Legislature(2013 - 2014)CAPITOL 120
04/02/2013 10:00 AM House FISHERIES
| Audio | Topic |
|---|---|
| Start | |
| HB177 | |
| Confirmation Hearing(s)|| Fisherman's Fund Advisory and Appeals Council | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 177 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
ALASKA STATE LEGISLATURE
HOUSE SPECIAL COMMITTEE ON FISHERIES
April 2, 2013
10:03 a.m.
MEMBERS PRESENT
Representative Paul Seaton, Chair
Representative Eric Feige
Representative Lynn Gattis
Representative Bob Herron
Representative Jonathan Kreiss-Tomkins
MEMBERS ABSENT
Representative Craig Johnson
Representative Kurt Olson
COMMITTEE CALENDAR
HOUSE BILL NO. 177
"An Act relating to interest rates on loans from the commercial
fishing revolving loan fund and the community quota entity
revolving loan fund; and providing for an effective date."
- HEARD & HELD
CONFIRMATION HEARING(S)
Fisherman's Fund Advisory and Appeals Council
Don Stiles - Nome
Mark Saldi - Skagway
- CONFIRMATION(S) ADVANCED
PREVIOUS COMMITTEE ACTION
BILL: HB 177
SHORT TITLE: COMMERCIAL FISHING LOANS
SPONSOR(s): REPRESENTATIVE(s) EDGMON
03/20/13 (H) READ THE FIRST TIME - REFERRALS
03/20/13 (H) FSH, FIN
04/02/13 (H) FSH AT 10:00 AM CAPITOL 120
WITNESS REGISTER
TIM CLARK, Staff
Representative Bryce Edgmon
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 177 on behalf of
Representative Edgmon, sponsor.
LORENE PALMER, Director
Division of Economic Development
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Testified in official support of HB 177.
CATHY JEANS, Division Operations Manager
Financing Section
Division of Economic Development
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Responded to questions, during the hearing
on HB 177.
JIM ANDERSEN, Lending Collection Manager
Financing Section
Division of Economic Development
Department of Commerce, Community & Economic Development (DCCED)
Juneau, Alaska
POSITION STATEMENT: Responded to questions, during the hearing
on HB 177.
DON STILES, Appointee
Fisherman's Fund Advisory and Appeals Council
Nome, Alaska
POSITION STATEMENT: Responded to questions as appointee to the
Fisherman's Fund Advisory and Appeals Council.
MARK SALDI, Appointee
Fisherman's Fund Advisory and Appeals Council
Nome, Alaska
POSITION STATEMENT: Responded to questions as appointee to the
Fisherman's Fund Advisory and Appeals Council.
GERALD McCUNE, Lobbyist
Cordova District Fishermen United
Cordova, Alaska
POSITION STATEMENT: Testified with support for both appointees
to the Fisherman's Fund Advisory and Appeals Council.
CLAY BEZENEK, Member
Fisherman's Fund Advisory and Appeals Council
Member, Southeast Alaska Regional Dive Fisheries Association
Ketchikan, Alaska
POSITION STATEMENT: Testified with support for both appointees
to the Fisherman's Fund Advisory and Appeals Council.
ACTION NARRATIVE
10:03:03 AM
CHAIR PAUL SEATON called the House Special Committee on
Fisheries meeting to order at 10:03 a.m. Present at the call to
order were Representatives Seaton, Kreiss-Tomkins, Feige and
Gattis; Representative Herron arrived as the meeting was in
progress.
HB 177-COMMERCIAL FISHING LOANS
10:03:28 AM
CHAIR SEATON announced that the first order of business would be
HOUSE BILL NO. 177, "An Act relating to interest rates on loans
from the commercial fishing revolving loan fund and the
community quota entity revolving loan fund; and providing for an
effective date."
10:04:09 AM
TIM CLARK, Staff, Representative Bryce Edgmon, Alaska State
Legislature, presented HB 177, paraphrasing from a prepared
statement, which read as follows [original punctuation
provided]:
HB 177 restores the division of Economic Development's
ability to offer incentivizing interest rates for
important loan programs within the Commercial Fishing
Loan Fund.
The Department of Commerce proposed this legislation
to Representative Edgmon because its authority to
offer incentivizing loan terms has been so important
to its mission to foster economic development in
Alaska.
Since 1973, the Commercial Fishing Loan Fund has been
a cornerstone in the state's effort to increase
Alaskan ownership of Alaskan fisheries.
It encourages development of predominately resident
fisheries by enabling more Alaskan fishers to make
substantial investments in the efficiency and
profitability of their businesses.
Product Quality Improvement and Engine Fuel Efficiency
loans are among the most effective offerings in the
loan fund for boosting the competitiveness of Alaskan
fishing operations.
