Legislature(2005 - 2006)CAPITOL 124

04/10/2006 01:00 PM House RESOURCES


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Meeting Postponed to 1:30 PM Today--
+ Bills Previously Heard/Scheduled TELECONFERENCED
= HB 304 COMMERCIAL FISHING LOAN PROGRAM
Moved CSHB 304(RES) Out of Committee
= HB 464 WANTON WASTE OF BIG GAME
Moved CSHB 464(RES) Out of Committee
                    ALASKA STATE LEGISLATURE                                                                                  
               HOUSE RESOURCES STANDING COMMITTEE                                                                             
                         April 10, 2006                                                                                         
                           1:38 p.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Jay Ramras, 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                                                                                                                
                                                                                                                                
Representative Ralph Samuels, Co-Chair                                                                                          
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 304                                                                                                              
"An Act relating to the commercial fishing loan program; and                                                                    
providing for an effective date."                                                                                               
                                                                                                                                
     - MOVED CSHB 304(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
HOUSE BILL NO. 464                                                                                                              
"An Act relating to the possession of the edible meat of big                                                                    
game animals."                                                                                                                  
                                                                                                                                
     - MOVED CSHB 464(RES) OUT OF COMMITTEE                                                                                     
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 304                                                                                                                  
SHORT TITLE: COMMERCIAL FISHING LOAN PROGRAM                                                                                    
SPONSOR(s): REPRESENTATIVE(s) COGHILL                                                                                           
                                                                                                                                
05/07/05       (H)       READ THE FIRST TIME - REFERRALS                                                                        
05/07/05       (H)       FSH, RES, FIN                                                                                          
03/22/06       (H)       FSH AT 8:30 AM CAPITOL 124                                                                             
03/22/06       (H)       Moved CSHB 304(FSH) Out of Committee                                                                   
03/22/06       (H)       MINUTE(FSH)                                                                                            
03/24/06       (H)       FSH RPT CS(FSH) 2DP 3NR                                                                                
03/24/06       (H)       DP: ELKINS, THOMAS;                                                                                    
03/24/06       (H)       NR: HARRIS, KAPSNER, WILSON                                                                            
04/03/06       (H)       RES AT 2:00 PM CAPITOL 124                                                                             
04/03/06       (H)       Heard & Held                                                                                           
04/03/06       (H)       MINUTE(RES)                                                                                            
                                                                                                                                
BILL: HB 464                                                                                                                  
SHORT TITLE: WANTON WASTE OF BIG GAME                                                                                           
SPONSOR(s): REPRESENTATIVE(s) CROFT                                                                                             
                                                                                                                                
02/13/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/13/06       (H)       RES, JUD                                                                                               
04/05/06       (H)       RES AT 1:00 PM CAPITOL 124                                                                             
04/05/06       (H)       Heard & Held                                                                                           
04/05/06       (H)       MINUTE(RES)                                                                                            
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
RYNNIEVA MOSS, Staff                                                                                                            
to Representative John Coghill                                                                                                  
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented HB 304 on behalf of Representative                                                                
Coghill, sponsor.                                                                                                               
                                                                                                                                
GREG WINEGAR, Director                                                                                                          
Division of Investments                                                                                                         
Department of Commerce, Community, & Economic Development                                                                       
POSITION STATEMENT: Answered questions regarding HB 304.                                                                        
                                                                                                                                
LEA KLINGERT, President                                                                                                         
Alaska Commercial Fishing and Agriculture Bank (CFAB)                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Answered questions regarding HB 304.                                                                        
                                                                                                                                
REPRESENTATIVE ERIC CROFT                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Presented HB 464 as sponsor.                                                                                
                                                                                                                                
RON SOMERVILLE, Vice Chair                                                                                                      
Board of Game                                                                                                                   
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 464.                                                                             
                                                                                                                                
MATT ROBUS, Director                                                                                                            
Wildlife Conservation                                                                                                           
Alaska Department of Fish & Game                                                                                                
POSITION STATEMENT: Answered questions regarding HB 464.                                                                        
                                                                                                                                
ROD ARNO                                                                                                                        
Alaska Outdoor Council                                                                                                          
Palmer, Alaska                                                                                                                  
POSITION STATEMENT: Testified in support of HB 464.                                                                             
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
CO-CHAIR  JAY   RAMRAS  called   the  House   Resources  Standing                                                             
Committee  meeting  to  order at  1:38:44  PM.    Representatives                                                             
Ramras, Elkins,  Crawford, Seaton, Olson, and  Gatto were present                                                               
at the call to order.   Representative Kapsner and LeDoux arrived                                                               
as the meeting was in progress.                                                                                                 
                                                                                                                                
HB 304-COMMERCIAL FISHING LOAN PROGRAM                                                                                        
                                                                                                                                
CO-CHAIR RAMRAS announced that the  first order of business would                                                               
be  HOUSE  BILL NO.  304,  "An  Act  relating to  the  commercial                                                               
fishing loan program; and providing for an effective date."                                                                     
                                                                                                                                
