Legislature(2017 - 2018)HOUSE FINANCE 519
04/26/2017 01:30 PM House FINANCE
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HOUSE BILL NO. 76 "An Act relating to the mariculture revolving loan fund and loans from the fund; and providing for an effective date." 2:02:05 PM Co-Chair Foster indicated there had been no amendments submitted to his office since the bill's last hearing. He invited the bill sponsor, Representative Ortiz, and his staff to the table. REPRESENTATIVE DAN ORTIZ, SPONSOR, thanked the committee for considering the legislation. He read the sponsor statement: This bill amends the existing Alaska Mariculture Revolving Loan Fund to allow up to forty percent of the fund to be used for loans to permitted shellfish hatcheries for planning, construction and operation. Alaska shellfish farms currently do not have a stable supply of seed for the propagation of oysters, and no regular, in-state source of seed for resident aquatic plants and other shellfish. A stable supply of seed is one of many hurdles the industry must overcome to grow and become a viable Alaskan industry. This bill will amend the program to shift its focus and eligibility from individual mariculture farmers to include shellfish hatcheries that would market stock to local Alaskan mariculture farmers. The mariculture industry in Alaska is not yet fully developed, and is extremely high risk, from a financial standpoint. These obstacles make private financing difficult to obtain, but this bill will enable Alaskans to maintain their businesses and grow Alaska's mariculture industry. Representative Ortiz reported that the bill had 2 zero fiscal notes. He was happy to answer any questions. Co-Chair Foster reviewed the list of available testifiers. Co-Chair Foster directed Vice-Chair Gara to review the fiscal notes. Vice-Chair Gara reviewed two zero fiscal notes: [Fiscal Note Number: 2] Department: Department of Fish and Game Appropriation: Statewide Support Services Allocation: Commissioner's Office OMB Component Number: 2175 [Fiscal Note Number: 1] Department: Department of Commerce, Community and Economic Development Appropriation: Investments Allocation: Investments OMB Component Number: 383 Representative Wilson referred to the last paragraph on the fiscal note with OMB component number 383. She read from the fiscal note (copy on file). She asked if the department would be absorbing the costs. She asked for the amount being absorbed. 2:05:32 PM BRITTENY CIONI-HAYWOOD, DIVISION DIRECTOR, DIVISION OF ECONOMIC DEVELOPMENT, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, relayed that the funding would come out of the fund. She noted that there was potentially another regulation package that would be coming out. Representative Wilson asked what fund the monies would be drawn from. She thought the amount should be reflected in the fiscal note and asked Ms. Cioni-Hawood to comment. Co-Chair Seaton read from the remainder of the last paragraph on page 2 of the fiscal note (copy on file). He remarked that the regulations were already being rewritten. He asked for further clarification. Ms. Cioni-Haywood understood that the department was not asking for additional money or an additional appropriation, therefore, the fiscal note was zero. Representative Guttenberg pointed out that the note was from DCCED. It was part of the loan programs, which they had a significant amount. He pointed to the top line of the analysis which indicated that the Mariculture Revolving Loan Fund program was already authorized to issue loans. It appeared the program was expanding to include other projects. Representative Wilson asked about other planned regulation projects that would include this project. Ms. Cioni-Haywood explained that the department was also considering a regulation project on HB 56 [Legislation introduced in 2017 - Short Title: COMMERCIAL FISHING LOANS] that would include changes for the commercial fishing loan limits. Representative Wilson assumed that HB 56 did not have a zero fiscal note. Ms. Cioni-Haywood relayed there was a zero fiscal note for HB 56. She was informed that since the department was not asking for an additional appropriation, the fiscal note would be zero. Representative Wilson was asking because the committee had heard about the budget and how much it had been reduced. She appreciated that the department was absorbing the cost. However, it would be nice to know the amount being absorbed. She specified that the loan people would be paying for the costs. She suggested that there were inconsistencies in the absorption of costs. She asked about the other fiscal note and the potential of more money for the hatchery portion. She read from the second page of the fiscal note from DFG (copy on file) regarding additional operating funds for operators of hatcheries. She realized that she was directing her question to DCCED and she should be asking DFG. She asked if the money for hatcheries went back into the hatcheries themselves. She wondered if that was the reason it stated there might be more money for the hatcheries as opposed to the state. Representative Ortiz asked what she was referring to. Representative Wilson was speaking to the fiscal note with the OMB component number 2175. She pointed to the second page. The language mentioned potential revenue going to hatcheries rather than to the state. 2:11:02 PM AT EASE 2:11:27 PM RECONVENED Representative Ortiz deferred to his staff, Ms. Bolling. ELIZABETH BOLLING, STAFF, REPRESENTATIVE DAN ORTIZ, explained that hatcheries would be able to apply for grants through the reshaped loan fund. Although the grants were small, it would be possible for operators to get some small grant money through the program that they might otherwise receive from DFG. All that the fiscal note conveyed was that a portion of the amount they paid out to the hatcheries to operate might be offset slightly by the grant program. Representative Guttenberg highlighted that the loan program was sustainable as a revolving loan fund and was self- sustained. The legislation was expanding who could use the funds and how the funds would be used. The loan fund by itself was essentially a bank. Representative Wilson clarified that her point was that the money would be designated general funds (DGF) and DGF was shown in state fiscal notes. She wanted the information provided on fiscal notes. Co-Chair Seaton MOVED to report CSHB 76 (FSH) out of Committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSHB 76 (FSH) was REPORTED OUT of Committee with a "do pass" recommendation and with two previously published zero fiscal notes: FN1 (CED) and FN2 (DFG). 2:14:47 PM AT EASE 2:15:49 PM RECONVENED