1997-03-06                     Senate Journal                      Page 0595
SB 121                                                                       
SENATE BILL NO. 121 BY THE SENATE 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 Resources and Finance              
Committees.                                                                    
                                                                               
Zero fiscal note published today from Department of Commerce and               
Economic Development.                                                          
                                                                               
Governors transmittal letter dated March 5:                                    
                                                                               
Dear President Miller:                                                         
                                                                               
Alaskas salmon industry is facing extremely difficult times; some              
have even referred to it as a crisis.  World salmon supplies have              
more than 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.                                                 
                                                                               
                                                                               

1997-03-06                     Senate Journal                      Page 0596
SB 121                                                                       
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          
for direct fish sales.  This bill will encourage and enable some               
creative, entrepreneurial fishermen to do that.                                
                                                                               
						Sincerely,                                                               
						/s/                                                                      
						Tony Knowles                                                             
						Governor