RYNNIEVA  MOSS,  Staff  to Representative  John  Coghill,  Alaska                                                               
State Legislature,  presented HB 304 on  behalf of Representative                                                               
Coghill, Sponsor.                                                                                                               
                                                                                                                                
1:40:08 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS said version L was before the committee.                                                                        
                                                                                                                                
MS. MOSS said it was discussed but not adopted.                                                                                 
                                                                                                                                
REPRESENTATIVE  SEATON noted  that  Version L  was  adopted as  a                                                               
working  document.    He  said Co-Chair  Samuels  brought  up  an                                                               
amendment in the last committee and it may have been adopted.                                                                   
                                                                                                                                
MS. MOSS said it was discussed, but no amendments passed.                                                                       
                                                                                                                                
REPRESENTATIVE   SEATON  suggested   offering  Co-Chair   Samuels                                                               
amendment as Amendment 5.                                                                                                       
                                                                                                                                
REPRESENTATIVE  GATTO moved  Amendment  1,  as follows  [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 2, line 8:                                                                                                            
                                                                                                                                
     Delete:                                                                                                                    
                                                                                                                                
     "other recognized commercial lending institutions,"                                                                        
                                                                                                                                
     Insert:                                                                                                                    
                                                                                                                                
     A  state   financial  institution  as  defined   in  AS                                                                  
     06.01.050(3),    a     federally-chartered    financial                                                                  
     institution,    or   the    Commercial   Fishing    and                                                                  
     Agricultural Bank,                                                                                                       
                                                                                                                                
                                                                                                                                
REPRESENTATIVE ELKINS objected.                                                                                                 
                                                                                                                                
MS. MOSS  said Amendment 1  resulted from  Representative Gatto's                                                               
concern that a financial institution  was not adequately defined.                                                               
She  said that  Mark  Davis, Director,  Division  of Banking  and                                                               
Securities, agreed and suggested the amendment language.                                                                        
                                                                                                                                
Hearing no further objections, Amendment 1 carried.                                                                             
                                                                                                                                
REPRESENTATIVE SEATON  offered Amendment  2 as  follows [original                                                               
punctuation provided]:                                                                                                          
                                                                                                                                
     Page 5, line 24                                                                                                            
                                                                                                                                
     Delete "$335,000"                                                                                                          
                                                                                                                                
     Insert "$400,000"                                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO objected.                                                                                                  
                                                                                                                                
REPRESENTATIVE  SEATON  explained   that  there  are  outstanding                                                               
loans,  including  at least  five  from  his district,  that  are                                                               
between  $335,000  and $400,000,  "and  this  is the  refinancing                                                               
portion."   He said there  is only  one outstanding loan  that is                                                               
above that, but it  has been "paid down to that  level."  He said                                                               
making the  loan limit $400,000  "would allow the  refinancing of                                                               
the  traditional  amounts   here  that  have  been   used  in  my                                                               
district."  He noted that it  is still quite a reduction from the                                                               
current  limit  of  $630,000.   He  said  quota,  community,  and                                                               
product quality  loans used to  be excluded from the  limit, "and                                                               
now we are  including those in the refinance  amount, so dropping                                                               
this  refinance amount  to $335,000  and including  all of  those                                                               
different  portions, which  used  to be  outside, would  severely                                                               
restrict the program."                                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO asked how $400,000 came about.                                                                             
                                                                                                                                
1:45:35 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON  said there  are  five  loans out  in  his                                                               
district  that are  between $335,000  and $400,000  and only  one                                                               
above that.   The  bill will still  present a  severe restriction                                                               
but will maintain the majority of current loans in his district.                                                                
                                                                                                                                
REPRESENTATIVE GATTO withdrew his objection.                                                                                    
                                                                                                                                
MS.  MOSS  said  Representative Coghill  opposes  the  amendment,                                                               
"because the whole genesis of this  bill was to determine how far                                                               
in debt  you want somebody  to go before  they drown."   She said                                                               
loans can be up to $630,000,  and "refinancing is already in this                                                               
bill  limited to  $200,000, and  the $335,000,  we don't  believe                                                               
really  affects  any existing  loans  because  of the  fact  that                                                               
refinancing is  limited to $200,000  already."  However,  he will                                                               
go with what the committee decides, she stated.                                                                                 
                                                                                                                                
REPRESENTATIVE SEATON said it is  his understanding that a number                                                               
of different loans will now be included in the total limit.                                                                     
                                                                                                                                
CO-CHAIR  RAMRAS asked  about borrowers  currently above  the new                                                               
limit.                                                                                                                          
                                                                                                                                
1:48:05 PM                                                                                                                    
                                                                                                                                
GREG WINEGAR,  Director, Division  of Investments,  Department of                                                               
Commerce, Community,  & Economic Development, said  there are six                                                               
borrowers who have loans of  over $335,000, and those individuals                                                               
will be grandfathered in.   He said the attorney general's office                                                               
said that if interest rates  decline, these six individuals would                                                               
not be able  to refinance, but the loans would  not become due as                                                               
a result of the legislation.                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  asked Mr.  Winegar to explain  the impacts                                                               
of the aggregation of different loans.                                                                                          
                                                                                                                                
