Legislature(1993 - 1994)
03/15/1993 03:40 PM RES
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
SENATOR MILLER called the Resources Committee meeting to order at 3:40 p.m. and announced SB 132 LOANS FOR IFQ'S to be up for consideration. SENATOR GEORGE JACKO, sponsor of SB 132, said it would give Alaskan fishermen a chance to obtain loans to purchase IFQ's. He explained that the IFQ program hasn't been implemented, yet, however, and this is not an endorsement of it. He has correspondence from six of the CDQ organizations who support this bill. Number 60 SENATOR LEMAN asked what interest rate the revolving loan fund is charging now. SENATOR JACKO said he thought it was a variable rate. GREG WINEGAR, Department of Commerce, said the interest rate is 8%. It is basically the prime rate plus 2 at the time of the loan, and then it is a fixed rate. Number 80 SENATOR LEMAN asked what was the default rate on other fishing loans and what the anticipated rate of default would be for this program. MR. WINEGAR said the default rate for this program has been historically low, less than 1%. They anticipate a similar situation. SENATOR LITTLE asked if this bill could be made applicable to CDQ's alone so it doesn't look like the IFQ program is being endorsed. SENATOR JACKO said the focus of the legislation is to allow CDQ's to match funding with fishermen. This bill is for the individual fisherman. SENATOR LITTLE said she was not ready to give up on the IFQ issue. SENATOR JACKO said he didn't support the IFQ program, either, but he wanted our fishermen to be in a good position if it is established. Number 111 PAUL SEATON, Homer vessel owner and fisherman, said in all the testimony on the IFQ program against IFQ's there was not one serious objection against the CDQ program for Bristol Bay. An IFQ program is not necessary for CDQ's. He said the only people who will benefit from this legislation are the ones who get issued the initial quota and are willing to sell out of the fishery. He said the Alaska constitution specifically says that no exclusive right or harvest privilege of fishery shall be created or authorized in the natural waters of the state with one exception for limited access. Number 304 NANCY LANDY, Southcentral Alaska Longline Enterprise, said she is concerned that support for this legislation would be construed as support for the IFQ program. She didn't think a loan program at this time was feasible. She asked if quota shares were going to be the exclusive collateral for the federal government. She asked when this legislation would become effective. SENATOR MILLER said this bill would become active 90 days after the Governor signs it, if it were to pass the legislature. Number 370 GREG WINEGAR, Loan Manager, Department of Commerce and Economic Development, said his department administers the commercial fishing program. This bill would expand that program and the purpose is consistent with the original purpose of the program which is to create a resident fishery. He felt this bill would help Alaskans to participate in the fisheries. He would not anticipate making any loans until federal regulations had been adopted - probably some time in FY 94. SENATOR FRANK asked if they had looked at extending the 2 year residency requirement for participation in the program. MR. WINEGAR answered that the program used to have a 5-year residency requirement and a 3-year active participation requirement. The Attorney General determined that the 5- years would not hold up in court. SENATOR JACKO said he would like to see the residency requirement be 5 years, also. Number 420 SENATOR LEMAN suggested using an effective date of "when and if the IFQ program is ever adopted." Number 445 SENATOR ADAMS asked how this program would complement the current loan program and how much money would be available for IFQ's. MR. WINEGAR said currently the fund receives more money than they are loaning out. In FY 94 they anticipate a $5 million surplus over and above what they would loan out. On page 2, lines 11 and 24, why was the term "off the state" used in respect to the fisheries, SENATOR ADAMS asked. MR. WINEGAR said he didn't know how to answer that question. BRYCE EDGMON, Staff for Senator Jacko, said his interpretation was that the bill drafter was just referring to in-shore fisheries within the three mile territorial limit and off-shore would be three miles out to two hundred miles. Number 472 SENATOR ADAMS asked if the state of Washington got IFQ's, would he be able to get a loan from this program to purchase those? MR. EDGEMON said that was not possible, because the bill has criteria fishermen must meet in order to be eligible for the loan. One of them is a two year residency. Number 482 SENATOR FRANK asked if this program would affect the price of the IFQ's. He thought there might be some value in having an economic analysis of this issue. MR. WINEGAR said he was not aware of any analysis of IFQ's and how a loan program would affect the price. SENATOR JACKO thought the price might be affected to a certain degree. Number 526 SENATOR ZHAROFF noted that he had introduced SB 96 which did the same thing as SB 132, but this vehicle looked like it had a more direct route to the floor. He said if we are going to loan money to purchase IFQ's, they should try to do it in a manner that would insure that they stay within the state by using some sort of restrictions. TAPE 93-15, SIDE B Number 574 SENATOR JACKO said he didn't know if he would borrow money knowing there would be restrictions on it that might affect the viability of the business - like having to sell to certain processors, for instance. SENATOR FRANK asked Senator Zharoff what he considered an appropriate effective date. SENATOR ZHAROFF said the effective date should be upon passage of the IFQ program. He also thought that primary processing in Alaska should be required for any species that is managed under the State. Number 543 SENATOR FRANK asked Senator Jacko if he considered doing any findings in the beginning of the bill that might speak to the legislature's position on IFQ. SENATOR JACKO said he did not intend this legislation to be an endorsement of IFQ and had no problem with having findings that say that. SENATOR MILLER asked SENATOR JACKO to have his staff work with Senator Miller's staff on an effective date and decide if they would like a findings section.