Legislature(2011 - 2012)CAPITOL 120

04/08/2011 05:00 PM RULES

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 121(RLS) Out of Committee
Moved CSHB 146(RES) Out of Committee
Moved CSHCR 12(RLS) Out of Committee
        HB 121-LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN                                                                    
5:26:37 PM                                                                                                                    
CHAIR JOHNSON announced  that the next order of  business would be                                                              
HOUSE BILL  NO. 121, "An Act  establishing the commercial  charter                                                              
fisheries  revolving loan  fund,  the mariculture  revolving  loan                                                              
fund, and  the Alaska microloan  revolving loan fund  and relating                                                              
to those  funds and loans from  those funds; and providing  for an                                                              
effective date."  [Before the committee is CSHB 121(FIN).]                                                                      
5:26:48 PM                                                                                                                    
CURTIS THAYER,  Deputy Commissioner,  Office of the  Commissioner,                                                              
Department   of  Commerce,   Community   &  Economic   Development                                                              
(DCCED),  explained that  the committee packet  should include  an                                                              
amendment  that  would  cleanup  CSHB 121(FIN).    The  amendment,                                                              
labeled 27-GH1728\X.2, Kane, 4/8/11, read:                                                                                      
     Page 4, line 8, following "commissioner":                                                                                  
          Insert ", which may include other collateral in                                                                       
     addition to a charter halibut permit"                                                                                      
MR.  THAYER  further  explained  that  the  assumption  with  this                                                              
revolving loan  program is that  the charter halibut  permit would                                                              
be  used  as collateral.    However,  after  the passage  of  CSHB                                                              
121(FIN)  from  the  House Finance  Committee  some  charter  boat                                                              
skippers  have  sued DCCED  regarding  the  permit system.    This                                                              
amendment  would  allow  the  program to  go  forward  and  allows                                                              
something   other  than  the   charter  permit   to  be   used  as                                                              
collateral, whether  it is the  boat, property, or  something else                                                              
from the borrower.  He noted that this would protect the state.                                                                 
5:28:04 PM                                                                                                                    
REPRESENTATIVE  GATTO  asked if  one  could use  his/her  personal                                                              
residence as collateral.                                                                                                        
MR. THAYER replied yes.                                                                                                         
CHAIR JOHNSON offered  that the purpose of this  amendment is that                                                              
with the encumberment  of the permits through  litigation, [DCCED]                                                              
would  potentially  be offering  non  collateralized  loans.   The                                                              
desire  was to specify  that other  forms of  collateral could  be                                                              
5:28:26 PM                                                                                                                    
REPRESENTATIVE  GRUENBERG  asked   if  the  current  language  and                                                              
proposed  amendment require  that  the charter  halibut permit  be                                                              
part of the collateral used.                                                                                                    
MR. THAYER replied no.                                                                                                          
REPRESENTATIVE  GRUENBERG suggested then  that the language  needs                                                              
to be  changed because  [the adoption  of the proposed  amendment]                                                              
would mean  that the charter  halibut permit  must be part  of the                                                              
CHAIR  JOHNSON   related  his  understanding  that   the  proposed                                                              
amendment means that  the charter halibut permit would  have to be                                                              
used as collateral.                                                                                                             
5:30:10 PM                                                                                                                    
REPRESENTATIVE   GRUENBERG   offered    Conceptual   Amendment   1                                                              
inserting  language  "it  may  include  the permit  and  or  other                                                              
5:30:40 PM                                                                                                                    
REPRESENTATIVE  CHENAULT asked  if currently  the charter  halibut                                                              
permit is used as collateral.                                                                                                   
MR.  THAYER  replied yes,  that  was  the  intention of  the  loan                                                              
REPRESENTATIVE CHENAULT  inquired then  why the language  would be                                                              
added  as it's  duplicative.   He related  his understanding  that                                                              
DCCED wants  to add language  relating "other collateral  that may                                                              
be associated with that loan and not the permit".                                                                               
REPRESENTATIVE  GRUENBERG  opined that  the  language  on page  4,                                                              
line 8,  is generic and  can include the  permit or  another else.                                                              
He  further opined  that the  proposed amendment  would muddy  the                                                              
MR. THAYER  related that he had  worked out the language  with the                                                              
co-chairs of  the House Finance  Committee who expressed  the need                                                              
to tighten the language.                                                                                                        
REPRESENTATIVE  GRUENBERG  related  his understanding  that  DCCED                                                              
wants  to  be  able  to  use  the  permit  and/or  anything  else.                                                              
Therefore,  the  language doesn't  need  to  be tight  and  should                                                              
remain as written.   He, therefore, withdrew  Conceptual Amendment                                                              
5:33:03 PM                                                                                                                    
MR.  THAYER specified  that  with the  amendment  labeled X.2,  he                                                              
wanted to be clear that additional collateral is allowed.                                                                       
5:33:21 PM                                                                                                                    
REPRESENTATIVE   OLSON  suggested   ending   the  sentence   after                                                              
"collateral" [on page 4, line 7].                                                                                               
REPRESENTATIVE GRUENBERG  opined that he wouldn't  delete the last                                                              
phrase because  it's extremely  important  that the collateral  be                                                              
acceptable  to   the  commissioner,  which  he   characterized  as                                                              
quality control.                                                                                                                
5:34:01 PM                                                                                                                    
CHAIR  JOHNSON inquired  as  to  whether inserting  the  following                                                              
language would  be acceptable:   "which include other  collateral,                                                              
which may include a charter halibut permit".                                                                                    
REPRESENTATIVE GRUENBERG said he is agreeable to that.                                                                          
5:34:45 PM                                                                                                                    
REPRESENTATIVE   AUSTERMAN  related   his   belief  the   existing                                                              
language implies  that the permit  would be used as  collateral on                                                              
[subparagraph] (4).   Nowhere in the bill is it  explicit that the                                                              
permit would be  used as collateral, other than  the amendment, he                                                              
said.  He asked if that's correct.                                                                                              
MR. THAYER replied yes.                                                                                                         
5:35:15 PM                                                                                                                    
CHAIR  JOHNSON clarified  that his  suggestion was  to insert  the                                                              
language "which  may include".   Therefore, once the  lawsuits are                                                              
settled and  clear ownership  is provided,  then permits  could be                                                              
collateralized.  He asked if that cleans up the language.                                                                       
MR. THAYER replied yes.                                                                                                         
5:35:46 PM                                                                                                                    
REPRESENTATIVE TUCK  surmised then  that an individual  "may" want                                                              
to  use  a  charter  halibut permit,  but  it  isn't  required  in                                                              
addition to other collateral.                                                                                                   
MR. THAYER answered yes.                                                                                                        
5:36:12 PM                                                                                                                    
CHAIR   JOHNSON  moved   that  the   committee  adopt   Conceptual                                                              
Amendment 2, to insert the following language:                                                                                  
      "which include other collateral which may include a                                                                       
     charter halibut permit"                                                                                                    
There being no objection, Conceptual Amendment 2 was adopted.                                                                   
5:36:52 PM                                                                                                                    
CHAIR JOHNSON,  upon determining  no one  else wished  to testify,                                                              
closed public testimony.                                                                                                        
5:37:14 PM                                                                                                                    
REPRESENTATIVE OLSON  moved to report  HB 121, as amended,  out of                                                              
committee  with individual  recommendations  and the  accompanying                                                              
fiscal  notes.    There being  no  objection,  CSHB  121(RLS)  was                                                              
reported from the House Rules Standing Committee.                                                                               

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