MR.   WINEGAR  said   part  of   the  statute,   called  external                                                               
refinancing, allows  borrowers to  refinance existing  loans from                                                               
other lenders.   He said  this bill  will reduce that  limit from                                                               
[$300,000  to  $200,000].    The  $335,000  limit  relates  to  a                                                               
combination of  all of these  various loans.  Under  the existing                                                               
statute, the  combination of loans  are limited to  $930,000, and                                                               
that would be reduced to $335,000  under this bill.  There are no                                                               
borrowers  even close  to  the current  limit,  but legally  they                                                               
could  be.   He  said  each borrower  would  have to  demonstrate                                                               
adequate collateral and the capacity for repayment.                                                                             
                                                                                                                                
REPRESENTATIVE KAPSNER  asked if  any borrowers are  "drowning in                                                               
debt."                                                                                                                          
                                                                                                                                
1:51:10 PM                                                                                                                    
                                                                                                                                
MR. WINEGAR  said he  would not use  that terminology,  but there                                                               
have been unanticipated difficulties.   The Division has a lot of                                                               
latitude to  work with those  individuals, but  delinquency rates                                                               
are down "in the 5 percent range."                                                                                              
                                                                                                                                
REPRESENTATIVE  SEATON  said  the   loans  include  quota  share,                                                               
vessel,  and permit  loans, and  the  limit is  on the  aggregate                                                               
amount.  The [limits might be reached]  if there is a drop in the                                                               
interest  rates and  "somebody has  $380,000 in  loans that  they                                                               
would  like to  refinance at  a lower  interest rate.   All  of a                                                               
sudden we're  saying, 'Oh  we're going  to keep  you at  the high                                                               
interest rate and not allow you to refinance.'"                                                                                 
                                                                                                                                
REPRESENTATIVE  CRAWFORD  asked  about  the  refinance  limit  of                                                               
$200,000 and if the amendment would change it to $400,000.                                                                      
                                                                                                                                
1:53:27 PM                                                                                                                    
                                                                                                                                
MR.  WINEGAR  said there  are  two  types  of refinancing.    The                                                               
$200,000 limit refers  to an external refinance,  where the state                                                               
offers refinancing to  an individual who has a  loan from another                                                               
lender.   Another  type  just allows  any  borrower to  refinance                                                               
their loans internally.  If  those borrowers were over the limit,                                                               
they  are the  ones who  could  not refinance  if interest  rates                                                               
decline.  If someone had  an external refinance of $200,000, that                                                               
would also  count against the  $335,000 limit,  he said.   "It is                                                               
the  combination of  all of  those loans  that would  need to  be                                                               
under $335,000, or $400,000 as proposed in the amendment."                                                                      
                                                                                                                                
1:54:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said  quota share loans are  $20 per pound,                                                               
"so   you  don't   get  very   much  poundage   to  maintain   an                                                               
industry...so if you have an aggregate  of boat and quota loan at                                                               
$335,000, you basically  [are] saying we are going  to keep these                                                               
people  at an  uneconomic limit."   He  said the  state has  this                                                               
program to  keep Alaskans in  the industry, and  borrowers should                                                               
be allowed to refinance if interest rates fall.                                                                                 
                                                                                                                                
REPRESENTATIVE GATTO  asked about  page 5, line  21, and  if (C),                                                               
(D), and  (F) amount to  about $65,000.  He  asked Representative                                                               
Seaton if  his intent was  to include  that amount in  the total,                                                               
thereby raising it to $400,000.                                                                                                 
                                                                                                                                
1:55:50 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON said  it depends  on personal  needs.   He                                                               
said (C)  is quota share  loans, which  could be the  $400,000 in                                                               
itself.  "This  is an aggregated amount of  $400,000, which isn't                                                               
very  much  to  have  your entire  fishing  operation,  including                                                               
quota,  boat,   permits,  everything.    Previously   those  were                                                               
excluded  and now  they  are being  included  in this  aggregated                                                               
amount."   Mr. Winegar just  testified that the current  limit is                                                               
$930,000, and  the amendment  allows it to  go down  to $400,000.                                                               
He said  going below an  amount that several borrowers  are above                                                               
and who  wouldn't be able  to refinance,  doesn't seem to  be the                                                               
spirit of the program.                                                                                                          
                                                                                                                                
REPRESENTATIVE GATTO asked what (D) and (F) constitute.                                                                         
                                                                                                                                
MR. WINEGAR said  (C) is quota shares, (D) is  the tax obligation                                                               
loans,  and (E)  is  the community  quota  entity program,  which                                                               
doesn't equate to individual borrowers-it  is a separate program.                                                               
He said (F)  is for product quality  improvements for processors.                                                               
Current statute excludes  all of those things, he  noted, but the                                                               
bill is limiting all loans added together.                                                                                      
                                                                                                                                
