Legislature(2011 - 2012)BELTZ 105 (TSBldg)

02/10/2011 01:30 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 38 POLICE & FIREFIGHTER DEATH BENEFITS TELECONFERENCED
Heard & Held
*+ SB 67 LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
        SB  67-LOAN FUNDS:CHARTERS/MARICULTURE/MICROLOAN                                                                    
                                                                                                                                
1:39:42 PM                                                                                                                  
CHAIR EGAN announced SB 67 to be up for consideration.                                                                          
                                                                                                                                
1:40:04 PM                                                                                                                    
CURTIS  THAYER,  Deputy  Commissioner,  Department  of  Commerce,                                                               
Community and  Economic Development (DCCED), read  a statement in                                                               
support of SB 67.  He said the DCCED is on a  mission to foster a                                                               
business climate in this state  that is conducive to job creation                                                               
and   economic   growth.   The   department   is   actively   and                                                               
introspectively engaged in examining how it operates.                                                                           
                                                                                                                                
He said  the Commissioner's Office  recently formed  the Economic                                                               
Advisory Council  comprised of industry  leaders from  around the                                                               
state;  it has  been instrumental  in helping  the administration                                                               
plot a productive course towards  economic development. They have                                                               
sought input from NGOs,  trade associations, regional development                                                               
organizations,  ARDORs, the  CDQ  groups,  ANCSA Corporation  and                                                               
legislators.  A  commonly  heard   theme  has  been  to  increase                                                               
financing options for small businesses.                                                                                         
                                                                                                                                
MR. THAYER  said access to  critically needed capital can  be the                                                               
difference between  simply getting  by and actually  thriving. SB                                                               
67 creates  a suite of  three new  revolving loan programs  to be                                                               
housed in  the DCCED.  One is to  incentivize the  development of                                                               
the shellfish  mariculture industry, another is  to assist Alaska                                                               
charter  operators  in  acquiring  halibut  permits  in  the  new                                                               
regulatory  and management  regime  instituted by  NOAA, and  the                                                               
other is to seed micro enterprise development across the state.                                                                 
                                                                                                                                
1:42:23 PM                                                                                                                    
The  Commercial  Fisheries  Revolving  Loan  Fund  would  provide                                                               
access to capital for  Alaskan-owned charters, repatriate permits                                                               
to Alaskans, and  increase economic benefits to  Alaska from this                                                               
sector from  a recirculation of  earnings. The  Governor's Office                                                               
had over 100 inquiries on just  the issue of the halibut charters                                                               
last week.                                                                                                                      
                                                                                                                                
The Mariculture Revolving  Loan Fund would provide a  spark for a                                                               
growing  industry with  great  year-round  potential for  coastal                                                               
Alaska  communities and  entrepreneurs. Currently,  there are  67                                                               
permitted farms in Alaska, but only  25 of them are producing: 10                                                               
in Southeast and 15 in South-central communities.                                                                               
                                                                                                                                
1:43:03 PM                                                                                                                    
MR.  THAYER said  the Microloan  Revolving Loan  Fund would  help                                                               
small businesses  grow by providing loans  for start-ups, working                                                               
capital, inventory  expansion and  a variety of  other commercial                                                               
interests. Alaska  is one of  the few remaining states  without a                                                               
microloan program.                                                                                                              
                                                                                                                                
He  said  these  programs  would compliment  two  existing  small                                                               
business loan  programs administered by the  Division of Economic                                                               
Development:  the Small  Business Economic  Development Revolving                                                               
Fund and  the Rural Development  Initiative Fund, both  which are                                                               
geared  toward  long-term  financing. Small  businesses  are  the                                                               
number  one creator  of private  sector  jobs, he  said, so  this                                                               
legislation  will help  the  department in  its  efforts to  spur                                                               
sustainable economic growth in Alaska.                                                                                          
                                                                                                                                
1:44:03 PM                                                                                                                    
WANETTA  AYERS,  Director,   Division  of  Economic  Development,                                                               
Department  of  Commerce,   Community  and  Economic  Development                                                               
(DCCED), added  that Alaska  is lucky to  have a  responsible and                                                               
responsive banking  community that didn't participate  in some of                                                               
the actions that  created a lot of economic  uncertainty over the                                                               
last  several years.  They are,  in fact,  active small  business                                                               
lenders. The division's role is  to seed those business start ups                                                               
through the lending them money  that private lenders would not be                                                               
able  to lend  them. She  pointed  out that  even though  private                                                               
lenders didn't participate in some  of the activities that led to                                                               
economic   instability  they   are   now   operating  under   the                                                               
regulations and  oversight that  resulted from  those activities.                                                               
They  have to  live within  this  national framework  and try  to                                                               
create solutions that make sense in Alaska.                                                                                     
                                                                                                                                
