04/19/2000 03:19 PM Senate RES

         HB 238-TAX OBLIGATION LOAN PROGRAM FOR FISHERS                                                                     
                                                                                                                                
REPRESENTATIVE  MARY KAPSNER,  sponsor  of HB  238, explained  the                                                              
measure as  follows. HB  238 would  reinstate a widely  supported,                                                              
previously  existing program  to assist  fishermen in paying  back                                                              
taxes.  She favors the bill because  when the IRS seizes a permit,                                                              
it is under  no obligation to sell  it for the market  value or to                                                              
sell it  to in-state residents.   This program provides  a $30,000                                                              
one-time loan at a 10.5 percent rate of return.                                                                                 
                                                                                                                                
CHAIRMAN HALFORD asked  if the permit would be  held as collateral                                                              
for the loan.                                                                                                                   
                                                                                                                                
REPRESENTATIVE KAPSNER said that is correct.                                                                                    
                                                                                                                                
CHAIRMAN HALFORD  asked if  the permit can  be borrowed on  in any                                                              
other way if it is a person's only asset.                                                                                       
                                                                                                                                
REPRESENTATIVE KAPSNER said it cannot.                                                                                          
                                                                                                                                
CHAIRMAN HALFORD said that is how  this program differs from other                                                              
situations  in which people  are behind  in their tax  obligations                                                              
and would  lose other property.   In this case, the  property that                                                              
would be lost cannot be borrowed  on because it is a limited entry                                                              
permit.                                                                                                                         
                                                                                                                                
SENATOR GREEN asked if it can be sold.                                                                                          
                                                                                                                                
CHAIRMAN HALFORD said it can.  He then took public testimony.                                                                   
                                                                                                                                
MR.  TERRY  HOEFFERLE,   Bristol  Bay  Native   Association,  said                                                              
fishermen do  not have income  tax deductions withheld  from their                                                              
fishing pay.  When April 15 comes,  they are sometimes caught with                                                              
a large  tax bill.    He believes this  program will keep  the IRS                                                              
from taking  action  on limited entry  permits.   In Bristol  Bay,                                                              
many permits that were once held  by local fishermen have left the                                                              
region for one reason or another  and every local permit helps the                                                              
local economy.  He urged committee members to pass HB 238.                                                                      
                                                                                                                                
There  being no  further testimony,  SENATOR MACKIE  moved HB  238                                                              
from committee  with individual recommendations.   There  being no                                                              
objection, the motion carried.                                                                                                  
                                                                                                                                
With no further business to come before the committee, CHAIRMAN                                                                 
HALFORD adjourned the meeting at 3:23 p.m.