Upgrading vessels and gear to enhance product quality
can dramatically increase the value of one's catch.
Repowering a vessel with fuel efficient propulsion and
generator engines can save a business tens of
thousands of dollars each year.
HB 177 will once again allow the department to offer
such loans at two percent below the prime rate-with a
floor of three percent - in order to encourage more
Alaskan fishers to make substantial investments in the
efficiency and profitability of their businesses.
In doing so, the department will help to increase the
vitality of Alaskan businesses and strengthen one of
the state's most important industries.
10:06:34 AM
CHAIR SEATON asked whether the loan interest percentages relate
to other loan options established under the Commercial Fishing
Loan Fund.
MR. CLARK said the three percent floor was set by the Division
of Economic Development at a time of low market interest rates,
to ensure a profitable and healthy revolving loan fund.
10:07:55 AM
MR. CLARK presented the sectional analysis, paraphrasing from a
prepared statement, which read [original punctuation provided]:
Section 1 amends AS 16.20.320(a) to allow the
department to make loans from the Commercial Fishing
Revolving Loan Fund at interest rates not exceeding
the prime rate plus two percentage points and also not
exceeding 10 ½ percent. New language in this section
also stipulates that the department cannot make loans
that bear interest at less than 3 percent.
Section 2 deletes language from AS 16.10.320(j) that
pertains to the revolving status of the Community
Quota Entity Revolving Loan Fund. This language is no
longer necessary because the bill introduces more
complete language addressing the CQE Fund's revolving
status in Section 6.
Section 3 amends AS 16.10.320(l) to specify certain
terms for Community Quota Entity program loans. Loans
may not bear interest exceeding the prime rate plus
two percentage points and also not exceeding 10 ½
percent. Also, this section states that loans may not
bear interest at a rate that is less than the costs of
funds to the state or at a rate that is less than
three percent.
Section 4 amends AS 16.10.320(m) to make this
subsection apply only to AS 16.10.320(l), which refers
to the Community Quota Entity loan program. Subsection
(m) defines "cost of funds," which plays a part in
loan terms in the CQE loan program.
Section 5 amends AS 16.10.320 to add a new subsection
that sets allowable interest rates for Section A and
Section B loans for Product Quality Improvement and
Engine Fuel Efficiency. Interest rates for these loans
cannot exceed the prime rate minus two percent.
However, they cannot be lower than three percent. Nor
can the rates exceed 10 ½ percent.
Section 6 adds a new subsection to AS 16.10.345 that
describes what the Community Quota Entity Revolving
Loan Fund consists of and also ensures that it is a
fully revolving fund. In particular, this language
establishes that income earned on investments of the
fund roll back into the fund - a feature that is
absent in current statute. This section also allows
monies in the fund to be used for administering the
CQE loan program (in the same way that CFRLF earnings
can be used to pay for its programs' administrative
costs).
Section 7 gives the legislation an immediate effective
date.
10:12:20 AM
LORENE PALMER, Director, Division of Economic Development,
Department of Commerce, Community & Economic Development
(DCCED), stated official support for HB 177 and offered to
respond to questions.
10:12:59 AM
CHAIR SEATON asked how many loan applications the division
receives on an annual basis.
MS. PALMER directed attention to the committee packet, and
pointed out the division report, which indicate the fund
history, [titled "Product Quality Improvement Loans as of March
6, 2013"].
10:14:38 AM
REPRESENTATIVE FEIGE asked about the loan default rate.
MS. PALMER answered that the overall default rate is about 1.4
percent; very low.
10:14:56 AM
REPRESENTATIVE HERRON referred to the committee packet and the
document titled "Monies Transferred From the CFRLF to Fund the
Alaska Department of Fish & Game Operating Budget (ADF&G)," to
ask what type of operations the $10 million has funded at ADF&G.
CATHY JEANS, Division Operations Manager, Financing Section,
Division of Economic Development, Department of Commerce,
Community & Economic Development (DCCED), offered to provide the
information to the committee.
REPRESENTATIVE FEIGE referred to the committee handout
illustrating the web page and suggested that the fund may be
competing with the private lending sector.
MS. PALMER said the program serves a high risk market, and
provides loan accessibility to those who might otherwise have
difficulty obtaining commercial loans.
10:18:38 AM
REPRESENTATIVE FEIGE noted that the program requirements,
depicted on the web page handout, do not include turn-down
information.
MS. PALMER explained that the web site provides an overview for
application eligibility, but the actual loan process requires an
in-depth disclosure.
CHAIR SEATON suggested that the department provide further
details of the application process.
