CS FOR HOUSE BILL NO. 121(RLS) "An Act establishing the commercial charter fisheries revolving loan fund, the mariculture revolving loan fund, and the Alaska microloan revolving loan fund and relating to those funds and loans from those funds; and providing for an effective date." 9:10:52 AM Senator Thomas MOVED to ADOPT the proposed committee substitute for CSHB 121(RLS), Work Draft 27-GH1728\S (Bullard, 4/14/12). Co-Chair Stedman OBJECTED for the purpose of discussion. DARWIN PETERSON, STAFF, SENATOR BERT STEDMAN, explained the changes in the committee substitute. He stated that Sections 1 to 11 were new sections that would establish the Community Quota Entity revolving loan fund, and was based on language from SB 204. He stated that the intent of the program was to assist small coastal communities throughout Southeast Alaska and the Gulf of Alaska to form non-profit community entities that may be eligible for up to a $1 million loan from the State to purchase up to 50,000 pounds of fishing quota that would be held in trust for community residents. Currently there were 45 coastal communities that could qualify, because they meet the requirements of being off the road system with a population of 1500 or less and a history of fishing. After consulting with the Alaska Bankers Associations, side-bars were placed on the program to satisfy some of their concerns. On page 3, line 14 the interest deferment was reduced from 10 years to 2 years. On page 3, line 15 the language expressly prohibited the Community Quota Entity from refinancing their loan through the State. The language was also adjusted to make the Community Quota Entity a pilot program, that would sunset in five years. The fiscal note appropriated $10 million, which was enough for ten communities. In five years, the legislature could revisit the program. If the program had proven to be successful, the legislature could decide if the program should continue. In addition, the committee substitute placed an interest rate floor on loans offered through the Commercial Fishing Loan Fund. The floor would be the prime rate plus one percentage point, plus an additional percentage point determined by the Department to represent risk. This would promote interest rates offered through the State's loan program that were more closely based on market forces and would discourage the State from offering artificially low subsidized rates that would compete with the private sector. Mr. Peterson stated that Section 12 set up the Commercial Charter Fisheries Revolving Loan Fund. He stated that the committee substitute removed the sub-sections referring to vessels, so loans could only be used for purchase permits. Loans for fishing vessels could be accessed through conventional lenders. He stated that page 7, lines 13 to 15 limited the loan amount for a charter halibut permit to a value determined by the Department, based on a 12-month rolling average set quarterly, not to exceed $100,000. He explained that the average price for halibut permits ranged from $29,000 to $61,000. Co-Chair Stedman REMOVED his OBJECTION. There being NO FURTHER OBJECTION, Work Draft 27-GH1728\S was ADOPTED. 9:15:32 AM Co-Chair Stedman explained that there was current work regarding HB 121, and wondered if Mr. Curtis had any remarks for the committee. CURTIS THAYER, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained the different fishing revolving loan funds. He remarked that with this particular loan, there was delayed payment for up to seven years. Co-Chair Stedman discussed the fiscal notes in the members' packets. Co-Chair Hoffman MOVED to report SCS CSHB 121(FIN) out of committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. SCS CSHB 121(FIN) was REPORTED out of committee with a "do pass" recommendation and with four new fiscal impact notes from the Senate Finance Committee for the Department of Commerce, Community and Economic Development.