Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/13/2012 04:00 PM COMMUNITY & REGIONAL AFFAIRS
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* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SB 204-LOANS TO COMMUNITY QUOTA ENTITIES/PERMITS 4:06:01 PM CHAIR OLSON announced the consideration of SB 204 and noted that the committee heard it once before. 4:06:12 PM DAVID SCOTT, Staff, Senator Donald Olson and Aide to the CRA committee, sponsor of the legislation, reminded the committee that during the previous hearing he described how the bill would change current law. He noted that Wanetta Ayers and Duncan Fields were available for questions. Responding to a question from the Chair, he confirmed that there had been no phone calls, in support or opposition to the bill. SENATOR WAGONER referenced the side-by-side document in the packets that compared current law to the provisions in SB 204. He asked if there was a specific reason for reducing the maximum loan amount from $2 million to $1 million. It seems counterintuitive. 4:08:54 PM WANETTA AYERS, Director, Division of Economic Development, Department of Commerce, Community and Economic Development (DCCED), asked if he was referring to the comparison with the quota financing currently available for commercial fisheries. CHAIR OLSON said the current law has a loan limit of $2 million and SB 204 reduces the maximum to $1 million. MS. AYERS explained that under the commercial fishing revolving loan fund, which is for individuals operating in the open access halibut fishery for quota share, the loan limit is $2 million. She acknowledged that proponents of the bill were concerned that the $1 million loan limit may preclude some of the nonprofit organizations that would be financed under the Community Quota Entity (CQE) revolving loan fund from achieving that 50,000 pound limit, but the decision when the bill was initially drafted was that a $1 million loan limit would be sufficient. SENATOR WAGONER asked if each entity has the ability to buy up to 50,000 pounds. 4:09:32 PM SENATOR MENARD joined the committee. MS. AYERS answered that was correct. She added that DCCED believes that the structure of the fisheries enhancement revolving loan fund was more appropriate for these nonprofit CQEs. 4:12:53 PM DUNCAN FIELDS, Council Member, North Pacific Fishery Management Council, reviewed the comparative relationship between a nonprofit community organization like a CQE and an individual that has an individual load limit. He then explained that 45 communities were qualified to form a nonprofit CQE to acquire IFQ shares and the thinking was that with a $1 million limit the program could be funded with $45 million. If the limit was $2 million, it would be a substantially larger amount. In the balance was funding a program that all 45 communities could participate in versus the $2 million limit offered to individuals in the commercial loan program. SENATOR MENARD commented that this would help commerce in those Gulf of Alaska communities. MR. SCOTT echoed the comments of Senator Menard. SENATOR WAGONER asked where the quota came from. 4:15:43 PM MR. SCOTT said his understanding was that the communities would purchase IFQ shares from the current bank. SENATOR WAGONER asked if the communities could purchase his IFQs. MR. SCOTT said yes. SENATOR WAGONER said the math does not work; his IFQ shares were worth $37.50 per pound so either he'd get just $20 per pound or the $1 million would buy approximately half the quota. SENATOR KOOKESH pointed out that the lower limit provides an opportunity for more communities to get a foot in the door. MS. AYERS confirmed that was correct. She added that as funds revolve through the loan fund and entities are able to go back and obtain subsequent loans, DCCED believes it will be a successful program. CHAIR OLSON thanked Ms. Ayers and Mr. Fields. 4:18:22 PM SENATOR WAGONER moved to report SB 204 from committee with individual recommendations and attached fiscal note(s). CHAIR OLSON announced that without objection, SB 204 moved from the Senate Community and Regional Affairs Standing Committee.