Legislature(1993 - 1994)

03/15/1993 03:40 PM RES

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                   SENATE RESOURCES COMMITTEE                                  
                         March 15, 1993                                        
                            3:40 p.m.                                          
  MEMBERS PRESENT                                                              
  Senator Mike Miller, Chairman                                                
  Senator Loren Leman, Vice Chairman                                           
  Senator Steve Frank                                                          
  Senator Drue Pearce                                                          
  Senator Al Adams                                                             
  Senator Fred Zharoff                                                         
  MEMBERS ABSENT                                                               
  Senator Dave Donley                                                          
  OTHER MEMBERS PRESENT                                                        
  Senator Suzanne Little                                                       
  COMMITTEE CALENDAR                                                           
  SENATE BILL NO. 132                                                          
  "An Act relating  to loans  for the  purchase of  individual                 
  fishery quota shares."                                                       
  PREVIOUS SENATE COMMITTEE ACTION                                             
  SB 132 - See Resources minutes dated 3/15/93 and 3/17/93.                    
  WITNESS REGISTER                                                             
  Senator George Jacko                                                         
  State Capitol                                                                
  Juneau, Alaska 99801-1182                                                    
  POSITION STATEMENT:  Sponsor of SB 132.                                      
  Greg Winegar, Manager                                                        
  Division of Investments                                                      
  Department of Commerce and Economics                                         
  P.O. Box 34159                                                               
  Juneau, Alaska 99803-4159                                                    
  POSITION STATEMENT:  Commented on SB 132.                                    
  Senator Suzanne Little                                                       
  State Capitol                                                                
  Juneau, Alaska 99801-1182                                                    
  POSITION STATEMENT:  Commented on SB 132.                                    
  Paul Seaton                                                                  
  Homer, Alaska 99603                                                          
  POSITION STATEMENT:  Commented on SB 132.                                    
  Nancy Landes                                                                 
  P.O. Box 1952                                                                
  Seward, Alaska 99664                                                         
  POSITION STATEMENT:  Opposed SB 132.                                         
  Bryce Edgmon, Staff Assistant                                                
  Senator Jacko                                                                
  State Capitol                                                                
  Juneau, Alaska 99801-1182                                                    
  POSITION STATEMENT:  Commented on SB 132.                                    
  ACTION NARRATIVE                                                             
  TAPE 93-15, SIDE A                                                           
  Number 001                                                                   
  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                 
  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                 
  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.                                       
  SENATOR MILLER asked for further discussion.  There was none                 
  and he adjourned the meeting at 4:30 p.m.                                    

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