Legislature(1993 - 1994)
03/17/1993 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. He said they have a CS before them that adds a findings and intent section and an effective date. JERE MURRAY, Seldovia, testified that he had faxed his comments to the committee earlier in the day and would answer questions. LINDA BEHNKEN, Alaska Longline Fishermen's Association, supported SB 132 and the IFQ program. It offers a tremendous opportunity to Alaskans that the state cannot afford to miss, she said. It would allow the fishermen and coastal communities to continue to prosper and bring revenue to the state directly through raw fish tax and indirectly through enhanced economic health. She thought it was essential to have the loan program in place before IFQ's are adopted, because a significant amount of quota shares will exchange hands during the early years of the program. Number 101 NANCY LANDES, Southcentral Longline Enterprises in Seward, testified that she hadn't had time to review the proposed CS. She felt this program might be a little premature. She commented that it is hard to find the rationale behind a loan program when the state budget is being cut. She thought whether the IFQ program was legal would affect a loan program, because money could be lent and there would be no way of getting it back if the program was declared illegal. Number 153 PAUL SEATON, Homer, said he had faxed his comments to the committee. He commented that he appreciated the findings section on the new CS. He said since the IFQ plan itself says they may be revoked or modified at any time without compensation that no bank would touch them. Number 187 SENATOR LEMAN moved to adopt the CS to SB 132. There were no objections and it was so ordered. SENATOR ADAMS asked Greg Winegar, Division of Investments (Juneau Lending Branch Manager), how he would deal with people getting loans for the IFQ's and perhaps selling the shares. Mr. WINEGAR said they would record documents with Uniform Commercial Code which would perfect the state's lien position on the shares themselves. If they took other collateral, other means would be used for that. SENATOR ADAMS asked if this loan program would fall under the Commercial Fishing Loan Fund and its guidelines. MR. WINEGAR said that was correct. SENATOR ADAMS asked how many loans an officer normally can handle. MR. WINEGAR answered that could vary quite a bit. He said their average portfolio is running about $60,000 per loan. It would depend on the size of the loans and how much funding was available. The loan officers also do collection work, extension work, etc., he explained. MR. WINEGAR said that the eligibility in SB 132 was a little different than either the A or B programs that currently exist. Number 243 SENATOR FRANK asked Mr. Winegar if he would make a loan unless he was confident that they could perfect a security interest. MR. WINEGAR said that was correct. They are having the Attorney General's office looking at this right now to be sure that is the case. Number 256 SENATOR LEMAN said Dr. Murray, in his written testimony, suggests that loans be limited to only those individuals who don't receive initial allocation of quota shares under the plan plus those that receive some initial allocation of some limit of perhaps 10,000 lbs. Was this a discriminatory practice, he asked? MR. WINEGAR said he thought it was something they could do in the eligibility section. He wasn't sure about the legality. He said they could administer it that way. The language could go in under Section C. Number 282 SENATOR JACKO said he had no problems with the CS. SENATOR MILLER stated they do have clarification from a legislative attorney regarding the question of the term "off-state" which means three miles off-shore to two hundred miles off-shore, and the term could not be construed to apply to fishing in Washington waters. SENATOR ADAMS said he didn't mind moving the bill as long as Dr. Murray's question is answered. SENATOR FRANK moved to pass CSSB 132 from committee along with the fiscal note with individual recommendations. There were no objections and it was so ordered.