Legislature(1993 - 1994)
03/15/1993 03:40 PM Senate RES
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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
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.
SENATOR MILLER asked for further discussion. There was none
and he adjourned the meeting at 4:30 p.m.
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