Legislature(1993 - 1994)
03/30/1993 08:40 AM House FIN
| Audio | Topic |
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
MARCH 30, 1993
8:40 A.M.
TAPE HFC 93 - 81, Side 2, #000 - end.
TAPE HFC 93 - 82, Side 1, #000 - end.
CALL TO ORDER
Co-Chair Ron Larson called the meeting of the House Finance
Committee to order at 8:40 A.M.
PRESENT
Co-Chair Larson Representative Brown
Co-Chair MacLean Representative Foster
Vice-Chair Hanley Representative Grussendorf
Representative Hoffman Representative Therriault
Representative Navarre Representative Parnell
Representative Martin was not present for the meeting.
ALSO PRESENT
Representative Jerry Mackie; Representative Bill Williams;
Representative Fran Ulmer; Representative Brian Porter;
Geron Bruce, Special Assistant, Department of Fish and Game;
Eric Forrer, Self, Juneau, Alaska; Jerry McCune, UFA,
Cordova, Alaska; Paul Fuhs, Commissioner, Department of
Commerce and Economic Development; Kelley Sharp, Loan
Manager, Division of Investments, Department of Commerce and
Economic Development; Jay Ginter, U.S. Department of
Commerce, NOAA/NMFS, Juneau, Alaska; Juanita Hensley,
Division of Motor Vehicles, Department of Public Safety;
Gary Lewis, AML Taxation and Finance Committee; Crystal
Smith, Alaska Municipal League (AML), Juneau, Alaska; Linda
Behnken, E.D., Alaska Longline Fishermen's Association,
Sitka, Alaska (testified via teleconference).
SUMMARY INFORMATION
HB 123 An Act relating to loans for the purchase of
individual fishery quota shares.
CS HB 123 (FSH) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by the Department of Commerce and Economic
Development dated 3/05/93.
HB 179 An Act relating to motor vehicles and mobile
homes; and providing for an effective date.
1
HB 179 was held in Committee for further
discussion.
HB 191 An Act relating to cost recovery by contractors
who operate state-owned hatcheries.
HB 191 was reported out of Committee with a "do
pass" recommendation" and with a zero fiscal note
by the Department of Fish and Game dated 3/17/93.
HOUSE BILL 191
"An Act relating to cost recovery by contractors who
operate state-owned hatcheries."
REPRESENTATIVE BILL WILLIAMS testified in support of HB 191.
The legislation would address how a contractor may spend
cost recovery monies generated from a state-owned hatchery
in which that contractor operates under a contract with the
State. The bill is supported by aquaculture associations,
fishermen, and the Department of Fish and Game. He pointed
out that the bill has a zero fiscal note and indicated that
the fiscal note would help to make the transition of the
operation of the state facilities by contractors more
feasible to accomplish weaning of the hatchery operations
from the State funding.
Co-Chair MacLean asked for an explanation of "reasonable"
operating costs and questioned if they would include capital
improvements at the hatchery. Representative Williams
advised that the Board of Director submits a budget
itemizing the costs to run the facilities.
Representative Brown inquired if monies from cost recovery
would be used at other hatcheries than that from which the
cost is recovered. Representative Williams stated that HB
191 will enable funding of the Gulkana Hatchery with Main
Bay Hatchery revenue.
GERON BRUCE, SPECIAL ASSISTANT, DEPARTMENT OF FISH AND GAME,
stated the Gulkana Hatchery is being operated by the State
using program receipts provided by the Prince William Sound
Aquaculture Association. The FY 94 budget proposal would
turn the facility over to a private firm. The Board of
Directors of each hatchery can limit the cost of each
facility in order that there may be surplus fish to harvest
by the users. The Department of Commerce and Economic
Development exercises the authority to determine how those
funds are spent. Representative Brown stated that
"reasonable" costs vary a lot.
2
Co-Chair MacLean noted her concern in allowing a contractor
to use State money for private operations. Representative
Williams replied that the State money is to be used for
State owned and operated hatcheries. The State owned
hatcheries sometimes do not receive the cost recovery money
back.
Co-Chair MacLean asked what the profits from the Aquaculture
Corporation are used for. Mr. Geron replied, they are a
non-profit organization which does not make profit. The
Department of Commerce and Economic Development allows them
to build a reserve fund to cushion for catastrophic failure.
Excess fish provides an opening of the commercial area for
other fishermen.
Representative Hanley MOVED to report HB 191 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 191 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Fish and Game dated 3/17/93.
