Session: State Capitol, Room 102 Juneau, AK 99801-1182 Toll Free: (877) 465-3719 Phone: (907) 465-3719 Fax: (907) 465-3258 Personal Web Site: www.johncoghill.com Interim: 119 N Cushman Street, Suite 211 Fairbanks, AK 99701 Phone: (907) 456-5081 Fax: (907) 456-8245

Sponsor Statement for HB 456
Commercial Fishing Loan Program

"An Act relating to the commercial fishing loan program; and providing for an effective date."

Government agencies should not be in direct competition with private business and excess revenues from a government operation should be managed through the appropriation authority of the legislature. These two basic principles are the reason I introduced this legislation.

HB 456 limits the scope of loans from the Commercial Fishing Loan Program. It narrows the lending ability of the loan program to commercial fisherman who cannot get a loan in the private sector so that the state is not competing with the private sector. It creates a level playing field for all fishermen by eliminating the ability of the department to defer or waiver interest and payments. HB 456 reduces the prequalify loan fee from $200 to $50 and limits to one borrower a maximum of two $35,000 loans.

The legislation adds language to uncodified law to ensure that the borrower's rights are protected should the Division of Investments decide to sell that individual's loan. HB 456 would allow the transfer of the loan but requires that it be done without a change in the original terms of the loan such as increased interest rates or payments.

HB 456 curtails the current practice of transferring excess funds from the revolving loan program to the Fisheries Enhancement Loan Program, which has a separate statutory purpose than the Commercial Fishing Loan Act. I strongly believe the legislature should preserve its authority to appropriate and this legislation provides that excess funds will be appropriated by the legislature for public purpose.

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