Legislature(2017 - 2018)HOUSE FINANCE 519

03/16/2017 01:30 PM House FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed 10 min. After Recess --
Moved HB 56 Out of Committee
Moved CSHB 81(ENE) Out of Committee
Moved HB 106 Out of Committee
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 56                                                                                                             
     "An Act relating to limitations on certain commercial                                                                      
     fishing loans made by the Department of Commerce,                                                                          
     Community, and Economic Development."                                                                                      
4:58:17 PM                                                                                                                    
REPRESENTATIVE   DAN   ORTIZ,   SPONSOR,   reported   having                                                                    
previously presented the bill  to the committee. He reminded                                                                    
members that the bill raised  the potential loan amount from                                                                    
$300 thousand to $400 thousand  in the Fishermen's Revolving                                                                    
Loan  Fund. It  would  allow fishermen  to  borrow money  to                                                                    
purchase permits, boats, and equipment.  The bill would make                                                                    
it easier  for fishermen,  particularly young  fishermen, to                                                                    
get involved  in the industry.  The fund was  originally set                                                                    
up in  the early 80s.  The amount  available to loan  at the                                                                    
time was  $300 thousand and  had not been raised.  The value                                                                    
of  $300 thousand  in the  80s would  currently equal  about                                                                    
$700  thousand  accounting  for   inflation.  The  bill  was                                                                    
raising the amount to $400  thousand. He added that the fund                                                                    
was extremely  solvent with a  default rate of  2.2 percent,                                                                    
which  was well  below  the industry  standard.  He did  not                                                                    
believe  the fund's  solvency would  be impacted  by raising                                                                    
the loan amount. He was available for questions.                                                                                
Co-Chair Foster  reviewed the  list of  testifiers available                                                                    
to answer questions.                                                                                                            
5:01:01 PM                                                                                                                    
Co-Chair Seaton read  from the second paragraph  [Page 2] of                                                                    
the fiscal note:                                                                                                                
     However,  the   overall  program  limit   remaining  at                                                                    
     $400,000,  any revenue  generated from  this change  or                                                                    
     expense   is  expected   to   be   within  the   normal                                                                    
     operational variance of the fund.                                                                                          
Co-Chair Seaton asked  if the bill was raising  the cap from                                                                    
$300 thousand to  $400 thousand or whether the  cap was $400                                                                    
thousand and the bill was raising limits on permits.                                                                            
5:01:40 PM                                                                                                                    
ELIZABETH  BOLLING, STAFF,  REPRESENTATIVE ORTIZ,  responded                                                                    
that the bill  was not raising the aggregate  amount for the                                                                    
loan  fund or  the aggregate  amount a  borrower could  hold                                                                    
unpaid. The  bill was only  raising the sectional  amount by                                                                    
$100 thousand, which was why  the department stated that the                                                                    
loan fund would remain solvent.                                                                                                 
5:02:05 PM                                                                                                                    
Co-Chair  Seaton relayed  that  some of  the materials  were                                                                    
somewhat  confusing  including  the  sponsor  statement.  He                                                                    
requested that  the supporting documents be  clarified going                                                                    
forward. He was not opposed to the limit.                                                                                       
Ms. Bolling  clarified that the  limit she was  referring to                                                                    
was simply for costs  involving purchasing, refurbishing, or                                                                    
upgrading a vessel  specific to one section  in statute. The                                                                    
amount  that could  be loaned  for those  services would  be                                                                    
raised. However,  the total aggregate amount  a person could                                                                    
borrow and  hold an  unpaid balance from  the loan  fund was                                                                    
$400 thousand.                                                                                                                  
Representative  Ortiz added  that the  amount was  currently                                                                    
$400 thousand. The bill was just expanding the section.                                                                         
Representative  Pruitt thought  the  Co-Chair  had raised  a                                                                    
good question.  He was  confused as well.  He was  under the                                                                    
impression that the bill would  change the overall aggregate                                                                    
amount. He was trying to understand the focus of the bill.                                                                      
Representative Ortiz  believed the same question  came up in                                                                    
a  previous hearing.  He hoped  Ms. Haywood  was online  and                                                                    
could provide further clarification.                                                                                            
Co-Chair Foster relayed that Ms. Haywood was not online.                                                                        
Ms. Bolling  explained that the section  being amended spoke                                                                    
about  two loan  types; A  and B.  Under type  A up  to $200                                                                    
thousand  could  be  borrowed.  Under  type  B  up  to  $100                                                                    
thousand could  be borrowed.  The total  was referred  to as                                                                    
