Legislature(2011 - 2012)SENATE FINANCE 532

01/20/2012 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 51 STATE VENDING LICENSES TELECONFERENCED
Heard & Held
+ SB 53 COMMISSION ON THE STATUS OF WOMEN TELECONFERENCED
Heard & Held
+ SB 103 WORKERS' COMPENSATION FOR FIREFIGHTERS TELECONFERENCED
Heard & Held
+ SB 68 COMMERCIAL FISHING & AGRICULTURE BANK TELECONFERENCED
Heard & Held
+ SB 30 RETURN OF SEIZED PROPERTY TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
SENATE BILL NO. 68                                                                                                            
                                                                                                                                
     "An Act relating to the examinations, board, loans,                                                                        
     records, and lobbying contracts of the Alaska                                                                              
     Commercial Fishing and Agriculture Bank; and providing                                                                     
     for an effective date."                                                                                                    
                                                                                                                                
10:19:10 AM                                                                                                                   
                                                                                                                                
SENATOR JOHN  COGHILL, introduced  SB 68. He  explained that                                                                    
SB   68  would   strengthen  the   Commercial  Fishing   and                                                                    
Agriculture  Bank (CFAB)  and its  ability to  serve member-                                                                    
owners. The CFAB  was created by the  legislature to fulfill                                                                    
a  need for  financing the  agricultural and  fishing permit                                                                    
industries.  The bill  would remove  dollar limitations  for                                                                    
co-op members  seeking loans for  tourism-related activities                                                                    
and the  development or  exploitation of  natural resources.                                                                    
He stated  that SB 68  would also  allow CFAB to  make loans                                                                    
for capital investment or operating capital to a shore-                                                                         
based   fish   processor,   a  timber   processor,   or   an                                                                    
agricultural processor or  harvester with facilities located                                                                    
in  Alaska.  He  furthered  that SB  68  would  extend  this                                                                    
allowance to tourism-related  activities and the development                                                                    
or  exploitation   of  natural  resources  as   outlined  in                                                                    
subsections  15  and 16  of  the  bill.  He noted  that  the                                                                    
legislature supplied  $32 million in  seed money to  CFAB to                                                                    
kick start  it he cooperative  and since the coop  was using                                                                    
dollars borrowed from the general  fund, CFAB was prohibited                                                                    
by law from  hiring a lobbyist because it was  thought of as                                                                    
a  quasi-governmental entity  until  it had  paid the  state                                                                    
back the full amount of  the loan with interest. He informed                                                                    
the committee  that CFAB had  fulfilled that  obligation and                                                                    
was  an  independent business,  so  there  was not  need  to                                                                    
prohibit them from  having a lobbyist. He  explained that SB                                                                    
68 required CFAB's  financial records to be  examined by the                                                                    
Department  of  Commerce  Division of  Banking  at  36-month                                                                    
intervals and required  CFAB to reimburse the  state for the                                                                    
cost of the audit.                                                                                                              
                                                                                                                                
10:23:40 AM                                                                                                                   
                                                                                                                                
Senator  Coghill reviewed  the Sectional  Analysis (copy  on                                                                    
file).   He  stated   that  Section   1  would   remove  the                                                                    
requirement  that  one  member  of the  CFAB  board  of  the                                                                    
directors  be a  resident farmer.  He noted  that there  had                                                                    
been  some contention  around the  removal  of the  resident                                                                    
farmer, because some  people prefer the farm  seat. He noted                                                                    
that the  removal did not  preclude the board from  having a                                                                    
resident  farmer,  but  it   was  occasionally  a  difficult                                                                    
position to  fill. He  explained that  Section 2  dealt with                                                                    
sixteen subsections  under the  lending powers of  the bank.                                                                    
He  noted that  Section  2  subsections 5,  6,  and 7  would                                                                    
remove  the dollar  limitations. He  remarked that  in 2002,                                                                    
the  legislature  added the  limitations,  but  there was  a                                                                    
change to  CFAB's authority. Removing the  limitations would                                                                    
allow CFAB  to play a  bigger role in industry.  He reminded                                                                    
the  committee that  CFAB  was  a private,  membership-owner                                                                    
based organization.                                                                                                             
                                                                                                                                
