Legislature(2009 - 2010)BUTROVICH 205
02/03/2010 03:30 PM Senate RESOURCES
| Audio | Topic |
|---|---|
| Start | |
| SB195 | |
| SB104 | |
| HB20 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 220 | TELECONFERENCED | |
| *+ | SB 104 | TELECONFERENCED | |
| *+ | SB 195 | TELECONFERENCED | |
| + | HB 20 | TELECONFERENCED | |
HB 20-FISHERIES LOANS:ENERGY EFFICIENCY/AMOUNT
4:13:43 PM
CO-CHAIR WIELECHOWSKI announced HB 20 to be up for
consideration. [CSHB 20(FIN) was before the committee.]
4:14:03 PM
TIM CLARK, staff to Representative Edgmon, sponsor of HB 20,
explained that the current loan fund has six loan programs. They
are divided into subsections in statute and indicated by letters
A through F. This bill addresses, for the most part, only
changes in how the programs in subsections A and B are
administered. He explained that section A loans are for up to
$300,000 for entry permits and existing vessel and gear upgrades
to improve seafood quality. Section B loans can be up to
$100,000 and be used for entry permits, vessel and gear upgrades
for nearly any purpose including energy efficiency, vessel and
gear purchases and new vessel construction; section C loans are
for purchasing quota shares; section D loans are to help satisfy
past due federal tax obligations; section E loans are to
purchase quota shares by a community quota entity; and section F
loans are for existing tender vessel and gear improvements
relating to seafood quality.
4:16:47 PM
MR. CLARK said in 2008 the Division of Investments promoted a
program under subsection B that made loans for the purposes of
improvements for energy efficiency on existing vessels and gear.
Because it is so successful, they want to make the program
available to a larger number of people in the fishing industry.
So, HB 20 adds improving energy efficiency to the purposes for
which the A loans can be made and eliminates a prohibition for a
borrower who has never had a loan out under subsection A from
applying for a subsequent loan in the subsection B program. But
it is only eliminated if the purpose of the B loan is
specifically for improving energy efficiency.
MR. CLARK said the other amendment raises the total allowable
balance outstanding on loans to an individual who has both A and
B loans from $300,000 to $400,000 - recognizing the increased
cost for a lot of their equipment. He reported that overall
programs under the loan fund have a cap of $400,000 for total
outstanding debt and this increase does not change that total.
SB 104 has an immediate effective date.
4:19:47 PM
SENATOR STEVENS said it looks like these loans go to only
Alaskans, but at the beginning of the commercial fishing loan
summary it says "predominantly resident fisheries" and he wanted
to know what that meant.
MR. CLARK answered that no loans under the fund are available to
non-residents.
SENATOR STEVENS said he absolutely supports this program.
SENATOR WAGONER explained that some vessels are home ported in
Alaska and also fish in Alaska, but he also knew of one Alaskan
who fished the herring fishery in San Francisco.
4:21:41 PM
SENATOR HUGGINS said some guys live in Senator Wagoner's area
who do halibut charters and he asked where they would fall in
the definition of commercial.
4:22:45 PM
SENATOR STEDMAN joined the committee.
MR. CLARK replied that these commercial fishing loan fund
programs would not be open to sport fish and charter operations.
He has been told that those loans are also administered through
the Division of Investments.
4:22:57 PM
CO-CHAIR WIELECHOWSKI asked if "energy efficiency" has been
defined.
MR. CLARK replied that the division has successfully written
regulations that ensure the loans go for the proper purpose.
4:23:53 PM
GREG WINEGAR, Director, Division of Investments, Department of
Commerce, Community & Economic Development (DCCED), said he
administers the commercial fishing revolving loan fund that
would be amended by HB 20. He said the program has been around
since the early 70s and its purpose is to create a predominantly
resident fishery. It does that by making loans to Alaskan
residents (of two years). This fund has been very successful
from both policy and fiscal standpoints and it has been totally
self sufficient for many years. The bill allows both sections A
and B borrowers to obtain a low interest loan to upgrade vessels
to improve energy efficiency. In most cases they are talking
about a more fuel efficient engine.
He said that this would help increase fishermen's profitability
and it has the added benefit of helping the environment by
lowering the industry's carbon footprint. The fiscal note
indicates an uptick in loan demand and the fund has sufficient
capital to handle that.
SENATOR STEDMAN asked if this would encourage instate
development of fisheries. He asked how this bill would "help
bring home our permits out of Washington."
MR. WINEGAR replied that the overall intent is to create a
"predominantly resident fishery." This will help a larger
portion of the Alaskan fleet obtain low interest loans to put in
more energy efficient engines, which would lower their operating
costs. It helps the whole industry by lowering its carbon
footprint.