She said  the three  new loan funds  are: the  Commercial Charter                                                               
Fisheries  Fund, the  Mariculture  Revolving Loan  Fund, and  the                                                               
Microloan Revolving  Fund. Each  one has different  features. She                                                               
emphasized  that they  are  all revolving  loan  funds where  the                                                               
repayments and  fees will  be retained within  each fund  to help                                                               
build more  funds for future  loans. The operating  expenses will                                                               
be paid from the earnings of  these funds. She said they received                                                               
a lot of input and input  from urban and rural leaders, and these                                                               
loan  programs  will help  rural  as  well  as urban  areas  that                                                               
haven't been  able to  access the small  business loan  funds the                                                               
department currently has available.                                                                                             
                                                                                                                                
MS.  AYERS  said  the  Halibut Charter  Revolving  Loan  Fund  is                                                               
precipitated by  the change in  the regulatory  management regime                                                               
for Halibut  Charter Fishing in  areas 2C and  3A in the  Gulf of                                                               
Alaska.  The  requirement  for   a  halibut  charter  permit  was                                                               
affective  on   February  1,  2011.  The   National  Oceanic  and                                                               
Atmospheric Administration  (NOAA) estimated,  based on  log book                                                               
activity, that  there were  going to be  532 permittees  and they                                                               
received  over  800 applications  for  those  permits. Right  now                                                               
permit  prices are  still being  established in  the marketplace,                                                               
but  a ballpark  range  is $40,000-100,000.  It  is important  to                                                               
provide  access to  capital for  Alaskan  charter operators  with                                                               
this  regulatory change  and  to repatriate  as  many permits  as                                                               
possible  to Alaska  as well  as increase  the level  or resident                                                               
participation  in  those fisheries  to  help  Alaska realize  the                                                               
economic benefits of bringing those permits back home.                                                                          
                                                                                                                                
The fund is proposed to be  capitalized at $5 million with a loan                                                               
limit of  $100,000. The term would  be 15 years and  the interest                                                               
rate may not  exceed prime-plus two; it has a  floor of 3 percent                                                               
and a ceiling of 10.5 percent.                                                                                                  
                                                                                                                                
1:48:25 PM                                                                                                                    
MS. AYERS  moved on  to the Mariculture  Revolving Loan  Fund and                                                               
said there are currently 67 permitted  farms in Alaska with 25 of                                                               
them  producing. There  is potential  for  growth, but  obviously                                                               
some of the 45 initial farms  might prove to be the borrowers for                                                               
this particular fund - to help move them into productive status.                                                                
                                                                                                                                
She  said  that  mariculture  is a  relatively  new  industry  in                                                               
Alaska,  but it's  highly regulated  through ADF&G's  Division of                                                               
Commercial  Fisheries,  DNR's  Aquatic Farm  Lease  Program,  and                                                               
DEC's  Food Safety  and Sanitation  Program  with shellfish,  and                                                               
issues  within the  Alaska Coastal  Management  Program that  may                                                               
come into play with mariculture development.                                                                                    
                                                                                                                                
Since  1990  they have  had  records  for productive  farms,  and                                                               
complete data  for the most recent  of 2009. The farm  gate value                                                               
was $473,000.  Anecdotally, some dozen  years or so  ago, British                                                               
Columbia  started actively  trying to  develop their  mariculture                                                               
industry and  they were at roughly  the same level. Now  they are                                                               
at a multi-million dollar industry.                                                                                             
                                                                                                                                
1:50:00 PM                                                                                                                    
One other requirement of the  Mariculture Loan Fund is a training                                                               
requirement at the request of  the industry. A number of training                                                               
resources are available:                                                                                                        
-through the University Alaska Sea Grant Marine Advisory Program                                                                
-other  collaborative research  and  resources available  through                                                               
other   branches  of   the  University   including  the   Fishery                                                               
Industrial Technology Center                                                                                                    
-the Alaska  Shellfish Growers Association  has had an  EDA grant                                                               
to  write  a  best  management   practices  for  the  mariculture                                                               
industry.                                                                                                                       
                                                                                                                                