REPRESENTATIVE CRAWFORD asked what the highest loan is.                                                                         
                                                                                                                                
1:58:51 PM                                                                                                                    
                                                                                                                                
MR. WINEGAR said the balance for that person is $530,000.                                                                       
                                                                                                                                
REPRESENTATIVE CRAWFORD  said the logic  is if others  could come                                                               
in and  refinance, that person could  too.  He said  this program                                                               
has served the community well.                                                                                                  
                                                                                                                                
REPRESENTATIVE  KAPSNER  suggested  an amendment  to  grandfather                                                               
current borrowers and allow them to refinance.                                                                                  
                                                                                                                                
MS. MOSS  said she has  not heard this discussion.   "Considering                                                               
the fact that you are including  more loan programs in the limit,                                                               
I  don't  think Representative  Coghill  would-I  think he  would                                                               
change his position on the $400,000."                                                                                           
                                                                                                                                
2:00:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  removed his objection.   Hearing no further                                                               
objections, Amendment 2 carried.                                                                                                
                                                                                                                                
REPRESENTATIVE SEATON said Amendment 3  is not being offered.  He                                                               
offered Amendment 4 as follows [original punctuation provided]:                                                                 
                                                                                                                                
     Page 4, line 31-Page 5, line 2                                                                                             
                                                                                                                                
     Delete all revised language                                                                                                
                                                                                                                                
     (2)  may not  bear interest  exceeding [the  prime rate                                                                  
     plus  two  percentage  points;  for  purposes  of  this                                                                  
     paragraph.  "prime rate"  has the  meaning given  in AS                                                                  
     44.88.599;]                                                                                                              
                                                                                                                                
     Insert existing statutory language to read:                                                                                
                                                                                                                                
     (2) may not bear interest exceeding 10 ½ percent;                                                                        
                                                                                                                                
REPRESENTATIVE GATTO objected.                                                                                                  
                                                                                                                                
2:01:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON said  HB 304  eliminates the  10.5 percent                                                               
cap on interest rates, and this amendment retains that cap.                                                                     
                                                                                                                                
MS. MOSS said Representative Coghill  thinks the state is already                                                               
subsidizing  these  clients because  many  elements  of the  loan                                                               
program  can freeze  interest  or  allow more  time  to pay  back                                                               
debts.  If  the state is in the lending  business, it should have                                                               
the same  flexibility as  any other  financial institute  to base                                                               
interest rates  on prime rates.   She noted that these  are loans                                                               
of last resort,  and in the private sector, the  higher the risk,                                                               
the higher the interest--and interest rates are not going down.                                                                 
                                                                                                                                
2:02:44 PM                                                                                                                    
                                                                                                                                
MS. MOSS  said, in  response to Co-Chair  Ramras, that  the prime                                                               
rate is tied to the Wall Street Journal rate.                                                                                   
                                                                                                                                
CO-CHAIR RAMRAS  noted that the  federal prime rate is  five, but                                                               
current [commercial loans] are not at seven percent.                                                                            
                                                                                                                                
The committee took an at-ease from 2:03 p.m. to 2:07:36 PM.                                                                   
                                                                                                                                
CO-CHAIR  RAMRAS  said  if  the  federal fund  rate  is  at  five                                                               
percent,  the lowest  published  prime rate  may  be about  seven                                                               
percent, so the  prime plus two rate is about  4 points above the                                                               
"fed  rate."   He said  the program  has a  very low  delinquency                                                               
rate, and  the state,  by raising the  interest rate,  would earn                                                               
more in interest but risk more in delinquencies.                                                                                
                                                                                                                                
REPRESENTATIVE GATTO asked  if the 10.5 percent limit  is for the                                                               
borrower or the lender.                                                                                                         
                                                                                                                                
2:09:29 PM                                                                                                                    
                                                                                                                                
MS. MOSS said the lender can't charge more than 10.5 percent.                                                                   
                                                                                                                                
REPRESENTATIVE GATTO  said if prime  is seven, why  shouldn't the                                                               
state be  able to charge 11  percent interest?  That  is what the                                                               
free market would require, he stated.                                                                                           
                                                                                                                                
MR. WINEGAR  said current statute  restricts the rate  from being                                                               
over 10.5  percent.   He said  prime plus two  kicks in  until it                                                               
goes above 10.5.                                                                                                                
                                                                                                                                
REPRESENTATIVE  GATTO suggested  a halt  in providing  loans when                                                               
interest rates go beyond 10.5,  because someone could turn around                                                               
and sell the loan for 14 percent.                                                                                               
                                                                                                                                
CO-CHAIR RAMRAS surmised  that a loan couldn't be sold.   He said                                                               
his plumber  has a sub-prime  borrowing rate  from Key Bank  on a                                                               
line of  credit, which could be  prime minus 1.   Co-Chair Ramras                                                               
borrows  at  prime  plus  1  because  he  is  in  the  restaurant                                                               
business.  He said some corporations are "prime borrowers."                                                                     
                                                                                                                                
