Legislature(2003 - 2004)
04/28/2003 02:30 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 105
An Act relating to loans to satisfy past due federal
tax obligations of commercial fishermen and to the
commercial fishing loan program.
SENATOR GARY STEVENS provided information on the bill,
noting that it was intended to help an industry in crisis.
He explained that the last appropriation into the revolving
loan fund was in 1985. The bill reinstates a system used in
the past to mitigate a federal tax obligation. He pointed
out that the Salmon Task Force considered the bill as an
important part of their package of legislation to help the
industry. Many permits in Alaska are at risk. These are
secured loans.
Senator Stevens explained that permit holders who want to
take advantage of the loan program must be a State resident
for a continuous two years before applying for the
application. They must be current on their income tax
filing with a payment agreement with the Internal Revenue
Service (IRS). HB 105 would eliminate the ½ percent
refinancing fee in the program. He added that there was a
provision, eliminating the word "promptly", allowing more
flexibility for the Division of Investments. He stated that
the bill is a "small step" for an industry in crisis.
Co-Chair Harris spoke to the fiscal note, asking where the
funds would come from. Senator G. Stevens noted that the
dollars would come from the people that participate in it.
They have been used in the past from the revolving loan
fund.
Representative Croft observed that the funds indicated in
the fiscal note were general funds. Senator G. Stevens
acknowledged that this would be a loss of income for the
general fund.
GREG WINEGAR, DIRECTOR, DIVISION OF INVESTMENTS, DEPARTMENT
OF COMMUNITY & ECONOMIC DEVELOPMENT, corrected Senator
Stevens noting that it would be a loss to the Revolving Loan
Fund. In response to a question by Representative Croft,
Mr. Winegar expected a relatively low activity around 10-15
loans per year. He stated that the fund would not be
impacted.
Representative Croft asked if the loans had a different
default rate. Mr. Winegar replied that the loans have had a
higher delinquency rate.
Representative Croft asked how the loans would be secured.
Mr. Winegar replied that they would be secured with the
permit as collateral.
Co-Chair Harris inquired the balance in the Revolving Loan
Fund. Mr. Winegar commented that the current balance was
approximately $90 million dollars. The projected balance
for this fiscal year is approximately $15 million dollars.
Co-Chair Harris asked if there was any money taken out of
the fund from the recent past. Mr. Winegar stated that last
year, $2 million dollars had been taken out of that fund to
balance the Power Cost Equalization (PCE) fund.
(TAPE CORRECTION)
TAPE HFC 03 - 68, Side A
Representative Hawker MOVED to adopt Amendment #1, #23-
LS0534\D.1, Utermohle, 4/28/03, which would add language
"and child support liens of which the department has
notice". Representative Chenault OBJECTED and asked if it
would be a normal procedure.
Mr. Winegar replied that it was normal and had been used in
the past.
BRUCE TWOMLEY, CHAIRMAN, COMMERCIAL FISHERIES LIMITED ENTRY
COMMISSION added that the amendment was consistent with
current law. Child Support Enforcement Agency (CSEA) has
the power to step in at that point and legally cannot take
any proceeds over and above those that need to be satisfied.
Representative Chenault asked about the notification process
to CSEA. Mr. Twomley deferred that question to the
Department of Revenue.
DAVID TREDWAY, CHILD SUPPORT ENFORCEMENT AGENCY, DEPARTMENT
OF REVENUE, offered to answer questions of the Committee.
He noted that all cases through the State of Alaska are
informed of any arrears that they have in the State and that
CSEA is assigned to collect that data through normal
channels. If this language was in statute, it would become
a statutory process liable for collection.
Representative Chenault commented that child support is
important in the State. He encouraged that the lag time be
shortened regarding what is owed verses paid.
Representative Chenault WITHDREW his OBJECTION to the
amendment. There being NO further OBJECTION, Amendment #1
was adopted.
Representative Foster MOVED to report CS HB 105 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note.
CS HB 105 (FIN) was reported out of Committee with a "do
pass" recommendation and with fiscal note #1 by Department
of Community & Economic Development.
At Ease: 4:15 P.M.
Reconvene: 4:40 P.M.
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