Their loan  officers will work  potential borrowers  to determine                                                               
their  experience in  other areas  that would  bring transferable                                                               
skills - like time on the water.                                                                                                
                                                                                                                                
The  loan features  are proposed  capitalization  of $3  million,                                                               
loan limits of $100,000, terms for  20 years and interest may not                                                               
exceed prime plus one; the floor  is 5 percent and the ceiling is                                                               
9 percent. This has a  special feature which is delayed repayment                                                               
and accrual. So,  a loan for 20  years at the option  of the loan                                                               
officer  they  may  approve  a   delayed  repayment  and  accrual                                                               
schedule in the first six years.  This is proposed because of the                                                               
unique needs of  the mariculture industry. When  you are starting                                                               
a farm it could be a minimum  of probably three to four years and                                                               
sometimes as long as six years  to develop a product and create a                                                               
revenue stream. The critical piece is you may be writing a 20-                                                                  
year loan  but the amortization  happens from  year 17 or  20. So                                                               
they will have larger over the end of the life of that loan.                                                                    
                                                                                                                                
1:52:43 PM                                                                                                                    
SENATOR PASKVAN asked  if interest is deferred  and/or accrued if                                                               
there is a delay.                                                                                                               
                                                                                                                                
MS. AYERS  answered there  are going  to be  both options  and it                                                               
will depend  on the  borrower. She  said SB  67 mirrors  what the                                                               
governor  introduced last  year,  and they  feel  there is  wide-                                                               
spread support.                                                                                                                 
                                                                                                                                
SENATOR  MENARD  said she  struggles  with  the initial  six-year                                                               
period  of delay.  Many businesses  want to  be part  of a  small                                                               
business loan program,  and delaying six years  almost becomes an                                                               
attitude of  how diligent one has  to be. She wanted  to see that                                                               
shortened. Talk me out of that.                                                                                                 
                                                                                                                                
MS.  AYERS  answered with  probably  members  of the  mariculture                                                               
industry  could best  speak to  that particular  issue, but  with                                                               
regard  to  lending  practices,  they  have  very  savvy  lending                                                               
officers who have worked predominantly  in the commercial fishing                                                               
industry   and   worked   with  borrowers   with   a   range   of                                                               
circumstances.  One of  the reasons  that public  financing works                                                               
with  regard to  riskier  enterprises is  because  they have  the                                                               
capacity  to be  patient. The  vast majority  of loans  portfolio                                                               
dollar-wise is  in the commercial fishing  industry. Many private                                                               
lenders,  not  because   of  the  lack  of   compassion  for  the                                                               
commercial  fishing   industry,  but   because  of   the  lending                                                               
practices they are  subject to would have written  off loans that                                                               
the  department had  "waited out  with the  industry" and  proved                                                               
they could be collected. She  suspected what they know going into                                                               
the mariculture  industry that that  is their business  model and                                                               
therefore, their loan fund is structured on it.                                                                                 
                                                                                                                                
SENATOR MENARD  said she  was correlating it  to the  school loan                                                               
model.                                                                                                                          
                                                                                                                                
SENATOR PASKVAN asked what it means  that they can wait it out in                                                               
terms of the default rate.                                                                                                      
                                                                                                                                
MS. AYERS  replied their  lending and  collections staff  is very                                                               
experienced  especially in  the  commercial  fishing area.  Their                                                               
annualized  default rate  for  last year  was  0.6 percent.  They                                                               
would  anticipate a  certain level  of default  within each  loan                                                               
fund.  For  instance,  their  existing  small  business  economic                                                               
development  fund's   annual  default   rate  was   4.5  percent;                                                               
nationally, SBA  microloans are at 4.8  percent. Her department's                                                               
performance is as  good as or better than what  would be expected                                                               
particularly  given the  fact that  they have  a risky  portfolio                                                               
that  is heavily  weighted in  an industry  that typically  isn't                                                               
considered by private lenders.                                                                                                  
                                                                                                                                
SENATOR GIESSEL asked  if the halibut permit language  on page 3,                                                               
lines 21-27, was what they were  relying on to bring permits back                                                               
to Alaska.                                                                                                                      
                                                                                                                                
MS. AYERS  replied yes, particularly in  area 2C that has  a very                                                               
high non-resident operator  rate in the charter  industry; it was                                                               
lower in 3A. They are  interested in increasing economic benefits                                                               
to Alaskans and that is their threshold.                                                                                        
                                                                                                                                