HOUSE BILL 123
"An Act relating to loans for the purchase of
individual fishery quota shares."
REPRESENTATIVE FRAN ULMER introduced a new loan program to
help Alaska fishermen living in the coastal communities.
The U.S. Secretary of Commerce recently approved individual
Fishery Quotas (IFQ's) for the halibut and black cod
fisheries in Alaska. If all goes as planned, by mid-1994,
these fisheries will no longer be open to all those who want
to "wet a line". Instead, a new permit system will reserve
catch quotas for individual fishermen who qualify for an
IFQ. Gone will be the 24 hour openings, replaced by a
season which may last from March through November. The new
system is promoted as a solution to dangerous conditions
created by derby style fishing.
HB 123 provides financing for the purchase of IFQ's. The
legislation authorizes loans of up to $300 thousand dollars
for IFQ's to Alaska residents who have actively participated
in the fishery during three of the last five years. She
noted that the State currently finances the purchase of
limited entry permits through a revolving loan fund with
loans of up to $300 thousand dollars. The new legislation
will expand the loan program to include IFQ's.
ERIC FORRER, SELF, JUNEAU, ALASKA, spoke in support of HB
3
123. He added that the IFQ program would be good for the
Alaskan coastal communities and it would allow Alaskan
fishermen to retain the quota share which they were given.
PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC
DEVELOPMENT, spoke in support of the legislation. HB 123
amends the Commercial Fishing Loan Program to allow Alaskan
residents to finance the purchase of individual fishery
quota shares. In order to be eligible, an applicant must:
1. Have been a two-year resident;
2. Have had a crew member or commercial fishing
license for the year immediately preceding the
date of application and any other two of the past
five years;
3. Have actively participated in the fishery for
which the shares are issued during three of the
last five years;
4. Qualify as a transferee under applicable law.
HB 123 also allows the Department to prequalify applicants
for the purchase of fishery quota shares. Under this
portion of the program, an applicant can obtain a 60-day
commitment to finance fishery quota shares prior to locating
the specific shares to be purchased. The bill would
establish a $300 thousand dollars ceiling that a borrower
can have outstanding at any point used in purchasing fishery
quota shares.
KELLEY SHARP, LOAN MANAGER, DIVISION OF INVESTMENTS,
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, noted that
the Division of Investments will be administering the
legislation if it is passed. The legislation would
represent an expansion of the program to promote a
predominately resident fishery. There is a fiscal impact
with the legislation.
JAY GINTER, U.S. DEPARTMENT OF COMMERCE, NOAA/NMFS, JUNEAU,
ALASKA, stated that the National Marine Fishery Service is
neutral on the legislation. He noted that the Secretary of
Commerce did approve the IFQ program for sable fish and
halibut, but added that the IFQ program is complex.
Representative Hanley questioned if the quotas would be
"lien-able". Mr. Ginter thought they would.
JERRY MCCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA,
CORDOVA, ALASKA, pointed out that the United Fishermen of
Alaska support the proposed legislation as it will allow
4
Alaskans a chance to be a part of a future with a larger
vision fishing program.
LINDA, BEHNKEN, E.D., ALASKA LONGLINE FISHERMEN'S
ASSOCIATION, SITKA, ALASKA, (testified via teleconference),
spoke in support of the legislation. [Attachment #1]. She
noted that the legislation would provide opportunities for
the entire State.
(Tape Change, HFC 93-82, Side 1).
Representative Hanley expressed his concern with the State
becoming involved in assuming bank interest on the quota
shares. In particular, with the concept of the State
lending to those persons who can not qualify for a bank
loan. Representative Ulmer stressed that the funds will
only be lent to the "small guys" who would not have enough
collateral to receive a loan from a bank. She added that
once the IFQ is purchased, at that time they would then
become eligible to qualify for the CDQ program.
Representative Parnell questioned the residency requirements
to participate in the program. Representative Ulmer stated
it would be two years, the same as the existing permits.
Representative Therriault strongly urged the State not to
become involved in the "banking" business. Representative
Ulmer stressed that if the legislation is not passed, the
small fishermen in Alaska will become locked out of the
fisheries which will be bought out by larger out-of-state
groups, particularly in the black cod and halibut fishery.
Commissioner Fuhs warned that sixty percent of the current
shares will change hands if the legislation does not pass.
He emphasized that this fishery will greatly impair the
coastal communities in Alaska. The legislation is important
as it will lower the price of limited entry.