10:29:00 AM                                                                                                                   
                                                                                                                                
He  explained that  Section 2  subsection 8  would clarified                                                                    
that a person who received  a loan for capital investment or                                                                    
operating capital to a shore-based  fish processor, a timber                                                                    
processor, or  an agricultural processor or  harvester, must                                                                    
meet  all requirements  except  for  residency and  resident                                                                    
ownership   of  company.   He  furthered   that  Section   2                                                                    
subsection  10  would add  new  loans  to non-residents  for                                                                    
capital investment  or operating capital to  operate tourism                                                                    
activities   under  subsection   15   and  development   and                                                                    
exploitation of  natural resources  under subsection  16, to                                                                    
loans secured by liens subordinate  to valid first liens and                                                                    
security agreements granted to another creditor.                                                                                
                                                                                                                                
Senator Coghill  stated that Section  2 subsection  12 would                                                                    
add  new loans  to non-residents  for capital  investment or                                                                    
operating   capital  to   an  operator   of  tourism-related                                                                    
activities and  facilities dedicated  to the  development or                                                                    
exploitation of  natural resources,  to provisions  for CFAB                                                                    
to participate  with another bank without  the obligor being                                                                    
a member of CFAB. He  furthered that Section 2 subsection 13                                                                    
would allow  CFAB to purchase  or participate in  loans from                                                                    
other lenders for  loans to non-residents whether  or not an                                                                    
obligor is  a member of  the bank.  He noted that  Section 2                                                                    
subsections 15 and  16 would add new  subsections related to                                                                    
non-residents to receive loans.                                                                                                 
                                                                                                                                
Senator  Coghill pointed  out that  Section 3  would add  an                                                                    
audit  by Department  of Commerce,  Community, and  Economic                                                                    
Development,  Division  of  Banking and  Securities,  as  an                                                                    
exception  to   the  confidentiality  provision   of  CFAB's                                                                    
financial record. He noted that  Sections 4 and 5 related to                                                                    
adding  new  statutes. He  explained  that  Section 6  would                                                                    
repeal the definition of "resident  farmer" and would repeal                                                                    
the prohibition  of CFAB having  a lobbyist. He  stated that                                                                    
Section  7 would  establish a  section prohibiting  any bank                                                                    
examination until one year after  the effective date of this                                                                    
act.  He  concluded  that  Section   8  would  establish  an                                                                    
immediate-effective-date provision to this act.                                                                                 
                                                                                                                                
10:31:17 AM                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman queried  the current  available funds  for                                                                    
loans.  Senator Coghill deferred  to the CFAB ceo, but noted                                                                    
that the bill would expand  the capacity for the loans based                                                                    
on the collateral.                                                                                                              
                                                                                                                                
Co-Chair Hoffman looked at page 4,  areas 15 and 16 of SB 68                                                                    
and felt "tourism related activities"  was too broad a term.                                                                    
He wondered  what funds were  available for  tourism related                                                                    
activities.  Senator Coghill  did not  know what  funds were                                                                    
available.  He added  that  he was  not  concerned with  the                                                                    
"tourism related  activities", because applicants must  be a                                                                    
member  with collateral,  and maintain  a  brick and  mortar                                                                    
within the state.                                                                                                               
                                                                                                                                
Senator Olson  wondered what the  other major  banks thought                                                                    
of  SB 68.  Senator Coghill  did  not know  of any  negative                                                                    
comments from the major banks.                                                                                                  
                                                                                                                                
Senator  Thomas looked  at page  1,  line 7  and queried  an                                                                    
alternative  to "nine  natural  persons."  He was  concerned                                                                    
with some  of the language  related to the  term "operator."                                                                    
Senator  Coghill agreed  to provide  that  information at  a                                                                    
later date.                                                                                                                     
                                                                                                                                
