members who wished to be self-supporting, he believed.                       
                                                                               
  MR. SCHACTLER suggested the loan program was a great idea,                   
  but needed refinancing options consistent with programs in                   
  other states.                                                                
                                                                               
  Number 576                                                                   
                                                                               
  GERON BRUCE, SPECIAL ASSISTANT, ADF&G, advised that the                      
  ADF&G supported HB 123.                                                      
                                                                               
  Number 590                                                                   
                                                                               
  REPRESENTATIVE ULMER asked whether or not loans could be                     
  linked to landing the product in Alaska and if that was                      
  feasible.  She also asked about changing the loan rates.                     
                                                                               
  MARTIN RICHARD, DIRECTOR, DIVISION OF INVESTMENTS, DCED, had                 
  no comment on the first question and asked how, from a                       
  lending standpoint would he enforce how or where fishermen                   
  landed their fish.  In response to the second question, he                   
  said that fishing loans were currently refinanced at 10.5%,                  
  as required by statute.  He then stated the DCED had always                  
  charged the maximum rate which was a fixed, floating rate                    
  based on the Wall Street prime.  He noted one problem with                   
  refinancing many loans at a time was that it was labor-                      
  intensive to modify each loan.                                               
                                                                               
  LINDA BEHNKEN, EXECUTIVE DIRECTOR, ALASKA LONGLINE                           
  FISHERMEN'S ASSOCIATION, said British Columbia went to a                     
  quota share program.  She added that Alaska needed to                        
  develop and market more value-added products.  Further, she                  
  would like to see more consistent fishing throughout the                     
  year instead of the one-day, 30K pound catches.                              
                                                                               
  TAPE 93-7, SIDE A                                                            
  Number 000                                                                   
                                                                               
  MS. BEHNKEN said longline fishermen supported HB 123.                        
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  VICE CHAIRMAN OLBERG asked members and the public if there                   
  were further comments.  Hearing none, he adjourned the                       
  meeting at 9:55 a.m.