03/03/2021 01:30 PM Senate LABOR & COMMERCE

         SB  54-AHFC WATER & SEWER BONDS/TRANSPORTATION                                                                     
                                                                                                                                
1:41:07 PM                                                                                                                    
CHAIR   COSTELLO  reconvened   the  meeting   and  announced   the                                                              
consideration  of SENATE  BILL  NO. 54,  "An  Act authorizing  and                                                              
relating to  the issuance of bonds  by the Alaska  Housing Finance                                                              
Corporation  for   safe  and  clean  water  and   hygienic  sewage                                                              
disposal facility  capital projects  and transportation  projects;                                                              
providing  for  the  repayment  of   the  bonds  and  bond  costs;                                                              
relating to the  dividend paid to the state by  the Alaska Housing                                                              
Finance Corporation; and providing for an effective date."                                                                      
                                                                                                                                
She advised that  SB 54 was introduced on behalf  of the governor.                                                              
This was the second  hearing and the intention was  to take public                                                              
testimony and  look to the will  of the committee. She  noted that                                                              
the next committee of referral was Finance.                                                                                     
                                                                                                                                
CHAIR COSTELLO  asked Stacy  Barnes if she  would like  to comment                                                              
on the bill.                                                                                                                    
                                                                                                                                
1:42:02 PM                                                                                                                    
STACY  BARNES,   Director,  Governmental   Relations  and   Public                                                              
Affairs, Alaska  Housing Finance  Corporation, Anchorage,  Alaska,                                                              
deferred comment to CEO Bryan Butcher.                                                                                          
                                                                                                                                
CHAIR  COSTELLO asked  Mr. Butcher  to  give the  members a  brief                                                              
review of the bill.                                                                                                             
                                                                                                                                
1:42:55 PM                                                                                                                    
BRYAN  BUTCHER,  CEO/Executive Director,  Alaska  Housing  Finance                                                              
Corporation  (AHFC),  Department   of  Revenue  (DOR),  Anchorage,                                                              
Alaska,  explained that  SB  54 authorizes  AHFC  to sell  $101.63                                                              
million  in  tax-exempt capital  project  bonds  to fund  DEC  and                                                              
DOTPF  federal   match  in  the  capital  budget,   primarily  for                                                              
transportation and  village safe water projects.  The debt service                                                              
on the  20-year bonds would come  out of the corporation's  annual                                                              
dividend to  the state. He noted  that the dividend has  been over                                                              
$40 million  the last several  years and  has the capacity  to pay                                                              
between $6  million and $7  million a year  in debt  service. This                                                              
depends on  the interest  rate when  the bonds  go to market,  but                                                              
the expectation is that rates will remain low.                                                                                  
                                                                                                                                
CHAIR COSTELLO  asked if AHFC's AA+  bond rating is  separate from                                                              
the state.                                                                                                                      
                                                                                                                                
MR. BUTCHER agreed that was correct.                                                                                            
                                                                                                                                
CHAIR COSTELLO mentioned who was available to answer questions.                                                                 
                                                                                                                                
1:44:55 PM                                                                                                                    
SENATOR  GRAY-JACKSON  noted  that   she  received,  but  had  not                                                              
reviewed,  the list of  shovel-ready projects  that she  requested                                                              
during the last hearing.                                                                                                        
                                                                                                                                
CHAIR COSTELLO  asked if she would  like the committee to  take an                                                              
at-ease to look at the list before moving the bill.                                                                             
                                                                                                                                
SENATOR GRAY-JACKSON  replied it  is 71 pages  and she  would look                                                              
at it later.                                                                                                                    
                                                                                                                                
CHAIR  COSTELLO  asked Mr.  Butcher  to  describe the  process  to                                                              
develop the list.                                                                                                               
                                                                                                                                