2:12:33 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked if the  state will give a 10.5 percent                                                               
loan when interest rates are 20 percent.                                                                                        
                                                                                                                                
MR. WINEGAR said under the existing statute, yes.                                                                               
                                                                                                                                
REPRESENTATIVE  GATTO said  it  would be  foolish  to not  borrow                                                               
money.                                                                                                                          
                                                                                                                                
MR. WINEGAR said if a  person met the eligibility requirement, he                                                               
or she would probably pursue that loan.                                                                                         
                                                                                                                                
REPRESENTATIVE SEATON  said to remember  the program  is designed                                                               
for mom  & pop  businesses, not  big corporations,  and borrowers                                                               
have to be rejected by a  commercial bank.  To maintain a diverse                                                               
industry with some  long term planning, interest  rates should be                                                               
dependable.   The borrowers are  "local coastal folks  that don't                                                               
have lots and  lots of assets."  The purpose  of the amendment is                                                               
to keep  people working and in  the industry and allow  them some                                                               
security, and it will set people  up to fail if interest rates go                                                               
up  to 17  percent.   He added  that the  borrower has  to be  an                                                               
Alaska resident and involved in the industry "for a while."                                                                     
                                                                                                                                
2:15:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO  said it  may not be  important to  know who                                                               
the borrower  is.  Every applicant,  rich or poor, has  a barrier                                                               
to  getting  the loan.    He  questioned  making loans  for  five                                                               
percentage points  less than  the market demands.   He  said, "If                                                               
indeed you  are a  small fisherman  and you  would like  to small                                                               
fish, well, in the existing market  it's too expensive to do it."                                                               
He said he  sees no logic besides,  "I'm a nice guy;  I'd like to                                                               
give cheaper loans than the free market."                                                                                       
                                                                                                                                
CO-CHAIR RAMRAS said  he has borrowed from AIDEA and  plans to do                                                               
so in the future.  He  said getting Alaskans access to capital is                                                               
A-OK with him.   The state has  money in its general  fund, so it                                                               
costs "zero" to loan money.   He added that the state cannot lose                                                               
money  by lending  money, but  it can  lose from  delinquency and                                                               
defaults.   He added that  by letting  the interest rates  go up,                                                               
the state risks high default rates.                                                                                             
                                                                                                                                
2:18:22 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked if the  same person is [getting] a new                                                               
loan every year.                                                                                                                
                                                                                                                                
REPRESENTATIVE  SEATON said  fishermen  will have  a  boat and  a                                                               
permit  and then  may diversify  when salmon  is down.   He  said                                                               
people  are not  eager  to  borrow at  prime  plus  two, and  the                                                               
division  requires  careful  scrutiny   of  the  borrower.    The                                                               
delinquency rate shows that the division  is doing a good job, he                                                               
stated, and  the program  makes money  every year.   It  has paid                                                               
back all of  the initial deposit and is now  paying dividends, he                                                               
said.                                                                                                                           
                                                                                                                                
REPRESENTATIVE GATTO spoke of secondary  education and farm loans                                                               
and asked if the interest rate cap is unique for state loans.                                                                   
                                                                                                                                
2:21:28 PM                                                                                                                    
                                                                                                                                
MS.  MOSS  said that  is  one  reason  the bill  was  introduced.                                                               
Representative  Coghill  wanted  to  eliminate  the  Division  of                                                               
Investment, but was  convinced by Mr. Winegar  that [the program]                                                               
is  good for  fishermen  because  of the  ups  and  downs in  the                                                               
industry.   But  she thinks  he would  agree with  Representative                                                               
Gatto and said  there are "other provisions of  this loan program                                                               
that  aren't visible  in  this  bill that  draw  some concern  to                                                               
[Representative Coghill], and that is  that interest has been put                                                               
on a  freeze."  There  are special conditions given  to fishermen                                                               
that wouldn't be in any other state loan program, she stated.                                                                   
                                                                                                                                
2:22:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  CRAWFORD  asked  if the  Commercial  Fishing  and                                                               
Agriculture Bank (CFAB) has a cap.                                                                                              
                                                                                                                                
LEA   KLINGERT,   President,   Alaska  Commercial   Fishing   and                                                               
Agriculture  Bank, said  CFAB loans  are at  a variable  interest                                                               
rate that is  not tied to prime  but to an internal base.   It is                                                               
on a floating rate  called base plus two.  Right  now the base is                                                               
6.5 percent, and she said it fluctuates.                                                                                        
                                                                                                                                
2:24:39 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SEATON said  this  [loan program]  is not  giving                                                               
credits  like the  state provides  to mining  or oil  industries.                                                               
"This isn't a tax credit...it is  capping an interest rate, so we                                                               
are making money on all these  loans."  There is nothing for free                                                               
but it helps keep people in  the industry, he said.  This program                                                               
works  for maintaining  Alaska businesses  here and  does a  good                                                               
job.                                                                                                                            
                                                                                                                                
