SENATE RESOURCES COMMITTEE April 19, 2000 3:19 p.m. MEMBERS PRESENT Senator Rick Halford, Chairman Senator Jerry Mackie Senator Lyda Green Senator Georgianna Lincoln MEMBERS ABSENT Senator Robin Taylor, Vice Chairman Senator Pete Kelly Senator Sean Parnell COMMITTEE CALENDAR HOUSE BILL NO. 238 "An Act establishing a federal tax obligation loan program under the commercial fishing loan program." -MOVED HB 238 OUT OF COMMITTEE PREVIOUS SENATE COMMITTEE ACTION HB 238 - No previous Senate action. WITNESS REGISTER Representative Mary Kapsner Alaska State Capitol Juneau, Alaska 99801-1182 POSITION STATEMENT: Sponsor of HB 238 Mr. Terry Hoefferle Bristol Bay Native Association Box 310 Dillingham, AK 99576 POSITION STATEMENT: Supports HB 238 ACTION NARRATIVE TAPE 00-27, SIDE A Number 001 CHAIRMAN HALFORD called the Senate Resources Committee meeting to order at 3:19 p.m. Present were Senators Green, Mackie, Lincoln and Chairman Halford. The first order of business to come before the committee was HB 238. HB 238-TAX OBLIGATION LOAN PROGRAM FOR FISHERS REPRESENTATIVE MARY KAPSNER, sponsor of HB 238, explained the measure as follows. HB 238 would reinstate a widely supported, previously existing program to assist fishermen in paying back taxes. She favors the bill because when the IRS seizes a permit, it is under no obligation to sell it for the market value or to sell it to in-state residents. This program provides a $30,000 one-time loan at a 10.5 percent rate of return. CHAIRMAN HALFORD asked if the permit would be held as collateral for the loan. REPRESENTATIVE KAPSNER said that is correct. CHAIRMAN HALFORD asked if the permit can be borrowed on in any other way if it is a person's only asset. REPRESENTATIVE KAPSNER said it cannot. CHAIRMAN HALFORD said that is how this program differs from other situations in which people are behind in their tax obligations and would lose other property. In this case, the property that would be lost cannot be borrowed on because it is a limited entry permit. SENATOR GREEN asked if it can be sold. CHAIRMAN HALFORD said it can. He then took public testimony. MR. TERRY HOEFFERLE, Bristol Bay Native Association, said fishermen do not have income tax deductions withheld from their fishing pay. When April 15 comes, they are sometimes caught with a large tax bill. He believes this program will keep the IRS from taking action on limited entry permits. In Bristol Bay, many permits that were once held by local fishermen have left the region for one reason or another and every local permit helps the local economy. He urged committee members to pass HB 238. There being no further testimony, SENATOR MACKIE moved HB 238 from committee with individual recommendations. There being no objection, the motion carried. With no further business to come before the committee, CHAIRMAN HALFORD adjourned the meeting at 3:23 p.m.