Legislature(2001 - 2002)
04/30/2002 03:08 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
GENERAL OBLIGATION BONDS Co-Chair Mulder noted that there were $1.4 billion dollars in general obligation (GO) bond requests. The attorneys indicated that they could not be included in one ominous bond bill. The intent was to use as few vehicles as possible and identify consistent themes. He observed that HB 524 contains GO bonds for new schools and university construction. House Bill 525 contains GO bonds for deferred maintenance of public facilities. Bond debt reimbursement was used for projects that did not fit into a GO bond package, because they were previously leveraged [HB 528]. Representative Lancaster's energy bill [HB 175] was utilized for the final component. House Bill 524 and HB 525 would appear on the November general election ballot. Co-Chair Mulder observed that projects were prioritized. The priority lists were strictly used with one exception. In new school construction, out of the first six schools: three were in [Representative Kaspner's] district and three were in Representative Foster's district. The proposed committee substitute took the first two [in Representative Kaspner's district] and the first two from Representative Foster's. HOUSE BILL NO. 175 "An Act making an appropriation to the Alaska Industrial Development and Export Authority for power projects; and providing for an effective date." Representative Lancaster MOVED to ADOPT Amendment 1: Page 1, line 6, through page 3, line 28: Delete all material and insert: Section 1. ALASKA ENERGY AUTHORITY. (a) me unobligated and unencumbered balance of the Railbelt energy fund (AS 37.05.520) on the effective date of this Act is appropriated to the Alaska Energy Authority for investment by the authority to secure repayment of bonds issued by the authority under AS 44.83 for the following power and intertie projects: (1) the sum of $20,300,000 is allocated to upgrade and extend the Anchorage-Fairbanks power transmission intertie to the Teeland substation; (2) to make grants to the recipients named, for the purposes described, and in the amounts set out below: Homer Electric Association replacement power supply for Seldovia $2,000,000 Anchorage Municipal Light and Power Ekiutna project transmission line upgrade 19,300,000 Golden Valley Electric Association line extension 872,000 Matanuska Electric Association line extension 500,000 (b) It is the intent of the legislature that, once the bonds described in (a) of this section have been repaid, the Alaska Industrial Development and Export Authority will bring to the legislature a prioritized list of energy projects that can be funded from the revenue stream from the funds appropriated in (a) of this section. * Sec. 2. LAPSE OF APPROPRIATION. The appropriation made by sec. 1(a) of this Act is to capitalize a fund and does not lapse. * Sec. 3. This Act takes effect immediately under AS 01.10.070(c)." He explained that the amendment makes minor changes. He observed that the amendment would also allow the Alaska Industrial Development and Export Authority (AIDEA) to compile a priority list for future consideration by the legislature. The legislation would still be $43 million dollars. The legislation utilizes the revenue stream from the securitization of the Rail Belt Energy Fund, which would no longer exist if the legislation were adopted. Representative John Davies pointed out that the legislation contains a smorgasbord of projects in terms of size and duration of the debt repayment. He questioned if the intent was to wait until the last project is repaid before the revenue stream could be utilized again. Representative Lancaster responded that it would be a function and a request of AIDEA. Representative John Davies MOVED to ADOPT an amendment on page 2, line 2: insert "the." Co-Chair Mulder explained that $73 million dollars would be securitized; $43 million dollars would come off of the bonds sales to pay for the projects. The interest off of the $73 million dollars pays for the bonds. The revenue stream is driven from the interest on the bonds not the projects. Representative John Davies questioned if some of the projects would be paid off quicker than others. Co-Chair Mulder stated that they would not. Representative John Davies stressed that the intent is not to wait until the last project is paid before there are new projects. Representative Lancaster explained that funds would flow immediately. The revenue stream, through AIDEA, from the intertie fund would pay the bonds back. He observed that $43 million dollars would already be spent. Representative Croft acknowledged that AIDEA will make the decision, but expressed concern with the deletion of "with the assistance of AREAC and the Denali Commission." Co-Chair Mulder observed that the concern was that the focus of the Denali Commission has been on economic development in rural Alaska. He pointed out that the Rail Belt Energy Fund centers on the rail belt energy grid. He felt that it was not a compatible relationship. Representative Lancaster agreed. Most projects are discussed through the Alaska Industrial Development and Export Authority (AIDEA). It was felt that it would be better to collect the bonds through AIDEA. Representative Hudson questioned what would happen to communities like Cordova. Representative Lancaster explained that Cordova is included in the debt reimbursement bond, which would not require a vote. Representative Lancaster MOVED to ADOPT Amendment 1. There being NO OBJECTION, it was so ordered. HB 175 was heard and HELD in Committee for further consideration.