REPRESENTATIVE FEIGE asked if there is a requirement that the
applicant have been turned down by a commercial banking
establishment, in order to be eligible for a state loan.
10:19:45 AM
JIM ANDERSEN, Lending Collection Manager, Financing Section,
Division of Economic Development, Department of Commerce,
Community & Economic Development (DCCED), said statute requires
that the successful applicant will have been denied for a
similar loan by a recognized lender.
10:20:32 AM
CHAIR SEATON opened public testimony, and seeing none, announced
HB 177 would be held in committee for further consideration.
^CONFIRMATION HEARING(S)
^Fisherman's Fund Advisory and Appeals Council
CONFIRMATION HEARING(S):
Fisherman's Fund Advisory and Appeals Council
10:21:03 AM
CHAIR SEATON announced that the committee would now turn its
attention to the confirmation hearing for the appointments to
the Fisherman's Fund Advisory and Appeals Council.
10:21:23 AM
DON STILES, Appointee, Fisherman's Fund Advisory and Appeals
Council, offered a brief biography, as provided in the committee
packet, and said work and community commitments will not
interfere with his work on the council.
10:23:14 AM
REPRESENTATIVE FEIGE noted that the appointee has worked as a
fisheries specialist in the Fisheries Department of Kawarek
Incorporated and asked for further details of Mr. Stiles fishing
history.
MR. STILES established that Kawarek Incorporated is a non-profit
Native organization, and said he began commercial fishing for
salmon as a young boy on the Unalakleet and Yukon rivers, and in
Norton Sound. Currently he fishes Norton Sound for crab and
halibut as a participant in the local community development
quota (CDQ) program.
REPRESENTATIVE FEIGE made a motion to advance the confirmation
of Donald Stiles to the Fisherman's Fund Advisory and Appeals
Council, to the joint session for consideration. There being no
objection, the confirmation was advanced.
10:25:26 AM
MARK SALDI, Appointee, Fisherman's Fund Advisory and Appeals
Council, offered a brief biography as provided in the committee
packet, and said having fished Southeast Alaska, for 34 years,
he currently holds five limited entry permits. He reported that
the five years of service on the council has been an enjoyable
experience, which he would like to continue.
CHAIR SEATON opened public testimony.
10:27:25 AM
GERALD McCUNE, Lobbyist, Cordova District Fishermen United,
noted that the Fisherman's Fund is the only dedicated fund begun
prior to statehood. The council meetings are often ill
attended, he reported, and stated support for both appointees.
10:29:04 AM
CLAY BEZENEK, Member, Southeast Alaska Regional Dive Fisheries
Association, voiced support for both appointees and said as a
council member he has enjoyed working with the two gentlemen at
past meetings. Additionally, he said it has been important to
have Don Stiles as a member representing the northwestern area.
The council only meets twice a year but provides an important
financial service to fishermen.
CHAIR SEATON closed public testimony.
10:31:35 AM
REPRESENTATIVE FEIGE made a motion to advance the confirmation
of Mark Saldi to the Fishermen's Fund Advisory and Appeals
Council, to the joint session for consideration. There being no
objection, the confirmation was advanced.
CHAIR SEATON CHAIR SEATON reminded members that signing the
report regarding appointment to the council in no way reflects
individual members' approval or disapproval of the appointee,
and that the nomination is merely forwarded to the full
legislature for confirmation or rejection.
10:32:04 AM
ADJOURNMENT
There being no further business before the committee, the House
Special Committee on Fisheries meeting was adjourned at 10:32
a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 177.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 Blank CS.PDF |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 Changes in CSHB177(FSH).pdf |
HFSH 4/2/2013 10:00:00 AM |
HB 177 |
| HB 177 Sectional Summary.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 Sponsor Statement.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 CSHB177(FSH) Sectional Summary.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 CFRLF Historical Information.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 CFRLF Overview with Example Programs.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 Current and HB177 Interest Rates.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| HB 177 Product Quality and Engine Efficiency Loans Through 3.6.13.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| Fishermen's Fund - Stiles #3.pdf |
HFSH 4/2/2013 10:00:00 AM |
Fisherman's Fund |
| Fishermen's Fund - Saldi #3.pdf |
HFSH 4/2/2013 10:00:00 AM |
Fisherman's Fund |
| Mark Saldi Fishermen's Fund 1 30 13.doc |
HFSH 4/2/2013 10:00:00 AM |
Fisherman's Fund |
| UFA SUPPORT HB 177 Revolving Loan Fund 4.1.2013.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |
| House Special Committee on Fisheries.pdf |
HFSH 4/2/2013 10:00:00 AM HFSH 2/4/2014 10:00:00 AM |
HB 177 |