05/10/2003 09:05 AM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 105(FIN)                                                                                             
     "An Act relating to loans to satisfy past due federal tax                                                                  
     obligations of commercial fishermen and to the commercial                                                                  
     fishing loan program."                                                                                                     
                                                                                                                                
                                                                                                                                
This was  the first  hearing for  this bill  in the Senate  Finance                                                             
Committee.                                                                                                                      
                                                                                                                                
Co-chair  Wilken  announced  that  this   legislation  would  allow                                                             
commercial fisherman  to secure loans  to satisfy federal  Internal                                                             
Revenue Service (IRS) debt retirement.                                                                                          
                                                                                                                                
SENATOR  GARY STEVENS,  the  bill's  sponsor, expressed  that  this                                                             
legislation results  from the State's Salmon Task Force  efforts to                                                             
assist the  "in crisis" fishing industry.  He stated that  the bill                                                             
proposes changes to the Commercial Fishing Revolving Loan Fund that                                                             
is funded by its  participants and administered by  the Division of                                                             
Investments, Department  of Community and Economic  Development, by                                                             
reinstating  a  previous  loan  program   that  allowed  commercial                                                             
fishermen "to  access these funds  to satisfy past due  federal tax                                                             
obligations."                                                                                                                   
                                                                                                                                
Senator G. Stevens voiced that  the Salmon Task Force supports this                                                             
legislation  in  order  to protect  and  retain  in-state  resident                                                             
limited-entry salmon permits and continue providing jobs in regions                                                             
of the  State with limited  job opportunities.  He emphasized  that                                                             
these loans would be "secured" and have a maximum $40,000 limit. He                                                             
stated that in addition to loan requirements, applicants must prove                                                             
that they  are a current  resident of the  State, must have  been a                                                             
resident  for the  two previous  years;  must be  current on  their                                                             
federal tax  filings; and  must have a  payment agreement  with the                                                             
IRS.  He  stated  that  this  legislation  would  incur  a  $30,000                                                             
detriment in FY 04 and a detriment of $13,000 thereafter through FY                                                             
09.                                                                                                                             
                                                                                                                                
Senator G. Stevens noted that the removal of the word "promptly" in                                                             
Section  3, subsection  (b), line  31 on  page 4,  would allow  the                                                             
Department   flexibility  regarding   the  timeline  required   for                                                             
advertising the sale  of repossessed permits in order  to entertain                                                             
"quality offers." This language reads as follows.                                                                               
                                                                                                                                
     Sec. 3. AS 16.10.337(b) is amended to read:                                                                                
     (b) If  the commission  does not exercise  its right  of first                                                             
     refusal within 30 days after  it receives the offer, or if the                                                             
     permit  is  not  subject   to  a buy-back   program  under  AS                                                             
     16.43.290-16.43.330, the department shall [PROMPTLY] advertise                                                             
     and sell the permit.                                                                                                       
                                                                                                                                
     Next Text Underlined [DELETED TEXT BRACKETED]                                                                            
                                                                                                                                
Senator  Bunde   asked  whether   the  bill's  two-year   residency                                                             
requirement might incur a legal challenge.                                                                                      
                                                                                                                                
Senator G. Stevens  stated that the two-year residency  requirement                                                             
is not a new provision in the bill, and he stated that, to date, no                                                             
legal challenge has been introduced.  He clarified that in addition                                                             
to the  two-year  residency requirement,  the applicant  must  be a                                                             
current resident of the State.                                                                                                  
                                                                                                                                
Senator Taylor clarified  that federal law does not  allow for more                                                             
than a two-year residency requirement.                                                                                          
                                                                                                                                
Senator Taylor  offered a  motion to move  the bill from  Committee                                                             
with individual recommendations and attached fiscal note.                                                                       
                                                                                                                                
There being no objections, HB 105  was REPORTED from Committee with                                                             
previous  negative $30,000  fiscal note #1  from the Department  of                                                             
Community and Economic Development.