Representative Hanley asked the balance of the loan fund.
Commissioner Fuhs stated amount is $5 million dollars.
Representative Parnell questioned the anticipated default
rate of the proposed loans. Commissioner Fuhs reiterated
that these loans will be secured. He was assured that the
quotas will be met. Representative Hanley voiced his
concern that the Division of Investments has not developed a
relationship between the supply and the demand of such
proposed legislation.
Representative Foster MOVED to report CS HB 123 (FSH) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
5
CS HB 123 (FSH) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Commerce and Economic Development dated
3/05/93.
HOUSE BILL 179
"An Act relating to motor vehicles and mobile homes;
and providing for an effective date."
REPRESENTATIVE BRIAN PORTER testified in support of HB 179.
He stated that under current law, municipalities are given
the option of participating in a registration tax program
administered by the Division of Motor Vehicles, or electing
to levy local use taxes. Because of the difficultly in
collecting information on ownership of motor vehicles,
several Alaskan municipalities have opted to participate in
the state administered program. The program collects a tax
based on a schedule established in statute in 1978. The
Division of Motor Vehicles retains 5 percent of the tax
collected as an administrative fee and refunds the balance
to the municipality from which it was collected.
GARY LEWIS, ALASKA MUNICIPAL LEAGUE, TAXATION AND FINANCE
COMMITTEE, ALASKA, spoke in support of the legislation.
Representative Brown asked if the administrative costs would
exceed five percent.
JUANITA HENSLEY, DIRECTOR, DIVISION OF MOTOR VEHICLES,
DEPARTMENT OF PUBLIC SAFETY, noted that it would be
increased to eight percent. She added, an additional fee of
$10 would be attached to those persons not using the mail
for renewing auto registration. Representative Navarre
stated the costs to the Department would exceed eight
percent.
Co-Chair Larson provided the Committee with Amendment 1.
[Attachment #2]. No action was taken on the amendment. HB
179 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 10:05 A.M.
HOUSE FINANCE COMMITTEE
MARCH 30, 1993
8:40 A.M.
TAPE HFC 93 - 81, Side 2, #000 - end.
TAPE HFC 93 - 82, Side 1, #000 - end.
6
CALL TO ORDER
Co-Chair Ron Larson called the meeting of the House Finance
Committee to order at 8:40 A.M.
PRESENT
Co-Chair Larson Representative Brown
Co-Chair MacLean Representative Foster
Vice-Chair Hanley Representative Grussendorf
Representative Hoffman Representative Therriault
Representative Navarre Representative Parnell
Representative Martin was not present for the meeting.
ALSO PRESENT
Representative Jerry Mackie; Representative Bill Williams;
Representative Fran Ulmer; Representative Brian Porter;
Geron Bruce, Special Assistant, Department of Fish and Game;
Eric Forrer, Self, Juneau, Alaska; Jerry McCune, UFA,
Cordova, Alaska; Paul Fuhs, Commissioner, Department of
Commerce and Economic Development; Kelley Sharp, Loan
Manager, Division of Investments, Department of Commerce and
Economic Development; Jay Ginter, U.S. Department of
Commerce, NOAA/NMFS, Juneau, Alaska; Juanita Hensley,
Division of Motor Vehicles, Department of Public Safety;
Gary Lewis, AML Taxation and Finance Committee; Crystal
Smith, Alaska Municipal League (AML), Juneau, Alaska; Linda
Behnken, E.D., Alaska Longline Fishermen's Association,
Sitka, Alaska (testified via teleconference).
SUMMARY INFORMATION
HB 123 An Act relating to loans for the purchase of
individual fishery quota shares.
CS HB 123 (FSH) was reported out of Committee with
a "do pass" recommendation and with a fiscal note
by the Department of Commerce and Economic
Development dated 3/05/93.
HB 179 An Act relating to motor vehicles and mobile
homes; and providing for an effective date.
HB 179 was held in Committee for further
discussion.
HB 191 An Act relating to cost recovery by contractors
who operate state-owned hatcheries.
7
HB 191 was reported out of Committee with a "do
pass" recommendation" and with a zero fiscal note
by the Department of Fish and Game dated 3/17/93.
HOUSE BILL 191
"An Act relating to cost recovery by contractors who
operate state-owned hatcheries."
REPRESENTATIVE BILL WILLIAMS testified in support of HB 191.
