Legislature(2011 - 2012)SENATE FINANCE 532
01/20/2012 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB53 | |
| SB103 | |
| SB68 | |
| SB30 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 51 | TELECONFERENCED | |
| + | SB 53 | TELECONFERENCED | |
| + | SB 103 | TELECONFERENCED | |
| + | SB 68 | TELECONFERENCED | |
| + | SB 30 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE BILL NO. 68
"An Act relating to the examinations, board, loans,
records, and lobbying contracts of the Alaska
Commercial Fishing and Agriculture Bank; and providing
for an effective date."
10:19:10 AM
SENATOR JOHN COGHILL, introduced SB 68. He explained that
SB 68 would strengthen the Commercial Fishing and
Agriculture Bank (CFAB) and its ability to serve member-
owners. The CFAB was created by the legislature to fulfill
a need for financing the agricultural and fishing permit
industries. The bill would remove dollar limitations for
co-op members seeking loans for tourism-related activities
and the development or exploitation of natural resources.
He stated that SB 68 would also allow CFAB to make loans
for capital investment or operating capital to a shore-
based fish processor, a timber processor, or an
agricultural processor or harvester with facilities located
in Alaska. He furthered that SB 68 would extend this
allowance to tourism-related activities and the development
or exploitation of natural resources as outlined in
subsections 15 and 16 of the bill. He noted that the
legislature supplied $32 million in seed money to CFAB to
kick start it he cooperative and since the coop was using
dollars borrowed from the general fund, CFAB was prohibited
by law from hiring a lobbyist because it was thought of as
a quasi-governmental entity until it had paid the state
back the full amount of the loan with interest. He informed
the committee that CFAB had fulfilled that obligation and
was an independent business, so there was not need to
prohibit them from having a lobbyist. He explained that SB
68 required CFAB's financial records to be examined by the
Department of Commerce Division of Banking at 36-month
intervals and required CFAB to reimburse the state for the
cost of the audit.
10:23:40 AM
Senator Coghill reviewed the Sectional Analysis (copy on
file). He stated that Section 1 would remove the
requirement that one member of the CFAB board of the
directors be a resident farmer. He noted that there had
been some contention around the removal of the resident
farmer, because some people prefer the farm seat. He noted
that the removal did not preclude the board from having a
resident farmer, but it was occasionally a difficult
position to fill. He explained that Section 2 dealt with
sixteen subsections under the lending powers of the bank.
He noted that Section 2 subsections 5, 6, and 7 would
remove the dollar limitations. He remarked that in 2002,
the legislature added the limitations, but there was a
change to CFAB's authority. Removing the limitations would
allow CFAB to play a bigger role in industry. He reminded
the committee that CFAB was a private, membership-owner
based organization.
10:29:00 AM
He explained that Section 2 subsection 8 would clarified
that a person who received a loan for capital investment or
operating capital to a shore-based fish processor, a timber
processor, or an agricultural processor or harvester, must
meet all requirements except for residency and resident
ownership of company. He furthered that Section 2
subsection 10 would add new loans to non-residents for
capital investment or operating capital to operate tourism
activities under subsection 15 and development and
exploitation of natural resources under subsection 16, to
loans secured by liens subordinate to valid first liens and
security agreements granted to another creditor.
Senator Coghill stated that Section 2 subsection 12 would
add new loans to non-residents for capital investment or
operating capital to an operator of tourism-related
activities and facilities dedicated to the development or
exploitation of natural resources, to provisions for CFAB
to participate with another bank without the obligor being
a member of CFAB. He furthered that Section 2 subsection 13
would allow CFAB to purchase or participate in loans from
other lenders for loans to non-residents whether or not an
obligor is a member of the bank. He noted that Section 2
subsections 15 and 16 would add new subsections related to
non-residents to receive loans.
Senator Coghill pointed out that Section 3 would add an
audit by Department of Commerce, Community, and Economic
Development, Division of Banking and Securities, as an
exception to the confidentiality provision of CFAB's
financial record. He noted that Sections 4 and 5 related to
adding new statutes. He explained that Section 6 would
repeal the definition of "resident farmer" and would repeal
the prohibition of CFAB having a lobbyist. He stated that
Section 7 would establish a section prohibiting any bank
examination until one year after the effective date of this
act. He concluded that Section 8 would establish an
immediate-effective-date provision to this act.
10:31:17 AM
Co-Chair Hoffman queried the current available funds for
loans. Senator Coghill deferred to the CFAB ceo, but noted
that the bill would expand the capacity for the loans based
on the collateral.
Co-Chair Hoffman looked at page 4, areas 15 and 16 of SB 68
and felt "tourism related activities" was too broad a term.
He wondered what funds were available for tourism related
activities. Senator Coghill did not know what funds were
available. He added that he was not concerned with the
"tourism related activities", because applicants must be a
member with collateral, and maintain a brick and mortar
within the state.
Senator Olson wondered what the other major banks thought
of SB 68. Senator Coghill did not know of any negative
comments from the major banks.
Senator Thomas looked at page 1, line 7 and queried an
alternative to "nine natural persons." He was concerned
with some of the language related to the term "operator."
Senator Coghill agreed to provide that information at a
later date.
Co-Chair Stedman noted a new fiscal note from the
Department of Commerce, Community and Economic Development.
LELA KLINGERT, PRESIDENT, ALASKA COMMERCIAL FISHING AND
AGRICULTURE BANK, testified in support of SB 68.
10:39:46 AM
Co-Chair Hoffman asked if the bill would impact the funds
available to CFAB. Ms. Klingert responded that there were
no restrictions on the fund.
Senator Thomas queried some of the language in the bill,
specifically related to corporations versus natural people.
Ms. Klingert responded that she did not know. She furthered
that it was legal terminology.
Co-Chair Stedman requested that Ms. Klingert to come back
to the committee with more information regarding the
committee members' requests. Senator Coghill stated that he
would make sure the committee received the information.
SB 68 was HEARD and HELD in Committee for further
consideration.