REPRESENTATIVE GATTO  said he  doesn't have  a problem  with that                                                               
but  is concerned  with  "the inherent  unfairness  of bona  fide                                                               
opportunity for  one group at  the expense to every  single other                                                               
group."   He said he  hasn't heard of  a single other  group that                                                               
has a  cap on  interest rates.   He asked  to hear  the sponsor's                                                               
viewpoint.                                                                                                                      
                                                                                                                                
MS. MOSS  said Representative  Coghill is in  a meeting  and this                                                               
bill still has a hearing in the House Finance Committee.                                                                        
                                                                                                                                
REPRESENTATIVE SEATON  read from  the statutes and  said interest                                                               
on post secondary loans may not exceed 8.25 percent.                                                                            
                                                                                                                                
2:27:56 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS  said he  is comfortable  with the  House Finance                                                               
Committee  looking  at   it.    A  roll  call   vote  was  taken.                                                               
Representatives  Crawford,  Ramras,  Olson,  Seaton,  and  Elkins                                                               
voted  in  favor of  Amendment  4.   Representative  Gatto  voted                                                               
against it.  Therefore, Amendment 4 carried by a vote of 5-1.                                                                   
                                                                                                                                
2:30:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON moved to report  CSHB 304(FSH), as amended,                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying fiscal notes.  Hearing  no objections, CSHB 304(RES)                                                               
was passed  out of the  House Resources Standing Committee.   [At                                                               
the end of the meeting Representative  Seaton noted that he is in                                                               
the fishing industry but he has never had a state loan.]                                                                        
                                                                                                                                
2:31:10 PM                                                                                                                    
                                                                                                                                
HB 464-WANTON WASTE OF BIG GAME                                                                                               
                                                                                                                                
CO-CHAIR RAMRAS announced that the  final order of business would                                                               
be HOUSE BILL NO. 464, "An  Act relating to the possession of the                                                               
edible meat of big game animals."                                                                                               
                                                                                                                                
REPRESENTATIVE  ERIC CROFT,  Alaska  State Legislature,  Sponsor,                                                               
suggested adopting  Version L, which provides  the most deference                                                               
to the Board of Game in regulating wanton waste of big game.                                                                    
                                                                                                                                
REPRESENTATIVE CRAWFORD  moved to adopt the  committee substitute                                                               
(CS)  for  HB 464,  24-LS1258\L,  Kane,  4/5/06, as  the  working                                                               
document.    Hearing no  objections,  Version  L was  before  the                                                               
committee.                                                                                                                      
                                                                                                                                
2:32:41 PM                                                                                                                    
                                                                                                                                
RON SOMERVILLE, Vice Chair, Board  of Game, said the bill attacks                                                               
a major problem  in the state, and  he noted that at  a the Board                                                               
of Game meeting  in Kotzebue residents expressed  strong views on                                                               
the wanton waste  of game by sport hunters.   He spoke of support                                                               
for regulating  transporters to  abide by  standards and  laws or                                                               
lose privileges, an effort which has  begun in one unit, but only                                                               
by providing  information.   He said  Representative Croft  has a                                                               
novel idea in  HB 464, and it would give  the board another tool,                                                               
but making  it statewide would  create an  enforcement nightmare.                                                               
The  bill is  pointed directly  at trophy  hunting, but  it could                                                               
affect others "who may not qualify for a Boone and Crocket."                                                                    
                                                                                                                                
2:36:36 PM                                                                                                                    
                                                                                                                                
MR.  SOMERVILLE  said the  board  should  look favorably  at  the                                                               
legislation.   He said  page 1,  line 6,  is consistent  with the                                                               
sponsor's intent,  but he  suggested inserting  "minimum" between                                                               
"the" and "salvage".                                                                                                            
                                                                                                                                
2:38:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE GATTO asked for a definition of big game.                                                                        
                                                                                                                                
MR.  SOMERVILLE said  the board  has the  authority to  establish                                                               
that definition if there is any question about it.                                                                              
                                                                                                                                
REPRESENTATIVE GATTO noted the language  pertaining to the trophy                                                               
of  an  animal   that  "that  person  killed."     He  asked  the                                                               
consequences of  someone else killing  the animal.   He suggested                                                               
rewording the bill to say it doesn't matter who killed it.                                                                      
                                                                                                                                
2:41:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said the person who  gets legal possession                                                               
of the horns is the hunter.                                                                                                     
                                                                                                                                
MATT  ROBUS, Director,  Wildlife Conservation,  Alaska Department                                                               
of Fish & Game, said  someone carrying around someone else's meat                                                               
would need a note from the  hunter, "otherwise you already have a                                                               
legal problem."                                                                                                                 
                                                                                                                                
REPRESENTATIVE GATTO said he wants the bill to be bullet-proof.                                                                 
                                                                                                                                
2:44:07 PM                                                                                                                    
                                                                                                                                
MR. SOMERVILLE  said a person  who does not lawfully  possess the                                                               
animal cannot transfer it, and he thinks the language is fine.                                                                  
                                                                                                                                