SENATOR GIESSEL  asked if an  individual gets one of  these loans                                                               
and then moves out of the state, what happens.                                                                                  
                                                                                                                                
MS.  AYERS answered  there would  be a  number of  constitutional                                                               
issues,  but  the department  has  some  good borrower  incentive                                                               
programs to  pay on time.  They are looking  at what can  be done                                                               
for  any  loan fund  if  a  borrower  becomes a  non-resident  to                                                               
rescind  those incentives,  especially  with  the revolving  loan                                                               
fund.                                                                                                                           
                                                                                                                                
2:00:59 PM                                                                                                                    
SENATOR  PASKVAN  asked  if  there  is  any  comparable  security                                                               
interest that  is attached to the  license itself, so if  it goes                                                               
into bankruptcy the state has a claim on it.                                                                                    
                                                                                                                                
MS.  AYERS answered  this permit  is  issued by  NOAA, a  federal                                                               
agency; so the  department is hampered by how  they interpret the                                                               
UCC  and whether  or  not a  lien could  be  perfected against  a                                                               
particular permit  or asset.  While they  are continuing  to work                                                               
with them on this issue, the easiest answer now is no.                                                                          
                                                                                                                                
SENATOR PASKVAN  commented the  reason he brought  that up  is in                                                               
the area  of liquor licenses  a transferor can retain  a security                                                               
interest  to the  exclusion of  others.  And this  is a  transfer                                                               
process.                                                                                                                        
                                                                                                                                
SENATOR  MENARD  asked  if  these loans  are  available  to  fish                                                               
farmers like "Frankenfish?"                                                                                                     
                                                                                                                                
MS.  AYERS  answered no;  the  eligible  purposes are  shellfish,                                                               
echinoderms, seaweeds and algae.                                                                                                
                                                                                                                                
SENATOR  PASKVAN referred  to  (b)(1)  on page  1  and noted  the                                                               
absence of  the term "grant",  and asked  if that was  a drafting                                                               
issue.                                                                                                                          
                                                                                                                                
MS. AYERS answered yes, and a  CS would be forthcoming to correct                                                               
that error.                                                                                                                     
                                                                                                                                
2:04:32 PM                                                                                                                    
RUSSELL DICK,  President and  CEO, Haa  Aani, LLC,  subsidiary of                                                               
Sealaska Corporation,  said they  supported SB  67. He  said they                                                               
applaud the  administration's effort to address  impediments they                                                               
see to economic development in  their rural communities. Haa Aani                                                               
was  created  by Sealaska  Corporation  to  address very  fragile                                                               
economic  social  conditions  in rural  communities,  communities                                                               
they represent.  It's not about  owning businesses on  a regional                                                               
scale, but about  fostering individual entrepreneurial activities                                                               
in  these   communities  that  normally  have   impediment  after                                                               
impediment to  economic development.  Their view  is that  is the                                                               
only  way these  communities  can be  sustainable  over the  long                                                               
term.  Each item  in  SB  67 that  removes  access to  affordable                                                               
capital is crucial.                                                                                                             
                                                                                                                                
For  the   last  couple  of   years  they  have   seen  shellfish                                                               
mariculture as  an opportunity. They have  invested a significant                                                               
amount   of  capital   into  developing   mariculture  in   these                                                               
communities.  They  have  actually purchased  infrastructure  and                                                               
provided seed  to local growers.  Two areas they have  focused on                                                               
initially are Kake and Yakutat  and they are doing extremely well                                                               
today. They have  two new small business oyster  farms in Yakutat                                                               
and a  partnership in Kake,  which again provides oyster  seed to                                                               
entrepreneurs and some  vital on the job  training and experience                                                               
to build up  their credibility within this industry.  As a result                                                               
of  the success  thus  far  they are  looking  at expanding  this                                                               
program into other rural communities in Southeast Alaska.                                                                       
                                                                                                                                
SB 67  is very important  to apprentice growers because  Haa Aani                                                               
doesn't  plan on  continuing to  invest a  significant amount  of                                                               
capital going forward.  If SB 67 passes  these apprentice growers                                                               
will easily qualify for the types of loans in it.                                                                               
                                                                                                                                