Co-Chair  Stedman   noted  a  new   fiscal  note   from  the                                                                    
Department of Commerce, Community and Economic Development.                                                                     
                                                                                                                                
LELA  KLINGERT,  PRESIDENT,  ALASKA COMMERCIAL  FISHING  AND                                                                    
AGRICULTURE BANK, testified in support of SB 68.                                                                                
                                                                                                                                
10:39:46 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman  asked if the  bill would impact  the funds                                                                    
available to  CFAB. Ms. Klingert  responded that  there were                                                                    
no restrictions on the fund.                                                                                                    
                                                                                                                                
Senator Thomas  queried some  of the  language in  the bill,                                                                    
specifically related to  corporations versus natural people.                                                                    
Ms. Klingert responded that she  did not know. She furthered                                                                    
that it was legal terminology.                                                                                                  
                                                                                                                                
Co-Chair Stedman  requested that  Ms. Klingert to  come back                                                                    
to  the  committee  with   more  information  regarding  the                                                                    
committee members' requests. Senator  Coghill stated that he                                                                    
would make sure the committee received the information.                                                                         
                                                                                                                                
SB  68  was   HEARD  and  HELD  in   Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
CSSSSB 51(L&C) Explanation of Changes.pdf..pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 America's blind unemployment 70%.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Docs-Employment Stats for Blind...AFB.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Docs-Forbes - Blind people in workplace.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 AS 23.15.010-.210 VocRehab.Vending.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Docs-Leg.Res.Blind Vendor BEP 9-27-2010.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Docs-Legal Memo -Equal protection 9-2-2010.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Docs-Lighthouse for the Blind Honored.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Docs-Unemployment. . .Reasons Dissing Blind.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Sectional 27-LS0079B 3-18-2011.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 51 Sponsor Statement Rev. 2-9-2011.pdf SFIN 1/20/2012 9:00:00 AM
SB 51
SB 53 Background Annual Repor 1990t.pdf SFIN 1/20/2012 9:00:00 AM
SB 53
SB 53 Sponsor Statement 1.pdf SFIN 1/20/2012 9:00:00 AM
SB 53
SB 103 Changes Between Versions A and M.pdf SFIN 1/20/2012 9:00:00 AM
SB 103
SB 103 Firefighter presumption - NCCI Analysis.pdf SFIN 1/20/2012 9:00:00 AM
SB 103
SB 103 Worker's Compensation Board Resolution.pdf SFIN 1/20/2012 9:00:00 AM
SB 103
SB 153 Letter of Support.pdf SFIN 1/20/2012 9:00:00 AM
SB103 Sponsor Statement.pdf SFIN 1/20/2012 9:00:00 AM
SB 103
SB 30 - Background Information.pdf SFIN 1/20/2012 9:00:00 AM
SB 30
SB 30 - Explanation of Changes.pdf HJUD 2/13/2012 1:00:00 PM
SFIN 1/20/2012 9:00:00 AM
SB 30
SB 30 - Letter of Support Alaska Homebuilers.pdf HJUD 2/13/2012 1:00:00 PM
SFIN 1/20/2012 9:00:00 AM
SB 30
SB 30 - Letter of Support Nat'l Federation of Indep. Business.pdf HJUD 2/13/2012 1:00:00 PM
SFIN 1/20/2012 9:00:00 AM
SB 30
SB 30 - Section Analysis.pdf SFIN 1/20/2012 9:00:00 AM
SB 30
SB 30 - Sponsor Statement.pdf SFIN 1/20/2012 9:00:00 AM
SB 30
SB 103 WCCW Opposition Letter.pdf SFIN 1/20/2012 9:00:00 AM
SB 103
SB 53 Girl Scouts Letter.doc SFIN 1/20/2012 9:00:00 AM
SB 53
SB 103 APEI Letter.docx SFIN 1/20/2012 9:00:00 AM
SB 103
SB 103 FF 1 in AK 2008.pdf SFIN 1/20/2012 9:00:00 AM
SB 103
SB 53 Opposition Letter-Grimwood.docx SFIN 1/20/2012 9:00:00 AM
SB 53