Legislature(2017 - 2018)GRUENBERG 120

02/23/2017 10:00 AM House FISHERIES

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Audio Topic
10:03:03 AM Start
10:04:17 AM HB56
10:23:56 AM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved HB 56 Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 HB 56-COMMERCIAL FISHING LOANS                                                                             
10:04:17 AM                                                                                                                   
CHAIR STUTES  announced that the  only order of business  would be                                                              
HOUSE  BILL NO. 56,  "An Act  relating to  limitations on  certain                                                              
commercial  fishing  loans made  by  the Department  of  Commerce,                                                              
Community, and Economic Development."                                                                                           
10:04:25 AM                                                                                                                   
DAN ORTIZ,  Alaska State  Legislature, said this  bill is  a small                                                              
step in  creating an  avenue to  assist young  fishermen to  enter                                                              
the  industry and  help to  alleviate  the greying  of the  fleet.                                                              
Resources  will  be  more  accessible,  such  as  boats,  repairs,                                                              
permits,  and other related  requirements  for becoming a  fishing                                                              
boat captain.  The program is self-sustainable, he finished.                                                                    
10:06:22 AM                                                                                                                   
REPRESENTATIVE  EASTMAN  asked  about the  number  of  outstanding                                                              
loans that  were made  at, or have  reached, the current  $300,000                                                              
cap, and  whether the cap should  be set higher than  the proposed                                                              
REPRESENTATIVE ORTIZ  responded that the amount being  proposed is                                                              
conservative to ensure  that the process for opportunities  is not                                                              
circumvented  nor   will  it  represent  competition   to  private                                                              
commercial  interests.  He  deferred further  comment to  Britteny                                                              
10:08:56 AM                                                                                                                   
BRITTENY CIONI-HAYWOOD,  Division  of Economic Development  (DED),                                                              
Department   of  Commerce,   Community   &  Economic   Development                                                              
(DCCED), said  no current borrow  has an outstanding  principle of                                                              
$400,000,   and  16   borrowers  have   outstanding  balances   of                                                              
$300,000.   Regarding the  number of  applications received  for a                                                              
$300,000  loan, she offered  to provide  further information,  and                                                              
pointed  out that a  typical application  would  be for a  lesser,                                                              
initial  amount, and  other loans  would be added  to the  balance                                                              
over time, with an absolute cap of $400,000.                                                                                    
10:11:12 AM                                                                                                                   
REPRESENTATIVE  CHENAULT asked  how the current  cap of  $300,000,                                                              
could result in a loan totaling $400,000.                                                                                       
The committee took an at-ease from 10:11 a.m. to 10:14 a.m.                                                                     
10:14:27 AM                                                                                                                   
MS. CIONI-HAYWOOD  said that for  the entire commercial  fisheries                                                              
loan program,  the maximum is  being raised to $400,000;  however,                                                              
within  the program  are  numerous sections  [AS  16.10.310(1)(A)-                                                              
(F)].  The proposed  change affects the cap for  Sec. (A), raising                                                              
it  from  $300,000 to  $400,000;  Sec.  (B)  will be  raised  from                                                              
$100,000 to $200,000,  "and so forth."  In response  to a question                                                              
from  the chair  she explained  that  Sec. (A)  applies to  permit                                                              
purchases,   engine   fuel   efficiency,   and   product   quality                                                              
improvements,  and  Sec.  (B)  covers   permit  purchases,  vessel                                                              
purchases,   vessel   upgrades,   gear  purchases,   engine   fuel                                                              
efficiency  and product  quality  improvements.   She pointed  out                                                              
that  Sec.  (B)  requires  letters of  denial  from  a  recognized                                                              
lending institution.                                                                                                            
CHAIR STUTES opened public testimony.                                                                                           
10:15:53 AM                                                                                                                   
BENJAMIN   BROWN,   Commissioner,   Commercial   Fisheries   Entry                                                              
Commission  (CFEC), stated  official support  for HB  56 and  said                                                              
this  will  be  an  important  tool   to  assist  young  fishermen                                                              
entering  the  industry and  will  help  offset concerns  for  the                                                              
greying of the fleet.                                                                                                           
10:17:27 AM                                                                                                                   
REPRESENTATIVE KREISS-TOMKINS  stated support for HB  56, and said                                                              
this is a clear solution to a major problem.                                                                                    
10:17:55 AM                                                                                                                   
REPRESENTATIVE  CHENAULT asked  whether raising  the Sec.  (A) cap                                                              
would allow a  borrower to have an aggregate  loan total exceeding                                                              
MS.  CIONI-HAYWOOD responded  no,  and said  a  person could  only                                                              
have an aggregate loan total of $400,000.                                                                                       
10:19:09 AM                                                                                                                   
REPRESENTATIVE  FANSLER referred  to the  bill, page  1, lines  13                                                              
and 14 [continuing to page 2, lines 1 and 2], which reads:                                                                      
     The total  of balances outstanding  on loans  made under                                                                   
     AS  16.10.310(a)(1)(E)  may  not exceed  $2,000,000  for                                                                   
     each  community   eligible  under  federal   statute  or                                                                   
     regulation   to   establish   or  participate   in   the                                                                   
     establishment of a community quota entity.                                                                                 
REPRESENTATIVE FANSLER  noted the $2  million limit and  asked for                                                              
further information.                                                                                                            
MS.  CIONI-HAYWOOD said  the $2  million  is in  reference to  the                                                              
allowable  loan  program  relating  to a  community  quota  entity                                                              
(CQE), not individual fishermen.                                                                                                
REPRESENTATIVE  FANSLER questioned  the possible  need of  raising                                                              
the limit amount above $400,000.                                                                                                
MS.  CIONI-HAYWOOD  said  the  $400,000   limit  has  been  deemed                                                              
10:20:25 AM                                                                                                                   
REPRESENTATIVE  CHENAULT   expressed  concern  that   the  current                                                              
$300,000 cap  appears to allow borrows  to hold a  $400,000 limit.                                                              
He  maintained  that raising  the  cap,  given this  model,  would                                                              
allow loans to exceed $400,000.                                                                                                 
MS.  CIONI-HAYWOOD  explained  that the  bill  allows  flexibility                                                              
within  the loan sections,  thus  it may appear  that someone  has                                                              
exceeded the  cap, but she assured  the committee that  the cap is                                                              
firm at $400,000.                                                                                                               
CHAIR STUTES closed public testimony.                                                                                           
10:23:21 AM                                                                                                                   
REPRESENTATIVE  FANSLER moved  to report  HB 56  out of  committee                                                              
with  individual  recommendations   and  the  accompanying  fiscal                                                              
notes.   Without  objection, HB  56  was reported  from the  House                                                              
Special Committee on Fisheries.                                                                                                 

Document Name Date/Time Subjects
HB056 Support USAG.pdf HFSH 2/23/2017 10:00:00 AM
HB 56
HB056 Support Johnson 01.24.17.pdf HFSH 2/23/2017 10:00:00 AM
HB 56