Legislature(2007 - 2008)HOUSE FINANCE 519
04/13/2007 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB28 | |
| HB229 | |
| HB152 | |
| HB133 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 133 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 28 | TELECONFERENCED | |
| += | HB 229 | TELECONFERENCED | |
| += | HB 152 | TELECONFERENCED | |
HOUSE BILL NO. 229
"An Act authorizing the Alaska Railroad Corporation to
participate in a project consisting of the acquisition,
construction, improvement, maintenance, equipping, or
operation of real and personal property, including
facilities and equipment, for the Kenai gasification
project, authorizing the corporation to issue bonds to
finance all or a portion of the project, and
identifying these as bonds for an essential public and
governmental purpose; and providing for an effective
date."
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, offered to answer
questions.
Representative Hawker asked Mr. Mitchell if the legislation
causes any problems for the state.
Mr. Mitchell explained that it appears that a double benefit
will be gained by this legislation: developing use of a raw
resource with the coal and anchoring Agrium in the Kenai
Peninsula where it has a huge economic impact. He addressed
non-recourse revenue bonds where the railroad has a unique
ability to contemplate issuing industrial development bonds
that are now precluded by the Tax Reform Act of 1986. He
suggested that the project, as proposed, makes sense.
Representative Hawker spoke of a concern over the industrial
development bonds and the effect on the state's rating. Mr.
Mitchell replied that it should have not impact and there
has never been an issue in that regard. He gave an example
of development bonds from the City of Valdez.
2:02:12 PM
Representative Gara asked how a railroad that generated such
large profits last year can issue $2.6 billion worth of
bonds. Mr. Mitchell responded that the market would have to
validate a high probability of success.
Representative Gara asked about a state-owned gas pipeline
and its effect on the bonding. Mr. Mitchell replied that it
would have no impact on this bonding proposal.
Representative Kelly wondered about pulling the
authorization some time in the future if it doesn't get
used. Mr. Mitchell reported that once the bond is issued
there are contractual issues. Representative Kelly restated
the question. Mr. Mitchell explained that if the bonds are
not issued, statute can be changed.
2:05:25 PM
Representative Gara MOVED to ADOPT Amendment #1:
Page 4, line 4, following "this Act,":
Insert "and compliance with the requirement of (b) of
this section,"
Page 4, following line 23:
Insert a new subsection to read:
"(b) The Alaska Railroad Corporation may not issue
bonds under the authorization and approval set out in
this section unless the Department of Environmental
Conservation certifies that the coal gasification and
electrical power generation facility will be designed
and operated in a manner that does not release more
carbon dioxide into the atmosphere, per megawatt of
power produced, than the average carbon dioxide
released per megawatt during calendar year 2006 by the
Beluga natural gas power plant, located on the western
coast of Cook Inlet."
Re-letter the following subsections accordingly.
Co-Chair Meyer OBJECTED.
Representative Gara explained that the amendment deals with
carbon emissions from the coal plant. He wanted to regulate
carbon emissions in exchange for the bonding request.
Co-Chair Meyer noted that Co-Chair Chenault was not in
support of the amendment. He said he sees the bill as a
financial tool.
2:08:26 PM
Representative Kelly spoke strongly against Amendment #1.
LISA PARKER, CORPORATE AFFAIRS, Agrium, testified that there
are regulations already in place regarding this issue.
Representative Gara emphasized the importance of limiting
carbon emissions and the problem of the greenhouse effect.
He requested pro-active steps to reduce carbon emissions.
Co-Chair Meyer spoke against Amendment #1.
Representative Kelly explained his beliefs regarding global
warming. He termed the amendment irresponsible relative to
global warming.
2:13:39 PM
Co-Chair Meyer MAINTAINED his objection.
A roll call vote was taken on the motion.
IN FAVOR: Gara, Nelson
OPPOSED: Thomas, Hawker, Kelly, Stoltze, Meyer
Representatives Crawford, Foster, Joule, and Chenault were
absent for the vote.
The MOTION FAILED (2-5).
2:15:13 PM
Representative Hawker acknowledged a concern about the
impact of the bill on the state; however, he stated support
for the bill in its present form.
Vice Chair Stoltze stated concerns by the Mat-Su about a
rail extension to Port McKenzie being shut out due to this
bill. He referred to a letter from the Mat-Su Borough (copy
on file.) He spoke in support of the Agrium project but not
at the expense of the Port McKenzie project. He mentioned
that the Mayor of Wasilla has had no contact with the Alaska
Railroad Corporation (ARRC). He brought out concerns about
the Port of Anchorage route. He concluded by stating
support for the bill.
2:22:28 PM
PAT GAMBLE, PRESIDENT AND CEO, ALASKA RAILROAD CORPORATION,
thought that Vice Chair Stoltze was correct about the
Wasilla-to-Anchorage corridor problems. He spoke in favor
of the extension to Port McKenzie, but thought the project
decision was up to Agrium. It is not a preference issue for
the railroad; at issue is the urgency and need to meet a
timeline. The railroad is the easiest component, but works
in response to Agrium's direction.
Vice Chair Stoltze apologized for the use of the word
"cavalier" in reference to ARRC.
Representative Thomas asked about the Beluga Coal Mine route
and the possibility of saving money. Ms. Parker said that
had been looked into and both options are being considered.
2:29:30 PM
Vice Chair Stoltze MOVED to REPORT HB 229 out of Committee
with individual recommendations the accompanying fiscal
note. There being NO OBJECTION, it was so ordered.
CSHB 229 (FIN) was REPORTED out of Committee with a "no
recommendation" and with a new fiscal note by the Department
of Commerce, Community and Economic Development.
2:30:47 PM
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