Legislature(2003 - 2004)

05/10/2003 09:05 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
     CS FOR HOUSE BILL NO. 105(FIN)                                                                                             
     "An Act relating to loans to satisfy past due federal tax                                                                  
     obligations of commercial fishermen and to the commercial                                                                  
     fishing loan program."                                                                                                     
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Co-chair  Wilken   announced  that  this  legislation   would  allow                                                            
commercial  fisherman to  secure loans to  satisfy federal  Internal                                                            
Revenue Service (IRS) debt retirement.                                                                                          
SENATOR  GARY  STEVENS,  the bill's  sponsor,  expressed  that  this                                                            
legislation  results from the State's  Salmon Task Force  efforts to                                                            
assist the  "in crisis" fishing  industry.  He stated that  the bill                                                            
proposes changes to the  Commercial Fishing Revolving Loan Fund that                                                            
is funded by  its participants and  administered by the Division  of                                                            
Investments,  Department of Community  and Economic Development,  by                                                            
reinstating  a  previous   loan  program  that  allowed   commercial                                                            
fishermen  "to access these  funds to satisfy  past due federal  tax                                                            
Senator G. Stevens  voiced that the Salmon Task Force  supports this                                                            
legislation  in  order  to  protect  and  retain  in-state  resident                                                            
limited-entry salmon permits  and continue providing jobs in regions                                                            
of the  State with  limited job  opportunities.  He emphasized  that                                                            
these loans would be "secured"  and have a maximum $40,000 limit. He                                                            
stated that in addition  to loan requirements, applicants must prove                                                            
that they  are a current  resident  of the State,  must have  been a                                                            
resident  for the  two  previous years;  must  be current  on  their                                                            
federal  tax filings;  and must have  a payment  agreement with  the                                                            
IRS.  He  stated  that  this  legislation   would  incur  a  $30,000                                                            
detriment in FY 04 and  a detriment of $13,000 thereafter through FY                                                            
Senator G. Stevens noted  that the removal of the word "promptly" in                                                            
Section  3, subsection  (b),  line 31  on page  4,  would allow  the                                                            
Department   flexibility   regarding  the   timeline  required   for                                                            
advertising  the sale of repossessed  permits in order to  entertain                                                            
"quality offers." This language reads as follows.                                                                               
     Sec. 3. AS 16.10.337(b) is amended to read:                                                                                
     (b)  If the commission  does  not exercise  its right of  first                                                            
     refusal within  30 days after it receives the  offer, or if the                                                            
     permit  is   not  subject  to  a  buy-back  program   under  AS                                                            
     16.43.290-16.43.330,  the department shall [PROMPTLY] advertise                                                            
     and sell the permit.                                                                                                       
     Next Text Underlined [DELETED TEXT BRACKETED]                                                                            
Senator   Bunde  asked   whether  the  bill's   two-year   residency                                                            
requirement might incur a legal challenge.                                                                                      
Senator G.  Stevens stated that the  two-year residency requirement                                                             
is not a new provision  in the bill, and he stated that, to date, no                                                            
legal challenge  has been introduced. He clarified  that in addition                                                            
to the  two-year  residency  requirement,  the applicant  must be  a                                                            
current resident of the State.                                                                                                  
Senator Taylor  clarified that federal  law does not allow  for more                                                            
than a two-year residency requirement.                                                                                          
Senator  Taylor offered  a motion  to move the  bill from  Committee                                                            
with individual recommendations and attached fiscal note.                                                                       
There being no  objections, HB 105 was REPORTED from  Committee with                                                            
previous  negative $30,000  fiscal note  #1 from  the Department  of                                                            
Community and Economic Development.                                                                                             

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