Legislature(2011 - 2012)CAPITOL 120
04/08/2011 05:00 PM RULES
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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 used. 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 collateral. 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 collateral". 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 program. 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 water. 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 1. 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.