The legislation would address how a contractor may spend
cost recovery monies generated from a state-owned hatchery
in which that contractor operates under a contract with the
State. The bill is supported by aquaculture associations,
fishermen, and the Department of Fish and Game. He pointed
out that the bill has a zero fiscal note and indicated that
the fiscal note would help to make the transition of the
operation of the state facilities by contractors more
feasible to accomplish weaning of the hatchery operations
from the State funding.
Co-Chair MacLean asked for an explanation of "reasonable"
operating costs and questioned if they would include capital
improvements at the hatchery. Representative Williams
advised that the Board of Director submits a budget
itemizing the costs to run the facilities.
Representative Brown inquired if monies from cost recovery
would be used at other hatcheries than that from which the
cost is recovered. Representative Williams stated that HB
191 will enable funding of the Gulkana Hatchery with Main
Bay Hatchery revenue.
GERON BRUCE, SPECIAL ASSISTANT, DEPARTMENT OF FISH AND GAME,
stated the Gulkana Hatchery is being operated by the State
using program receipts provided by the Prince William Sound
Aquaculture Association. The FY 94 budget proposal would
turn the facility over to a private firm. The Board of
Directors of each hatchery can limit the cost of each
facility in order that there may be surplus fish to harvest
by the users. The Department of Commerce and Economic
Development exercises the authority to determine how those
funds are spent. Representative Brown stated that
"reasonable" costs vary a lot.
Co-Chair MacLean noted her concern in allowing a contractor
to use State money for private operations. Representative
Williams replied that the State money is to be used for
State owned and operated hatcheries. The State owned
hatcheries sometimes do not receive the cost recovery money
back.
8
Co-Chair MacLean asked what the profits from the Aquaculture
Corporation are used for. Mr. Geron replied, they are a
non-profit organization which does not make profit. The
Department of Commerce and Economic Development allows them
to build a reserve fund to cushion for catastrophic failure.
Excess fish provides an opening of the commercial area for
other fishermen.
Representative Hanley MOVED to report HB 191 out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
HB 191 was reported out of Committee with a "do pass"
recommendation and with a zero fiscal note by the Department
of Fish and Game dated 3/17/93.
HOUSE BILL 123
"An Act relating to loans for the purchase of
individual fishery quota shares."
REPRESENTATIVE FRAN ULMER introduced a new loan program to
help Alaska fishermen living in the coastal communities.
The U.S. Secretary of Commerce recently approved individual
Fishery Quotas (IFQ's) for the halibut and black cod
fisheries in Alaska. If all goes as planned, by mid-1994,
these fisheries will no longer be open to all those who want
to "wet a line". Instead, a new permit system will reserve
catch quotas for individual fishermen who qualify for an
IFQ. Gone will be the 24 hour openings, replaced by a
season which may last from March through November. The new
system is promoted as a solution to dangerous conditions
created by derby style fishing.
HB 123 provides financing for the purchase of IFQ's. The
legislation authorizes loans of up to $300 thousand dollars
for IFQ's to Alaska residents who have actively participated
in the fishery during three of the last five years. She
noted that the State currently finances the purchase of
limited entry permits through a revolving loan fund with
loans of up to $300 thousand dollars. The new legislation
will expand the loan program to include IFQ's.
ERIC FORRER, SELF, JUNEAU, ALASKA, spoke in support of HB
123. He added that the IFQ program would be good for the
Alaskan coastal communities and it would allow Alaskan
fishermen to retain the quota share which they were given.
PAUL FUHS, COMMISSIONER, DEPARTMENT OF COMMERCE AND ECONOMIC
DEVELOPMENT, spoke in support of the legislation. HB 123
9
amends the Commercial Fishing Loan Program to allow Alaskan
residents to finance the purchase of individual fishery
quota shares. In order to be eligible, an applicant must:
1. Have been a two-year resident;
2. Have had a crew member or commercial fishing
license for the year immediately preceding the
date of application and any other two of the past
five years;
3. Have actively participated in the fishery for
which the shares are issued during three of the
last five years;
4. Qualify as a transferee under applicable law.
HB 123 also allows the Department to prequalify applicants
for the purchase of fishery quota shares. Under this
portion of the program, an applicant can obtain a 60-day
commitment to finance fishery quota shares prior to locating
the specific shares to be purchased. The bill would
establish a $300 thousand dollars ceiling that a borrower
can have outstanding at any point used in purchasing fishery
quota shares.
