05/11/2024 10:00 AM Senate FINANCE

SENATE BILL NO. 125                                                                                                           
                                                                                                                                
"An Act  relating to subsidiary  corporations of  the Alaska                                                                    
Housing  Finance Corporation;  and  establishing the  Alaska                                                                    
energy independence fund."                                                                                                      
                                                                                                                                
11:07:55 AM                                                                                                                   
                                                                                                                                
Co-Chair Olson  relayed that the  had been  heard previously                                                                    
in committee.                                                                                                                   
                                                                                                                                
KEN  ALPER, STAFF  TO Co-Chair  Olson, reviewed  the CS  and                                                                    
highlighted  that  the  bill would  establish  a  subsidiary                                                                    
corporation  within the  Alaska Housing  Finance Corporation                                                                    
for  the  purpose  of lending  money  for  renewable  energy                                                                    
products.                                                                                                                       
                                                                                                                                
Co-Chair  Olson asked  whether there  was any  opposition to                                                                    
the CS.                                                                                                                         
                                                                                                                                
Mr.  Alper   had  not  heard   of  any  opposition   to  the                                                                    
legislation.                                                                                                                    
                                                                                                                                
11:09:16 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:11:17 AM                                                                                                                   
REVONVENED                                                                                                                      
                                                                                                                                
Senator  Kiehl MOVED  to  ADOPT  Amendment 1,  33-GS1074\U.2                                                                    
(Walsh, 5/10/24) (copy on file).                                                                                                
                                                                                                                                
Co-Chair Olson OBJECTED for discussion.                                                                                         
                                                                                                                                
Senator Kiehl  spoke to Amendment  1. He explained  that the                                                                    
amendment was a  small adjustment to the scope  of the bill.                                                                    
The amendment had  to do with commercial  fishing loans from                                                                    
the Commercial  Fishing Revolving  Loan fund. He  noted that                                                                    
the fund  had a balance  of about $36 million.  He explained                                                                    
that the  fund loans at  2 points  above the prime  rate and                                                                    
currently  had   a  different  limit   for  new   loans  and                                                                    
refinancing.  He  emphasized  that  the  commercial  fishing                                                                    
industry  was in  crisis, and  small family  businesses were                                                                    
suffering.  The amendment  would allow  commercial fishermen                                                                    
to  refinance  loans  up  to  $400,000,  over  a  three-year                                                                    
period, and would  set the interest rate  for the three-year                                                                    
period  at 5.25  percent. He  said that  this would  benefit                                                                    
Alaskan fishing families and fish processors.                                                                                   
                                                                                                                                
11:14:25 AM                                                                                                                   
                                                                                                                                
Senator  Bishop asked  whether  there  was anyone  available                                                                    
from  the Department  of Commerce,  Community, and  Economic                                                                    
Development (DCCED) to comment on the amendment.                                                                                
                                                                                                                                
11:14:45 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:15:23 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
Senator Bishop  referenced Section  3 and the  interest rate                                                                    
of  5.25  percent  for  three  years.  He  wondered  whether                                                                    
modeling had been  done to determine whether  the fund could                                                                    
sustain the proposed interest rate.                                                                                             
                                                                                                                                
Senator Kiehl  relayed that  he had  with Micaela  Fowler at                                                                    
DCCED,  and   the  department   was  comfortable   with  the                                                                    
amendment.                                                                                                                      
                                                                                                                                
11:16:54 AM                                                                                                                   
                                                                                                                                
SANDRA MOLLER,  DIRECTOR, DIVISION  OF COMMUNITY  & REGIONAL                                                                    
AFFAIRS,  DEPARTMENT  OF   COMMERCE,  COMMUNITY  &  REGIONAL                                                                    
AFFAIRS (via  teleconference), did not have  and comments on                                                                    
the loan program modeling.                                                                                                      
                                                                                                                                
11:17:09 AM                                                                                                                   
                                                                                                                                
Co-Chair  Stedman thought  it was  important to  discuss the                                                                    
interest rate and dollar amount limits.                                                                                         
                                                                                                                                
Ms. Moller  surmised that Co-Chair  Stedman had  asked about                                                                    
the dollar amount  and interest rate changes.  She asked Co-                                                                    
Chair Stedman to restate the question.                                                                                          
                                                                                                                                
Co-Chair  Stedman referenced  page 7,  line 28  and Page  8,                                                                    
lines 15 and 16.                                                                                                                
                                                                                                                                
Ms. Moller requested a moment  to find the references in the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair  Stedman  wondered  whether the  amendment  sponsor                                                                    
could discuss the changes.                                                                                                      
                                                                                                                                
Senator  Kiehl believed  that  Ms. Fowler  was  going to  be                                                                    
dialing in.   He noted  that currently the loan  fund loaned                                                                    
at prime, plus  2, capped at a maximum of  10.5 percent. The                                                                    
amendment  would lower  the rate  for three-years  to prime,                                                                    
plus 2, capped at 5.25 percent.                                                                                                 
                                                                                                                                
Co-Chair Stedman understood the  amendment was meant to help                                                                    
the  industry through  difficult  times and  the rate  would                                                                    
revert to 10.5 percent once things improved.                                                                                    
                                                                                                                                
Senator Kiehl answered affirmatively.                                                                                           
                                                                                                                                
11:20:18 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:21:50 AM                                                                                                                   
RECONVENED                                                                                                                      
                                                                                                                                
MICAELA   FOWLER,   DEPUTY   COMMISSIONER,   DEPARTMENT   OF                                                                    
COMMERCE,   COMMUNITY   AND    ECONOMIC   DEVELOPMENT   (via                                                                    
teleconference), introduced herself.                                                                                            
Co-Chair Stedman relayed that  member's questions related to                                                                    
the  interest rate,  the dollar  amount, and  the amount  of                                                                    
time the interest rate would be lowered.                                                                                        
Ms.  Fowler  relayed  that the  department  appreciated  the                                                                    
consideration  for  the  commercial  fishing  industry.  She                                                                    
referenced the Commercial Fisheries  Revolving Loan Fund and                                                                    
noted it had been an effective  tool for the state. She said                                                                    
that the department supported the amendment.                                                                                    
                                                                                                                                
Ms.  Fowler  noted  that  current rates  were  at  the  10.5                                                                    
percent cap,  and the  rate was  set at  prime, plus  2. She                                                                    
said that 5.25  percent saw set because  it was historically                                                                    
the  lowest  the rates  had  been.  She  thought it  was  an                                                                    
appropriate  rate and  reiterated  that it  would return  to                                                                    
10.5 percent when the industry recovered.                                                                                       
                                                                                                                                
11:25:06 AM                                                                                                                   
                                                                                                                                
Co-Chair  Olson  WITHDREW  his  objection.  There  being  NO                                                                    
OBJECTION, it was so ordered. Amendment 1 was ADOPTED.                                                                          
                                                                                                                                
Senator  Kiehl   MOVED  to  report  CSSB   125(FIN)  out  of                                                                    
Committee  as amended  with  individual recommendations  and                                                                    
the accompanying fiscal notes.                                                                                                  
                                                                                                                                
CSSB 125(FIN)  was REPORTED out  of committee with  four "do                                                                    
pass"  recommendations and  with  three  no  recommendation                                                                     
recommendations; and with one new  zero fiscal note from the                                                                    
Department  of Administration;  one new  fiscal impact  note                                                                    
from the Department of Revenue;  two new fiscal impact notes                                                                    
from  the Department  of  Commerce,  Community and  Economic                                                                    
Development;  and   one  new  zero  fiscal   note  from  the                                                                    
Department of Commerce, Community and Economic Development.