1997-03-06                     House Journal                      Page 0559
HB 177                                                                       
HOUSE BILL NO. 177  by the House Rules Committee by request of                 
the Governor, entitled:                                                        
                                                                               
An Act relating to loans to commercial fishermen for marketing                
development purposes; and providing for an effective date.                     
                                                                               
was read the first time and referred to the Labor & Commerce                   
Committee, the House Special Committee on Fisheries and the Finance            
Committee.                                                                     
                                                                               
The following fiscal note applies:                                             
                                                                               
Zero fiscal note, Dept. of Commerce & Economic Development, 3/6/97             
                                                                               
The Governors transmittal letter, dated March 5, 1997, appears below:          
                                                                               
Dear Speaker Phillips:                                                         
                                                                               
Alaskas salmon industry is facing extremely difficult times; some have         
even referred to it as a crisis.  World salmon supplies have more than         

1997-03-06                     House Journal                      Page 0560
HB 177                                                                       
doubled in the past decade, primarily due to the ever-increasing               
supplies of farmed salmon from other parts of the world.  As a result,         
prices for Alaska salmon have plummeted, threatening every segment             
of the industry.                                                               
                                                                               
                                                                               
As part of my Alaska Business Investment Incentive Plan, I have                
proposed legislation to grant tax credits to salmon processors who             
develop and market new, value-added salmon products.  In order to              
provide another, and more direct form of assistance to fishermen in            
broadening market options, I am also proposing this bill to authorize          
lending from the Commercial Fishing Revolving Loan Fund                        
(CFRLF)  to Alaska fishermen who choose to market their own fish.              
                                                                               
                                                                               
The Harvester Marketing Loan Program will provide capital to                   
commercial fishermen to diversify their markets.  This concept was             
discussed at my Administrations recent Salmon Strategy Forum and               
presented as an option that would allow harvesters to pursue alternative       
approaches for selling their catch.                                            
                                                                               
                                                                               
Under the proposal, the Department of Commerce and Economic                    
Development could make loans to qualified resident commercial                  
fishermen similar to loans currently made for limited entry permits,           
vessels and quota shares.  Lending priority for the various types of           
loans made from the fund is established by regulation.  The current            
plan is to make marketing loans a high priority until $2 million is lent,      
and then a low priority after that amount.  This would ensure that the         
original purposes of the CFRLF will continue to be met, while still            
allowing these new loans to be made.  The CFRLF currently lends                
approximately $15 million per year; this proposal will not change that         
amount.                                                                        
                                                                               
                                                                               
All sectors of Alaskas salmon industry must be able to adapt to be             
competitive in the changing world marketplace.  This should include            
exploring and developing potential new market niches, trying                   
alternative approaches to marketing, and broadening available options          
                                                                               

1997-03-06                     House Journal                      Page 0561
HB 177                                                                       
for direct fish sales.  This bill will encourage and enable some creative,     
entrepreneurial fishermen to do that.                                          
                                                                               
							Sincerely,                                                              
							/s/                                                                     
							Tony Knowles                                                            
							Governor