Legislature(2009 - 2010)BARNES 124
04/05/2010 01:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB416 | |
| HCR21 | |
| HB389 | |
| SB269 | |
| SB272 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 416 | TELECONFERENCED | |
| + | HCR 21 | TELECONFERENCED | |
| + | HB 389 | TELECONFERENCED | |
| + | SB 269 | TELECONFERENCED | |
| + | SB 272 | TELECONFERENCED | |
HB 389-COMMERCIAL FISHING LOAN ACT
1:57:49 PM
CHAIR OLSON announced that the next order of business would be
HOUSE BILL NO. 389, "An Act relating to loans made to commercial
fishermen under the Commercial Fishing Loan Act for energy
efficiency upgrades; and providing for an effective date."
1:58:45 PM
KATIE KOESTER, Staff, Representative Paul Seaton, Alaska State
Legislature, explained that this bill encourages the use of
Alaska manufactured products in Alaska's commercial fishing
vessel fleets. She paraphrased from the sponsor statement,
which read as follows [original punctuation provided]:
HB 389 allows the Department of Commerce Community and
Economic Development to give Commercial Fishing Loan
Fund borrowers a reduction in the interest rate on
their loan if 50% of their loan is spent on a product
produced or manufactured in the State of Alaska. The
Commercial Fishing Loan Fund was created by the State
of Alaska to aid commercial fishermen in securing new
equipment, quota shares and upgrades to their vessels.
The Department already allows reductions in interest
rates for borrowers who pay on time, make engine and
fuel efficiency upgrades or product quality
improvements.
The Department needs to have the discretion to
institute this rate reduction program when the market
allows it, which is why HB 389 does not make the
reduction mandatory. For example, in today's market
the interest rates are so low, if the Department were
required to issue the loan it would jeopardize the
solvency of the fund.
To be eligible for the rate reduction under HB 389 at
least 50% of borrower's purchases with the loan fund
have to be manufactured in the State of Alaska. The
definition of manufacture is "processing, developing,
or making an item into a new item with a distinct
character and use."
HB 389 promotes economic development in Alaska by
encouraging Alaska fisherman to purchase equipment
manufactured in the State of Alaska when using
Commercial Fishing Loan Fund dollars.
MS. KOESTER explained that a two percent reduction would be
offered. This would apply to two or the seven or eight programs
in the Commercial Fishing Loan Fund: the Product Quality and
Engine Efficiency Replacement Programs. The product quality
program is for purchasing items that improve the quality of the
catch, such as "slush bags" or refrigeration units. The Engine
Efficiency Replacement Program allows for engine replacement for
fuel efficiency. She emphasized this is a voluntary program.
When the market improves the reductions would be allowed since
currently reducing the interest rate would jeopardize the fund.
2:02:17 PM
GREG WINEGAR, Director, Division of Investments, Department of
Commerce, Community, & Economic Development (DCCED), offered
that the DCCED supports the concept. This would not "kick in"
right away, but anticipates that at some point interest rates
will go up. This bill will allow the department time to develop
regulations and provide lower rates for products manufactured in
the state.
2:03:02 PM
REPRESENTATIVE T. WILSON asked whether the two percent reduction
in interest rates would apply each year or if it only would
apply to new loans.
MR. WINEGAR explained that basically the rate is established at
the time the initial loan is taken out. If the loan met the
criteria at that point, the rate would stay in effect for the
life of the loan. Additionally, the division offers a "Pay on
Time Program, which allows for a one percent interest rate
reduction.
2:03:55 PM
MR. WINEGAR, in response to Representative Holmes, answered that
the one percent interest rate for the "Pay on Time Program" and
the two percent proposed reduction for purchasing the state
manufactured products would be cumulative.
2:04:20 PM
CHAIR OLSON, after first determining no one else wished to
testify, closed public testimony on HB 389.
[HB 389 was held over.]