With regards  to the eligibility  requirements in the  six years,                                                               
they see a new grower  need capital infrastructure that will cost                                                               
a  new grower  over  $120,000 and  operating expenses  associated                                                               
with that, living  wages, and permit impediments; it  all adds up                                                               
over time.  It's harder  for a  rural resident to  try to  get in                                                               
this business because its three  years before even one oyster can                                                               
be sold. It  makes sense to give  them six years to  get to scale                                                               
where they  are able to  support themselves  as well as  meet the                                                               
covenants of these loans.                                                                                                       
                                                                                                                                
SENATOR PASKVAN  asked his definition  of "apprentice  grower" as                                                               
opposed to "grower."                                                                                                            
                                                                                                                                
MR. DICK  answered their  view is that  an apprentice  grower who                                                               
someone who  has come in the  door and said they've  taken a look                                                               
at this  industry and is  willing to get  into it. He  commits to                                                               
the training  and learning; it's  from that point until  they are                                                               
ready to go out on their own.                                                                                                   
                                                                                                                                
2:10:25 PM                                                                                                                    
ROGER PAINTER, President,  Alaskan Shellfish Growers Association,                                                               
said  he has  been an  oyster grower  for the  past 25  years. He                                                               
thanked the  governor and the  administration for SB 67.  This is                                                               
the most significant effort in  advancing small businesses he has                                                               
seen the state put forward.                                                                                                     
                                                                                                                                
He said  he submitted a letter  dated February 4 that  covers the                                                               
legislation  and two  position papers,  one called  "The Economic                                                               
Development  Tool" and  the other  that addresses  the terms  and                                                               
needs  for the  loans  in  depth. He  said  the  first paper  has                                                               
population figures  for coastal  Alaska, and if  you go  down the                                                               
list they can  see why people are real concerned  about trying to                                                               
create jobs in this region.                                                                                                     
                                                                                                                                
He said,  "When you lose  half of your  population or more  in 35                                                               
years,  that's   an  economic  and   social  crisis,"   and  this                                                               
legislation goes a  long way in addressing  those. It's important                                                               
to  recognize  how  much  support   there  is  in  the  Region  4                                                               
mariculture  development.  The  association  has  identified  the                                                               
tremendous front-end  costs and effort involved  in getting these                                                               
small businesses off  the ground before revenues come  in has the                                                               
greatest impediment.                                                                                                            
                                                                                                                                
MR. PAINTER explained  that it takes about a year  to get permits                                                               
for a  "farm" and  then it  will take  3-4 years  to get  a first                                                               
crop, and  another 1-2  years before  revenues are  solid. During                                                               
this  time significant  expenses are  incurred (addressed  in the                                                               
second position paper  on terms and deferrals).  He stressed that                                                               
not only  is the  business owner  facing these  costs, he  is not                                                               
getting any  income. Even once the  income starts it will  take a                                                               
while to  make up loss  of income for  those lost years.  So, the                                                               
interest and payment deferrals are  a very important component is                                                               
of  this legislation.  He  informed them  that  these terms  were                                                               
patterned after  the state's existing private  salmon aquaculture                                                               
loan  program where  the state's  patience  was greatly  rewarded                                                               
with the economic contributions  (about $400 million annually) of                                                               
the private salmon enhancement program.                                                                                         
                                                                                                                                
He stressed the  goal is to create businesses that  will still be                                                               
here  200 years  from  now. Many  oyster farms  in  the state  of                                                               
Washington have been in business  for 200-300 years; that is what                                                               
they are trying to foster here.                                                                                                 
                                                                                                                                
2:16:34 PM                                                                                                                    
MARK   STEARNS,   Chairman,    Alaska   Manufacturing   Extension                                                               
Partnership,  Inc., said  they  are  a quasi-private  partnership                                                               
with the federal and state  governments, and that they had gotten                                                               
strong support  from the State  of Alaska which  they appreciate.                                                               
He remarked that it is a  bit out of their normal experience with                                                               
the  state  to  have  people  that are  so  focused  on  actually                                                               
promoting business development  and can see the  needs that small                                                               
business owners actually have. Small  business is the backbone of                                                               
the US  economy and an  important component of  Alaska's economy,                                                               
but they often get lost in  the shuffle because they don't have a                                                               
collective voice  to press their need.  This would go a  long way                                                               
to help businesses  that struggle from time to time.  He has seen                                                               
instances in the  last few years where good  sound business ideas                                                               
maybe outside the normal criteria  that are required to establish                                                               
a loan were basically dismissed.                                                                                                
                                                                                                                                
2:21:29 PM                                                                                                                    
JOHN THIEDE, Aquatic Farm Program  Manager, Department of Natural                                                               
Resources (DNR), said he was available to answer questions.                                                                     
                                                                                                                                
