Legislature(1993 - 1994)
04/08/1993 03:00 PM House L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HB 252 REFINANCING COMMERCIAL FISHING LOANS Number 049 REP. CARL MOSES, PRIME SPONSOR of HB 252, read the following sponsor statement: "I have introduced HB 252 to give the Department of Commerce the authority to refinance existing commercial fishing loans. Most of the 1,200 commercial fisherman who now have state loans are paying 10.5% in interest rates. Regulations provide for new fixed rate loans at 2% above the bank prime rate. Since the current bank prime rate is 6%, current commercial fishing loans are now at 8% rates. However, the Department of Commerce has no mechanism to allow for current loans to be refinanced to take advantage of the lower interest rates that are currently available. "Commercial fishermen have been faced these past few years with low prices and unpredictable fish returns. Following the disastrous 1991 salmon season, the Department of Commerce approved loan extensions for nearly half of the existing loans. More than 3000 fishermen are reportedly in arrears this year to the Internal Revenue Service for back taxes. The commercial fishing industry is obviously in bad shape. Allowing fishermen to refinance their loans and reduce their monthly payments is one obvious way the legislature can help the industry out. Although there is a cost for such a refinancing program, there is sufficient cash flow in the revolving loan fund to accommodate it. Additionally, fishermen would have an easier time making their payments if their loans were at lower interest rates." Number 100 MARTIN RICHARDS, DIRECTOR, DIVISION OF INVESTMENTS, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, testified in support of HB 252. Mr. Richard stated that current statutes do not allow for refinancing and went on to describe the mechanics of the loan program. Mr. Richards pointed out that HB 252 would mean approximately $1.6 million less each year in interest payments coming into the fund. Number 286 BRUCE SCHACTLER, representing AREA K SEINERS ASSOCIATION, testified from Kodiak in support of HB 252. Mr. Schactler stated that many fishermen borrowed money based on the steady markets of the 80's, and so much has changed since, that HB 252 would be paramount to fishermen's economic survival. MR. SCHACTLER pointed out that the fund may gain less money in interest if HB 252 passes. But without the ability to refinance, many fishermen may have to default, which would be very expensive to the state. Number 360 JERRY MCCUNE, representing UNITED FISHERMEN OF ALASKA, testified in support of HB 252. Mr. McCune echoed the above testimony with regards to the great need for this legislation. REP. MACKIE moved for passage of HB 252 with individual recommendations and a fiscal note.
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