$300  thousand in  the section.  However, in  the subsection                                                                    
for  purchasing  a  vessel  and  refurbishing  it  was  $100                                                                    
thousand. The intent of the bill  was to raise the amount to                                                                    
$200 thousand so the full  section would equal $400 thousand                                                                    
- the  equivalent that a person  could take out of  the loan                                                                    
5:04:50 PM                                                                                                                    
AT EASE                                                                                                                         
5:06:25 PM                                                                                                                    
Co-Chair Foster  explained that the committee  recommended a                                                                    
revision of  the sponsor statement  but agreed the  bill was                                                                    
Representative Wilson  referred to Section D  in the statute                                                                    
book, Page  131. It appeared  that it was talking  about two                                                                    
specific  loans rather  than the  total  loans. She  thought                                                                    
that bill was  changing from $300 thousand  to $400 thousand                                                                    
in  section D.  She wondered  where  the change  was in  the                                                                    
Co-Chair  Foster noted  that Ms.  Haywood was  available for                                                                    
Ms.  Bolling  read  from  the   statute  in  section  d  [AS                                                                    
     The total of balances outstanding on loans made to a                                                                       
     borrower under AS 16.10.310 (a)(1)(B) may not exceed                                                                       
     $200 thousand for the purpose of an entry permit, and                                                                      
     may not exceed $100 thousand for all other loans under                                                                     
     that subparagraph.                                                                                                         
Ms. Bolling elaborated that the  amount of $100 thousand was                                                                    
appropriately used  for the purchase and  refurbishment of a                                                                    
vessel.  She explained  that the  $100  thousand amount  was                                                                    
what would  change to $200  thousand in the bill.  The total                                                                    
would equal  $400 thousand rather  than $300  thousand under                                                                    
5:07:54 PM                                                                                                                    
Co-Chair Foster asked Ms. Haywood to respond to the issue.                                                                      
BRITTNEY  CIONI-HAYWOOD,  DIRECTOR,   DIVISION  OF  ECONOMIC                                                                    
DEVELOPMENT,  JUNEAU (via  teleconference),  asked that  the                                                                    
question be restated.                                                                                                           
Co-Chair  Seaton  stated there  was  some  confusion in  the                                                                    
interpretation  of   whether  the   bill  would   raise  the                                                                    
outstanding  aggregate  limit  a   person  could  borrow  or                                                                    
whether the bill  raised the permit loan  from $100 thousand                                                                    
to $200  thousand with the  aggregate remaining the  same at                                                                    
$400 thousand.                                                                                                                  
Ms.  Cioni-Haywood responded  that the  aggregate limit  was                                                                    
currently $400  thousand and would  remain at  $400 thousand                                                                    
in the  bill. The  changes within  the bill  only had  to do                                                                    
with  the different  sections. She  furthered that  that the                                                                    
loan program had a number  of different sections. In section                                                                    
A,  there  would  be  a   $300  thousand  to  $400  thousand                                                                    
increase. In  section B, there  would be a $100  thousand to                                                                    
$200 thousand increase.  In section C, it  was $300 thousand                                                                    
to $400  thousand, and  in section  F, it  was $300  to $400                                                                    
thousand. She  continued that  under the  Commercial Fishing                                                                    
Revolving Loan fund a fisherman  could mix and match between                                                                    
the different  sections up  to $400  thousand. There  was an                                                                    
overall  $400  thousand cap,  which  was  not being  changed                                                                    
within the bill.                                                                                                                
Co-Chair Seaton MOVED to report  HB 56 out of Committee with                                                                    
individual  recommendations  and   the  accompanying  fiscal                                                                    
There being NO OBJECTION, it was so ordered.                                                                                    
HB 56 was REPORTED out of committee with a "do pass"                                                                            
recommendation and with a previously published zero fiscal                                                                      
note: FN1(CED).                                                                                                                 
Co-Chair Foster reviewed the agenda for the following day.                                                                      

Document Name Date/Time Subjects
HB 141 Supporting Documents All Letter 2.27.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB141 Additional Documents pages from 2016_TVEP_Report 2.27.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB141 Additional Documents Pages from UA TVEP Advocacy Package 2.27.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB141 Additional Documents Rep Kito TVEP Information Letter 3.8.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB141 Sectional Analysis 2.27.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB141 Sponsor Statement 2.27.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB 56 Supporting Documents-DCCED Response.pdf HFIN 3/16/2017 1:30:00 PM
HB 56
HB 141 - Document in Support NANA.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB 81 - Letter of Support from AAHA (003).pdf HFIN 3/16/2017 1:30:00 PM
HB 81
HB 141 - Document in Support NANA.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB0056 Sponsor Statement 03.15.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 56
HB141 Additional Documents Rep Kito TVEP Info Letter 3.15.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB 141 Support Letter.pdf HFIN 3/16/2017 1:30:00 PM
HB 141
HB 56 Document in Opposition ABA 3.16.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 56
HB 81 - Sponsor's answers to committee questions 3.16.17.pdf HFIN 3/16/2017 1:30:00 PM
HB 81