CO-CHAIR WIELECHOWSKI asked if it is constitutional to limit
loans to residents. Had it been tested?
MR. WINEGAR replied yes it had been tested. At one time the
program had a five-year residency requirement, but that ran into
constitutional issues. The legislature made a change some years
ago and dropped it down to two years, which has not been tested
in court. It was felt at the time that two years was justifiable
because the fishing industry is a fairly mobile industry and
people move around quite a bit back and forth, as Senator
Wagoner mentioned.
SENATOR STEDMAN asked if hand trollers would qualify too.
MR. WINEGAR answered yes.
SENATOR STEDMAN asked if the boat has to have a percentage of
its business in the hand troll business or does one just have to
own a hand toll license and land a couple of fish to qualify.
MR. WINEGAR answered that the boat could qualify under both
sections A and B. Under section A they would have had to fish
three of the past five years including the preceding season.
Section B criteria is a little different; you basically have to
be in an area that doesn't have any other occupational
opportunities other than fishing or you have to have had 25
percent of your income over the past two years from commercial
fishing.
4:28:48 PM
JERRY MCCUNE, United Fishermen of Alaska (UFA), said he
wholeheartedly supported HB 20. New engines that create less
emissions have been designed, he said, which are wonderful, but
he has just found out that he can't use his outdrives, because
of the back pressure. So he has to buy all new engines which
will cost around $50,000. A lot of that will be going on with
other fishermen. He said this will help everyone across the
state, especially the little guys who can get new outboards that
put out fewer emissions. Everyone is going to have to repower
some time. New EPA rules are also coming out.
SENATOR WAGONER asked which fisheries are excluded from this
program.
MR. MCCUNE said he didn't know of any fishery that had been
excluded.
4:31:48 PM
JASON BRUNE, Executive Director, Resource Development Council
(RDC), supported HB 20. He said the RDC is comprised of
individuals and companies from all the major sectors of Alaska's
economy including the fisheries. Its purpose is to link these
diverse interests together to encourage a strong diversified
private sector in Alaska. He said that Alaskans have been
struggling with high energy costs for the last several years and
fuel costs and usage have escalated as fishermen are required to
go further out for their catch due to impacts from endangered
species listing, critical habitat designations, marine
protection areas and fish movement. Opportunities to improve
energy efficiency through state loans are important not only for
the pocketbooks of the fishermen who harvest over half of our
nation's total catch, but also for the communities in which they
live and, of course, for the environment. Increased efficiency
will likely lead to lower costs and ultimately decreased carbon
emissions.
MR. BRUNE noted that this bill has bipartisan support on the
House side, with both the Majority and Minority signing on as
co-sponsors. It makes good sense and he urged its expeditious
passage.
CO-CHAIR WIELECHOWSKI closed public testimony.
4:34:02 PM
SENATOR HUGGINS said the cruise ship industry has standards for
discharges and other things. He asked if it said somewhere what
an upgrade really is.
4:35:39 PM
MR. WINEGAR answered that 3 AAC 80.0550 has fairly general
language that says "an engine efficiency upgrade an applicant
must establish to the satisfaction of the department that the
upgrade to be financed with the loan will reduce emissions or
improve fuel productivity." Significant savings have been seen
in the loans they have done so far.
SENATOR HUGGINS said this is a great idea; he has listened to a
number of people in the Kenai being irritated by the fact that
you can use "X" engine for certain periods of time and "Y" in
others; they have other equipment made in various parts of the
world, but for loaning money he wanted some degree of comfort
that what they are doing makes sense.
MR. WINEGAR said they look at each loan on an individual basis
and ask the borrower to demonstrate what the savings will be.
They also look at the literature on the engines as part of the
evaluation process.
SENATOR HUGGINS asked if he takes out the loan and makes the
modification, then decides to move to Seattle, does the loan get
modified.
MR. WINEGAR replied that the division doesn't have the legal
ability to call the loan, because of constitutional issues, but
if a person needs an extension on the loan and is still a
resident, they have the legal ability to put the interest into a
non-accruing account. If the borrower is no longer a resident
that interest can be added to the balance like a bank loan.
4:38:41 PM
SENATOR HUGGINS asked what happens if he sells the boat.
MR. WINEGAR replied that the division takes a security position
in the vessel, so he would be required to pay off the loan.
4:39:47 PM
CO-CHAIR WIELECHOWSKI thanked everyone for their testimony and
finding no further business to come before the committee, he
adjourned the meeting at 4:40 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 104 Bill Packet.pdf |
SRES 2/3/2010 3:30:00 PM |
SB 104 |
| SB 195 - Bill Packet.pdf |
SRES 2/3/2010 3:30:00 PM |
SB 195 |