Legislature(2005 - 2006)
04/06/2005 02:03 PM House RES
| Audio | Topic |
|---|---|
| Start | |
| HB230 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
ALASKA STATE LEGISLATURE
HOUSE RESOURCES STANDING COMMITTEE
April 6, 2005
2:03 p.m.
MEMBERS PRESENT
Representative Jay Ramras, Co-Chair
Representative Ralph Samuels, Co-Chair
Representative Jim Elkins
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Kurt Olson
Representative Paul Seaton
Representative Harry Crawford
Representative Mary Kapsner
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 230
"An Act authorizing the making of loans for upgrade of
commercial fishing tender vessels and gear."
- MOVED HB 230 OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 230
SHORT TITLE: LOANS FOR COMMERCIAL FISHING TENDERS
SPONSOR(S): REPRESENTATIVE(S) THOMAS
03/22/05 (H) READ THE FIRST TIME - REFERRALS
03/22/05 (H) FSH, RES
03/30/05 (H) FSH AT 8:30 AM CAPITOL 124
03/30/05 (H) Moved Out of Committee
03/30/05 (H) MINUTE(FSH)
04/01/05 (H) FSH RPT 4DP 1NR
04/01/05 (H) DP: WILSON, ELKINS, LEDOUX, THOMAS;
04/01/05 (H) NR: SALMON
04/06/05 (H) RES AT 1:00 PM CAPITOL 124
WITNESS REGISTER
IAN FISK, Staff
to Representative Bill Thomas
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 230 on behalf of Representative
Thomas, sponsor.
JERRY MCCUNE
Cordova District Fishermen United
Juneau, Alaska
POSITION STATEMENT: Testified in support of HB 230.
JASON KOONTZ, Tender Owner
Homer, Alaska
POSITION STATEMENT: Testified in support of HB 230 and
recommended additions.
GREG WINEGAR, Director
Division of Investments
Department of Commerce, Community, & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions on HB 230.
ACTION NARRATIVE
CO-CHAIR RALPH SAMUELS called the House Resources Standing
Committee meeting to order at 2:03:43 PM. Representatives
Samuels, Elkins, Olson, Crawford, and LeDoux were present at the
call to order. Representatives Kapsner, Ramras, and Gatto
arrived as the meeting was in progress.
HB 230-LOANS FOR COMMERCIAL FISHING TENDERS
CO-CHAIR SAMUELS announced that the only order of business would
be HOUSE BILL NO. 230 "An Act authorizing the making of loans
for upgrade of commercial fishing tender vessels and gear."
IAN FISK, Staff to Representative Bill Thomas, Alaska State
Legislature, said commercial fishermen have access to a
revolving loan fund. The fund is in the Department of Commerce,
and it enables fishermen to borrow money to purchase permits,
boats, and for product quality improvement. The program
encourages Alaska ownership of the industry by limiting the
loans to residents. Fish tender owners do not currently have
access to the loan, but HB 230 will change that for product
quality upgrades. Companies can apply for the loans, but all of
the owners must be qualified Alaska residents.
CO-CHAIR SAMUELS asked if all the shareholders of a corporation
have to qualify as residents.
MR. FISK said that was the way he understood it.
REPRESENTATIVE CRAWFORD asked where the loan money came from.
MR. FISK said it was initially capitalized with state funds in
the 1970s, and it has not gotten any general funds since 1985.
It is a self-sustaining revolving fund, he said, and it covers
the cost of the operations as well. He added that the program
has helped a lot of fishermen over the years. He predicts four
or five loans to tender operators per year.
REPRESENTATIVE GATTO asked about the program's success rate.
MR. FISK deferred to the fund managers.
REPRESENTATIVE LEDOUX speculated that tendering may be less
risky financially than fishing.
MR. FISK said perhaps it is less risky because tenders usually
get a fixed daily rate; however, some operate on a percentage.