1:46:04 PM                                                                                                                    
MR. BUTCHER  explained that  AHFC informed  the governor's  office                                                              
of  the  level of  bonds  that  the corporation  could  fund.  The                                                              
governor's  office  submitted the  list  of  projects to  AHFC  to                                                              
ensure  that they  fit under  the  IRS requirements.  AHFC had  no                                                              
input  on the  specific projects  but the  OMB director  indicated                                                              
they emphasized  federal match  that needed to  occur as  the best                                                              
place for the funds.                                                                                                            
                                                                                                                                
SENATOR GRAY-JACKSON  asked  what percentage  of the projects  are                                                              
for Anchorage.                                                                                                                  
                                                                                                                                
MR. BUTCHER deferred the question to Rob Carpenter with DOTPF.                                                                  
                                                                                                                                
CHAIR COSTELLO  asked Mr.  Carpenter to  respond to Senator  Gray-                                                              
Jackson. She  also asked  what percentage of  the list  applies to                                                              
statewide airports  and whether it includes money  for maintenance                                                              
of airports or just construction.                                                                                               
                                                                                                                                
1:48:16 PM                                                                                                                    
ROB CARPENTER,  Deputy Commissioner, Department  of Transportation                                                              
and Public Facilities  (DOTPF), Juneau, Alaska, offered  to follow                                                              
up with  the specific information  Senator Gray-Jackson  requested                                                              
as well  the information about  aviation. He noted  that Anchorage                                                              
typically   receives  roughly   50   percent   of  the   Statewide                                                              
Transportation  Improvement  Plan (STIP)  funding.  The money  for                                                              
the  Airport Improvement  Program  (AIP)  comes from  the  Federal                                                              
Aviation  Administration (FAA)  and  it typically  goes for  rural                                                              
airport construction  work  such as runway  resurfacing and  apron                                                              
expansion, not things like plowing.                                                                                             
                                                                                                                                
1:49:30 PM                                                                                                                    
SENATOR STEVENS  asked for  an analysis  of what  the rest  of the                                                              
state receives after Anchorage gets 50 percent.                                                                                 
                                                                                                                                
MR. CARPENTER agreed to provide the information.                                                                                
                                                                                                                                
SENATOR GRAY-JACKSON  asked if  the Port  of Alaska qualifies  for                                                              
any of the money.                                                                                                               
                                                                                                                                
MR. CARPENTER answered  mostly no. These Title  23 federal highway                                                              
projects  are generally  restricted  to maintenance.  Funding  for                                                              
the Port of Anchorage  would be restricted to  roadways leading to                                                              
the port and potentially for freight staging areas.                                                                             
                                                                                                                                
CHAIR  COSTELLO  found  no  further   questions  and  solicited  a                                                              
motion.                                                                                                                         
                                                                                                                                
1:51:45 PM                                                                                                                    
SENATOR HOLLAND moved  to report SB 54, [work  order 32-GS1713\A],                                                              
from  committee  with  individual   recommendations  and  attached                                                              
fiscal note(s).                                                                                                                 
                                                                                                                                
1:52:04 PM                                                                                                                    
At ease                                                                                                                         
                                                                                                                                
1:53:39 PM                                                                                                                    
CHAIR  COSTELLO  reconvened  the meeting  and  recognized  Senator                                                              
Holland.                                                                                                                        
                                                                                                                                
1:53:42 PM                                                                                                                    
SENATOR HOLLAND withdrew the previous motion.                                                                                   
                                                                                                                                
1:53:51 PM                                                                                                                    
CHAIR COSTELLO  opened public  testimony on  SB 54; finding  none,                                                              
she closed public testimony on SB 54.                                                                                           
                                                                                                                                
1:54:29 PM                                                                                                                    
SENATOR HOLLAND moved  to report SB 54, [work  order 32-GS1713\A],                                                              
from  committee  with  individual   recommendations  and  attached                                                              
fiscal note(s).                                                                                                                 
                                                                                                                                
CHAIR COSTELLO  found  no objection  and SB 54  was reported  from                                                              
the Senate Labor and Commerce Standing Committee.