ROD ARNO,  Alaska Outdoor Council, said  he is a big  game guide.                                                               
He thanked  Representative Croft for  introducing HB 464,  but he                                                               
said it is  an enforcement issue, and wildlife  enforcement is on                                                               
the  decline.    He  noted   that  were  118  fish  and  wildlife                                                               
protection  officers  25  years   ago  when  there  were  500,000                                                               
Alaskans; now  there are  only 84 officers  with a  population of                                                               
over 650,000 residents.   He spoke of the lack  of enforcement in                                                               
the  field, "nor  do we  have the  wildlife investigation  bureau                                                               
spending their  time to  pursue the complaints."   Air  taxis and                                                               
others  are  aware  that  prosecutions  aren't  taking  place  so                                                               
violations of the  wanton waste laws are increasing,  and he said                                                               
the problem is Section 16.30.017.   "The three defenses they have                                                               
there, they're not even applicable."   He said a stolen animal is                                                               
likely regulated elsewhere  [in statute].  The  second defense of                                                               
weather  and acts  of  god  causing loss  of  meat  is no  longer                                                               
appropriate  because of  satellite phones  and other  technology;                                                               
"it is the  hunter's choice whether or not that  game is lost due                                                               
to  weather."   He  said  with electric  fences,  the defense  of                                                               
losing meat to a wild animal "is the hunter's choice."                                                                          
                                                                                                                                
2:47:56 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS noted that Version L is before the committee.                                                                   
                                                                                                                                
MR.  ARNO  said   Version  L  will  "negate   what's  already  in                                                               
16.30.017, when if  you really wanted to correct  this problem of                                                               
wanton  waste  without  reducing  the  minimum  that  people  are                                                               
responsible for,  I think it'd be  better to go ahead  and delete                                                               
16.30.017, as opposed to creating another statute."                                                                             
                                                                                                                                
2:48:46 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CROFT said  he agrees it is  an enforcement issue,                                                               
and  the purpose  was to  give a  flexible tool  to the  Board of                                                               
Game, which  would have  "the ability  to adopt  regulations that                                                               
say, 'we  don't care about  an act  of god, these  minimums apply                                                               
regardless.'"  He said he  agrees with Mr. Arno, and "eliminating                                                               
the defenses  in regards to whether  or not you keep  your trophy                                                               
horns is one thing, eliminating  the defense from complete wanton                                                               
waste, where somebody really did get  stuck out for an extra week                                                               
and the penalties are jail or losing  a boat or losing a plane, I                                                               
just  wasn't comfortable  with.   So  I wanted  this medium  step                                                               
where we  would eliminate the  defenses."   He said bears  do eat                                                               
game, but it  probably happens a lot less than  claimed, and this                                                               
"middle ground" is  where getting rid of these  defenses could be                                                               
tested.   If a hunter  claims a bear or  an act of  god destroyed                                                               
the meat, "we  may not be able  to throw you in jail,  but we can                                                               
say  you just  don't get  to keep  the horns  no matter  what the                                                               
excuse."  The board would have that authority, he said.                                                                         
                                                                                                                                
2:50:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON said he is  trying to understand Mr. Arno's                                                               
concern that Version  L doesn't eliminate the  defenses listed in                                                               
statute.  He  asked if the bill  will give the Board  of Game the                                                               
authority to make regulations or  if the statute will still allow                                                               
the same defenses.                                                                                                              
                                                                                                                                
2:52:29 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CROFT said all the  defenses to wanton waste would                                                               
still apply  and the entire  structure is held, but  in addition,                                                               
the Board  of Game  may establish  a minimum  salvage requirement                                                               
applicable only to keeping the horns.   There are a lot of people                                                               
who  lie,  but  to  throw  the full  impact  of  a  wanton  waste                                                               
prosecution when  the truth is not  known, "I wasn't ready  to do                                                               
that."    The  forfeiture  of  the horns  is  a  lower  level  of                                                               
prosecution when it  is not practicable to prove  right or wrong.                                                               
If a hunters comes out of  the field with three caribou [antlers]                                                               
and one bag  of meat, "in this  state you just don't  get to keep                                                               
them."  It is not just out-of-state hunters, he noted.                                                                          
                                                                                                                                
2:54:41 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE LEDOUX said she likes  the bill because it reminds                                                               
her of  the excuse of  "a dog eating  your homework; you  may not                                                               
get  expelled from  school, but  you  don't get  credit for  your                                                               
homework, and that is sort of what this bill is doing."                                                                         
                                                                                                                                
REPRESENTATIVE SEATON  asked if automatic forfeiture  would apply                                                               
to a person who doesn't have lawful possession.                                                                                 
                                                                                                                                
REPRESENTATIVE CROFT said the hunter  has legal possession of the                                                               
trophy once  the animal is  shot.  So the  Board of Game  will be                                                               
authorized to determine that the  hunter does not have possession                                                               
until the meat is salvaged.                                                                                                     
                                                                                                                                
