Legislature(2005 - 2006)HOUSE FINANCE 519
05/02/2006 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB381 | |
| SB171 | |
| SB315 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 381 | TELECONFERENCED | |
| + | SB 171 | TELECONFERENCED | |
| + | SB 315 | TELECONFERENCED | |
| + | TELECONFERENCED |
8:47:31 AM HOUSE BILL NO. 381 An Act relating to the financing of construction, major maintenance, and renovation of facilities for the University of Alaska; relating to the financing of construction of a correctional facility; authorizing the commissioner of revenue to sell the right to receive a portion of the anticipated revenue from a tobacco litigation settlement to the Northern Tobacco Securitization Corporation, with the proceeds of that sale to finance construction, major maintenance, and renovation of facilities for the University of Alaska and to finance the construction of a correctional facility; providing for the establishment of funds for deposit of those proceeds; authorizing the issuance of bonds by the Northern Tobacco Securitization Corporation for the purpose of acquiring the right to receive a portion of anticipated revenue from a tobacco litigation settlement; and providing for an effective date. Co-Chair Chenault MOVED to ADOPT work draft #24-GH2071\I, as the version of the bill before the Committee. There being NO OBEJCTION, it was adopted. PETE ECKLUND, STAFF, REPRESENTATIVE KEVIN MEYER, explained the bill relates to financing of construction, major maintenance and renovation of facilities for the University of Alaska and a correctional facility. It would authorize the Department of Revenue Commissioner for the Alaska Housing Finance Corporation (AHFC) to sell the right to acquire rights to receive 80% of the proceeds of the Master Settlement Agreement (MSA) to sell bonds. The legislation is expected to generated $140 million bond proceed dollars to be used for capital projects across the State. 8:49:31 AM BRYAN BUTCHER, LEGISLATIVE LIAISON, GOVERNMENTAL RELATIONS & PUBLIC AFFAIRS DIRECTOR, ALASKA HOUSING FINANCE CORPORATION, noted that AHFC's Director of Finance, Joe Dubler was on line to answer questions of the Committee. Co-Chair Meyer asked the amount of time restricted by the bonds. 8:50:24 AM JOE DUBLER, (TESTIFIED VIA TELECONFERENCE), DIRECTOR OF FINANCE, ALASKA HOUSING FINANCE CORPORATION, ANCHORAGE, stated that the restructured bonds expected to be sold in 2006 would mature in 2039, with a final maturity in 2048. The bonds include a "turbo feature", which would set required debt service at a low level. All received surplus would be used to redeem bonds at an accelerated rate. 8:51:10 AM Co-Chair Meyer inquired the range of interest rates. Mr. Dubler noted that the capital market moves quickly, but if sold today, it would be between 4.75% to 5% with the 2001 refunding. Co-Chair Meyer inquired the impact of stretching the maturity date. Mr. Dubler explained the further out the date moves, the more risk for the investor and the higher the rate. AHFC does not recommend the longer-term bonds, moving up to 8%. The longer ones are "non-rated" bonds and demand a higher rate, as they are more risky. Co-Chair Meyer asked if AHFC was comfortable with the 2040 expiration date. Mr. Dubler said they were comfortable with it; the associated revenues for debt service would be about $355 million future value dollars, including the principal and interest. Co-Chair Meyer pointed out that the bulk would be used for University capital projects. 8:54:53 AM Co-Chair Chenault MOVED to REPORT out CS HB 381 (FIN) out of Committee with individual recommendations and with the accompanying zero note. There being NO OBJECTION, it was so ordered. CS HB 381 (FIN) was reported out of Committee with a "do pass" recommendation and with zero note #1 by the Department of Administration. AT EASE: 8:55:33 AM RECONVENE: 8:56:59 AM
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