KELLEY SHARP, LOAN MANAGER, DIVISION OF INVESTMENTS,
DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT, noted that
the Division of Investments will be administering the
legislation if it is passed. The legislation would
represent an expansion of the program to promote a
predominately resident fishery. There is a fiscal impact
with the legislation.
JAY GINTER, U.S. DEPARTMENT OF COMMERCE, NOAA/NMFS, JUNEAU,
ALASKA, stated that the National Marine Fishery Service is
neutral on the legislation. He noted that the Secretary of
Commerce did approve the IFQ program for sable fish and
halibut, but added that the IFQ program is complex.
Representative Hanley questioned if the quotas would be
"lien-able". Mr. Ginter thought they would.
JERRY MCCUNE, PRESIDENT, UNITED FISHERMEN OF ALASKA,
CORDOVA, ALASKA, pointed out that the United Fishermen of
Alaska support the proposed legislation as it will allow
Alaskans a chance to be a part of a future with a larger
vision fishing program.
LINDA, BEHNKEN, E.D., ALASKA LONGLINE FISHERMEN'S
ASSOCIATION, SITKA, ALASKA, (testified via teleconference),
spoke in support of the legislation. [Attachment #1]. She
noted that the legislation would provide opportunities for
10
the entire State.
(Tape Change, HFC 93-82, Side 1).
Representative Hanley expressed his concern with the State
becoming involved in assuming bank interest on the quota
shares. In particular, with the concept of the State
lending to those persons who can not qualify for a bank
loan. Representative Ulmer stressed that the funds will
only be lent to the "small guys" who would not have enough
collateral to receive a loan from a bank. She added that
once the IFQ is purchased, at that time they would then
become eligible to qualify for the CDQ program.
Representative Parnell questioned the residency requirements
to participate in the program. Representative Ulmer stated
it would be two years, the same as the existing permits.
Representative Therriault strongly urged the State not to
become involved in the "banking" business. Representative
Ulmer stressed that if the legislation is not passed, the
small fishermen in Alaska will become locked out of the
fisheries which will be bought out by larger out-of-state
groups, particularly in the black cod and halibut fishery.
Commissioner Fuhs warned that sixty percent of the current
shares will change hands if the legislation does not pass.
He emphasized that this fishery will greatly impair the
coastal communities in Alaska. The legislation is important
as it will lower the price of limited entry.
Representative Hanley asked the balance of the loan fund.
Commissioner Fuhs stated amount is $5 million dollars.
Representative Parnell questioned the anticipated default
rate of the proposed loans. Commissioner Fuhs reiterated
that these loans will be secured. He was assured that the
quotas will be met. Representative Hanley voiced his
concern that the Division of Investments has not developed a
relationship between the supply and the demand of such
proposed legislation.
Representative Foster MOVED to report CS HB 123 (FSH) out of
Committee with individual recommendations and with the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CS HB 123 (FSH) was reported out of Committee with a "do
pass" recommendation and with a fiscal note by the
Department of Commerce and Economic Development dated
3/05/93.
HOUSE BILL 179
11
"An Act relating to motor vehicles and mobile homes;
and providing for an effective date."
REPRESENTATIVE BRIAN PORTER testified in support of HB 179.
He stated that under current law, municipalities are given
the option of participating in a registration tax program
administered by the Division of Motor Vehicles, or electing
to levy local use taxes. Because of the difficultly in
collecting information on ownership of motor vehicles,
several Alaskan municipalities have opted to participate in
the state administered program. The program collects a tax
based on a schedule established in statute in 1978. The
Division of Motor Vehicles retains 5 percent of the tax
collected as an administrative fee and refunds the balance
to the municipality from which it was collected.
GARY LEWIS, ALASKA MUNICIPAL LEAGUE, TAXATION AND FINANCE
COMMITTEE, ALASKA, spoke in support of the legislation.
Representative Brown asked if the administrative costs would
exceed five percent.
JUANITA HENSLEY, DIRECTOR, DIVISION OF MOTOR VEHICLES,
DEPARTMENT OF PUBLIC SAFETY, noted that it would be
increased to eight percent. She added, an additional fee of
$10 would be attached to those persons not using the mail
for renewing auto registration. Representative Navarre
stated the costs to the Department would exceed eight
percent.
Co-Chair Larson provided the Committee with Amendment 1.
[Attachment #2]. No action was taken on the amendment. HB
179 was HELD in Committee for further discussion.
ADJOURNMENT
The meeting adjourned at 10:05 A.M.
12
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