SENATOR GIESSEL  said a banking  executive in a  previous meeting                                                               
wanted  a turn-down  provision and  she  didn't see  that in  the                                                               
bill.                                                                                                                           
                                                                                                                                
MR. THAYER replied they are  working with the banking industry on                                                               
that  subject. Some  Anchorage bankers  didn't  want a  turn-down                                                               
provision because it would create  non-revenue work for them with                                                               
customers coming  in to get  a turn down  just so they  can apply                                                               
for a  loan. However, after this  testimony they will go  back to                                                               
the Banker's  Association, and they  might see  that incorporated                                                               
in a committee substitute (CS).                                                                                                 
                                                                                                                                
2:23:45 PM                                                                                                                    
SENATOR MENARD said  conceivably the argument could  be made that                                                               
a bank could get inundated because  people want to get in quickly                                                               
and get refused. However, it's  possible that the bank could make                                                               
them a better loan than this proposed legislation would.                                                                        
                                                                                                                                
MR. THAYER  replied that is  a possibility and that  is something                                                               
their loan  officers will look at  when they evaluate a  loan. He                                                               
is willing  to discuss with  industry what  is best for  them. He                                                               
said, "The Division of Economic  Development by no means wants to                                                               
compete with  the private  sector." They are  trying to  find the                                                               
middle ground where it's not  quite commercially viable yet it is                                                               
something that will benefit the small businesses in Alaska.                                                                     
                                                                                                                                
2:26:14 PM                                                                                                                    
THYES  SHAUB,  Alaska  Bankers   Association,  said  a  week  ago                                                               
interest was expressed  by the association in having  a turn down                                                               
provision. That  got reinforced  today, but  they don't  want the                                                               
turn down to be perfunctory.                                                                                                    
                                                                                                                                
She  said the  Alaskan  banking industry  is  very interested  in                                                               
loaning  to small  business. "They  want  people to  come in  and                                                               
apply  for a  loan; not  just say  give me  a letter..."  Not all                                                               
businesses  will qualify,  especially  start-ups, so  it will  be                                                               
good to have an alternative for them to go to.                                                                                  
                                                                                                                                
MS. SHAUB  said Last year  members disagreed and  the association                                                               
was  neutral  on this  issue,  but  they  are getting  closer  to                                                               
supporting  the  idea. She  noted  the  association will  have  a                                                               
change of presidents and that  Joe Beadle had been nominated. She                                                               
knows  he has  a good  association  with the  department and  she                                                               
hoped that would help the  association move toward support of the                                                               
bill instead of just a neutral position.                                                                                        
                                                                                                                                
2:28:26 PM                                                                                                                    
SENATOR PASKVAN asked what kind  of schedule they should consider                                                               
for the association's approval.                                                                                                 
                                                                                                                                
MS. SHAUB  answered they  are working  with the  DCCED to  see if                                                               
they can  get something similar  to Senator  Wielechowski's bill.                                                               
She  said  small  business  is  very  important  to  the  banking                                                               
industry; it's  important for  the whole  state. The  industry is                                                               
interested in things that help  small business, but they want the                                                               
first bite of the apple. They're in business.                                                                                   
                                                                                                                                
SENATOR MENARD  commented if  the turn down  provision is  in the                                                               
legislation,  perhaps  a person  could  get  introduced to  other                                                               
banking  services like  starting a  savings account  or buying  a                                                               
treasury bond.  There are opportunities for  the banking industry                                                               
even though  a person  walks through the  door just  wanting this                                                               
turn down.                                                                                                                      
                                                                                                                                
2:30:25 PM                                                                                                                    
MS. AYERS  amplified on  that idea saying  their goal  in seeding                                                               
new businesses  is that  these will  become customers  for future                                                               
loans and  financial services with private  lenders. They already                                                               
have  a partnership  with private  lending as  well as  the Small                                                               
Business Administration (SBA) and  they are trying to incorporate                                                               
USDA  loan funds  into this  as well  by giving  them the  "cheat                                                               
sheet" which is  a laminated summary of the  loan funds available                                                               
through  DCCED programs.  Private lenders  can refer  business to                                                               
the  department as  they refer  business  back to  them. "It's  a                                                               
symbiotic relationship."                                                                                                        
                                                                                                                                
CHAIR EGAN thanked everyone for their comments and held SB 67.                                                                  

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