2:09:15 PM
JASON KOONTZ, Homer, said he is a new owner of a fishing tender,
and HB 230 looks good, but he would like it to include loans for
refinancing or purchasing vessels. The borrowers could use
refinance money to upgrade their vessels, he said, but it is a
great bill and a good step forward. He said the money should
stay in the fund and not go to the general fund, especially
since the salmon fisheries are rebounding.
2:10:53 PM
JERRY MCCUNE, Cordova District Fishermen United, Juneau, said
fishermen all over the state depend on tenders--they are a big
part of the operation. There are some tender operators who do
not have fishing permits, so HB 230 makes the whole industry
eligible to access the loan fund.
2:12:12 PM
REPRESENTATIVE GATTO said he has only known one tender owner and
he was outrageously wealthy.
MR. MCCUNE said some big king crabbers tender in the summer and
don't need loans, but there are small independent operators.
REPRESENTATIVE GATTO asked if it was the same risk as fishing.
2:13:25 PM
MR. MCCUNE said tenders have the same risk if there is no
season, but tenders sign contracts, which is less risky than
agreeing to a percentage. The daily rate may be used for a
small sockeye fishery, he said. He stated that tender operators
with fishing permits already have access to the loan program.
REPRESENTATIVE KAPSNER said there were once tender boats on the
Kuskokwim River, and they did not make a lot of money.
2:15:04 PM
REPRESENTATIVE LEDOUX said Representative Seaton owns tenders.
REPRESENTATIVE SEATON said he was not the guy that
Representative Gatto was thinking of. There are different
tender operations in each area of the state, he said. Some
tenders haul big volumes of low-value fish. There is a category
of tender owners who are the poorest of the poor, he noted.
They don't have the money to buy a fishing permit so they get an
old boat, a cannery may provide the fuel, and they become small-
scale tenders. The cheaper boats often don't have good
refrigeration systems, and the bill will help with those
upgrades. Representative Seaton declared a conflict of interest
because he has four tenders.
CO-CHAIR SAMUELS acknowledged Representative Seaton's conflict
of interest but required him to vote.
2:17:47 PM
GREG WINEGAR, Director, Division of Investments, Department of
Commerce, Community, & Economic Development, said the total that
has gone into the loan fund is $60 million, and the last
appropriation from the state was in 1985. He noted that $84
million have been transferred back out of the fund to the
general fund or to other programs. The program has made about
$373 million in loans, and there are about $100 million on the
books. It is completely revolving, and as a loan is repaid it
goes back into the fund and also covers all operating expenses.
2:20:01 PM
REPRESENTATIVE CRAWFORD asked if the loan fund is protected.
MR. WINEGAR said the fund is completely protected and separate.
REPRESENTATIVE SEATON noted Mr. McCune's testimony that tenders
who fish can get loans.
MR. WINEGAR said there are some fishermen that also tender but
when they come in for loans, the loans are for their fishing
vessels, not for their tenders. This bill will make it clear
that money can be borrowed for a tender, he added.
2:21:17 PM
REPRESENTATIVE SEATON said he wanted to keep that clear.
Tendering and fishing are different operations.
REPRESENTATIVE GATTO asked what the default rate is and if boats
are used for collateral.
MR. WINEGAR said the program has foreclosed and taken vessels,
but it is a last resort. The fund's default rate is 9.8 percent
for the total program, but only 7.0 percent for the product
quality upgrade loans. It is probably higher than a home loan
program because of the higher risks, and many borrowers don't
qualify for conventional bank loans.
2:22:42 PM
REPRESENTATIVE ELKINS moved to report HB 230, version 24-
LS0801\G, out of committee with individual recommendations and
the accompanying fiscal notes. There being no objection, HB 230
was passed from the House Resources Standing Committee.
ADJOURNMENT
There being no further business before the committee, the House
Resources Standing Committee meeting was adjourned at 2:25 PM.
| Document Name | Date/Time | Subjects |
|---|