2:56:28 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE ELKINS asked about bears.                                                                                        
                                                                                                                                
REPRESENTATIVE  CROFT  said he  considered  hides,  but the  main                                                               
problem is wasting the meat of big game animals.                                                                                
                                                                                                                                
2:57:00 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS said he wants  to makes sure that the misdemeanor                                                               
charge remains intact.  He asked about amendments.                                                                              
                                                                                                                                
REPRESENTATIVE SEATON offered conceptual  Amendment 1 which would                                                               
insert "minimum" on  page 1, line 6, between the  words "the" and                                                               
"salvage".  Hearing no objections, Amendment 1 carried.                                                                         
                                                                                                                                
REPRESENTATIVE SEATON offered Amendment  2, which was written and                                                               
presented by Mr. Somerville [original punctuation provided]:                                                                    
                                                                                                                                
        Sec. 2. AS 16.30.012 is amended by adding a new                                                                         
     subsection to read:                                                                                                        
                                                                                                                                
          (c) The Board of Game may adopt regulations for                                                                       
     specific areas of  the state setting, for  any big game                                                                    
     animal, the minimum amount of  edible meat that must be                                                                    
     possessed  by a  hunter  who possesses  the antlers  or                                                                    
     horns of the big game animal.                                                                                              
                                                                                                                                
                                                                                                                                
Hearing no objections, Amendment 2 carried.                                                                                     
                                                                                                                                
2:58:36 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS  asked if, with these  amendments, Mr. Somerville                                                               
thinks the intent of the bill is adequately addressed.                                                                          
                                                                                                                                
MR. SOMERVILLE said  it does, and the sponsor can  speak to that.                                                               
He said  the bill  is meant  to reduce the  wanton waste  that is                                                               
currently not enforceable.                                                                                                      
                                                                                                                                
REPRESENTATIVE SEATON  asked if the bill  should include language                                                               
specifying  that the  Board of  Game may  establish criteria  for                                                               
forfeiture  of horns.    He  doesn't think  the  bill gives  that                                                               
authority to the board or to ADF&G.                                                                                             
                                                                                                                                
MR. ROBUS suggested  asking a law enforcement  specialist, but he                                                               
stressed  that the  issue is  a huge  problem in  reality and  in                                                               
perception for the Alaskan bush.                                                                                                
                                                                                                                                
3:00:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON  said he would  like to offer  an amendment                                                               
along  those  lines,  and  he asked  who  would  establish  those                                                               
criteria, the department, the board, or the legislature.                                                                        
                                                                                                                                
MR.  ROBUS said  there  are other  departments  involved in  this                                                               
legislation, and he is unclear on how it should be done.                                                                        
                                                                                                                                
3:01:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GATTO suggested  substituting  "legally taken  by                                                               
the hunter" on line 5, [to eliminate a loophole].                                                                               
                                                                                                                                
MR.  ROBUS said  the  language  clearly assigns  an  animal to  a                                                               
person who is  responsible for salvaging the meat,  but he warned                                                               
that he is not an attorney.                                                                                                     
                                                                                                                                
3:02:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SEATON offered conceptual Amendment 3 as follows:                                                                
                                                                                                                                
          The Board of Game may establish criteria for                                                                          
    forfeiture   of   horns    if   the   minimum   salvage                                                                     
     requirements are not met.                                                                                                  
                                                                                                                                
REPRESENTATIVE GATTO objected.                                                                                                  
                                                                                                                                
REPRESENTATIVE CROFT said Amendment 3 follows his intent.                                                                       
                                                                                                                                
MR. SOMERVILLE  said it  is a  good amendment  and noted  that an                                                               
animal not legally taken is owned by the State of Alaska.                                                                       
                                                                                                                                
REPRESENTATIVE  GATTO   asked  if   the  term   "minimum  salvage                                                               
requirement" is in regulation as a percentage of an animal.                                                                     
                                                                                                                                
MR. ROBUS  said the minimum  is different for  different species,                                                               
but there are regulatory definitions.                                                                                           
                                                                                                                                
3:05:22 PM                                                                                                                    
                                                                                                                                
CO-CHAIR RAMRAS noted that Amendment  2 should allow the board to                                                               
establish the minimum amount of edible meat in possession.                                                                      
                                                                                                                                
REPRESENTATIVE GATTO removed his objection.                                                                                     
                                                                                                                                
Seeing no further objections, conceptual Amendment 3 carried.                                                                   
                                                                                                                                
REPRESENTATIVE  SEATON moved  to report  the CS  for HB  464, 24-                                                               
LS1258\L,  Kane,  4/5/06,  as  amended,  out  of  committee  with                                                               
individual  recommendations and  the  accompanying fiscal  notes.                                                               
Hearing no objections CSHB 464(RES) passed out of committee.                                                                    
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
There being no  further business before the  committee, the House                                                               
Resources Standing Committee meeting was adjourned at 3:07 PM.                                                                

Document Name Date/Time Subjects