Legislature(2013 - 2014)BARNES 124

03/17/2014 03:15 PM LABOR & COMMERCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 159 AIR AMBULANCE SERVICES TELECONFERENCED
Heard & Held
+= HB 288 AIDEA: ARCTIC DEVELOPMENT PROGRAM/FUND TELECONFERENCED
Heard & Held
+ HB 281 PRESCRIPTION WITHOUT PHYSICAL EXAMINATION TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 316 WORKERS' COMPENSATION MEDICAL FEES TELECONFERENCED
Heard & Held
+= HB 282 LANDLORD AND TENANT ACT TELECONFERENCED
Moved CSHB 282(L&C) Out of Committee
         HB 288-AIDEA: ARCTIC DEVELOPMENT PROGRAM/FUND                                                                      
                                                                                                                                
4:01:42 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  next order of business  would be                                                               
HOUSE BILL  NO. 288, "An  Act creating the  Arctic infrastructure                                                               
development   program  and   fund   in   the  Alaska   Industrial                                                               
Development and Export Authority."                                                                                              
                                                                                                                                
4:02:14 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  REINBOLD moved  to adopt  the proposed  committee                                                               
substitute  (CS)   for  HB  288,  labeled   28-LS1139\N,  Martin,                                                               
3/14/14, as the working document [Version N].                                                                                   
                                                                                                                                
CHAIR OLSON objected for the purpose of discussion.                                                                             
                                                                                                                                
4:02:36 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON,  speaking as  prime  sponsor  of HB  288,                                                               
stated  that the  Arctic coastline  runs from  Canada across  the                                                               
North Slope,  down Western Alaska to  Bristol Bay, to the  end of                                                               
the Aleutian  Chain.  However,  only one deep draft  port exists,                                                               
Dutch  Harbor,  within  that  coastline  in  the  middle  of  the                                                               
Aleutian Islands.  He said  that with the emerging Arctic, vessel                                                               
landings places are  limited, whether vessels are  being used for                                                               
oil response,  search and rescue,  or resource extraction.   This                                                               
bill has proposed  to develop a funding mechanism  similar to the                                                               
sustainable  energy  transmission  and  supply  development  fund                                                               
(SETS) authored by Representative Millett.   He explained that HB                                                               
288  would  expand  AIDEA's [Alaska  Industrial  Development  and                                                               
Export Authority] "tool bag" by  extending the same authority for                                                               
loans,  loan  guarantees,  bonds, bond  guarantees  currently  in                                                               
SETS, which allows the state  to develop the infrastructure under                                                               
its own terms.  It will  extend AIDEA's ability to ensure project                                                               
obligations  and  loans,  defer principal  payments  and  capital                                                               
interest,  offer financing  terms  up to  40  years, enter  lease                                                               
agreements,  enter into  sales  lease  back agreements,  transfer                                                               
agreements,  and  other  agreements.     He  stated  that  making                                                               
financing  available  will  empower  communities  and  attract  a                                                               
global pool  of investment as  an alternative to  the traditional                                                               
grant  model.   Currently, an  estimated $100  billion in  global                                                               
capital is  "looking for a home  in the Arctic."   Instead of the                                                               
Alaska Permanent  Fund Corporation  investing in projects  in the                                                               
Lower 48,  private investments want  to invest in Alaska  and are                                                               
recommended by  the Arctic Policy  Commission.  In order  to help                                                               
provide advancing economic development  and a healthy environment                                                               
an infrastructure development fund is critical, he said.                                                                        
                                                                                                                                
4:05:57 PM                                                                                                                    
                                                                                                                                
GRAHAM  JUDSON, Staff,  Representative Bob  Herron, Alaska  State                                                               
Legislature, referred to  the sectional in members'  packets.  He                                                               
referred to  page 1, line 5  through page 2, line  19, Section 1,                                                             
AS  44.88.088(a), which  establishes that  the Alaska  Industrial                                                               
Development  and  Export  Authority  shall  adopt  a  policy  for                                                               
payment of a dividend from  the Arctic Infrastructure Development                                                               
Fund (AIDF),  AS 44.88.810, to the  state each fiscal year.   The                                                               
dividend may not be less than  25 percent or more than 50 percent                                                               
of the net income  of the fund.  This puts the  AIDF in line with                                                               
AIDEA's revolving  fund and  sustainable energy  transmission and                                                               
supply development fund (SETS).                                                                                                 
                                                                                                                                
4:07:00 PM                                                                                                                    
                                                                                                                                
MR. JUDSON  stated that  Section 2 defines  "net income"  for the                                                         
purposes  of this  chapter and  the definition  now includes  the                                                               
AIDF.    Section 3  defines  "unrestricted  net income"  for  the                                                               
purposes  of this  chapter and  the definition  now includes  the                                                               
AIDF.  He said Sections 4-8, page  3, line 8 thru page 5, line 6,                                                             
will make  conforming changes  to include  loans from  the Arctic                                                               
Infrastructure  Development  fund   (AIDF)  to  existing  statues                                                               
regarding interest  rates and other  requirements for  loans from                                                               
funds  managed   by  AIDEA.     These  changes  place   the  same                                                               
requirements on the  AIDF that currently exist  for the revolving                                                               
fund and  the SETS fund.   Section  9, AS 44.88.159(g),  adds the                                                             
AIDF  to  the  types  of   programs  to  pay  borrowers  of  loan                                                               
participation the AIDEA  may establish.  This places  the AIDF in                                                               
parallel with the existing revolving fund and SETS fund.                                                                        
                                                                                                                                
4:08:01 PM                                                                                                                    
                                                                                                                                
MR. JUDSON  referred to Section  10 which establishes  the Arctic                                                               
Infrastructure  Development Program  and  fund.   The purpose  of                                                               
this  fund  is to  provide  financing  for Arctic  infrastructure                                                               
development and  defines the  fund's structure,  including direct                                                               
appropriations  made  by  the legislature  and  money  or  assets                                                               
transferred to the  fund by AIDEA from any  other fund controlled                                                               
by AIDEA.   These transfers would require a majority  vote by the                                                               
members of AIDEA, which is essentially  an action by its board of                                                               
directors  on  unrestricted   loan  repayments,  interest,  other                                                               
income earned by the fund, and  investment or assets of the fund.                                                               
This section  allows separate accounts  to be  established within                                                               
the fund  and managed by  AIDEA and  ii establishes the  AIDF and                                                               
clarifies that it is not part of the revolving fund, he said.                                                                   
                                                                                                                                
4:08:54 PM                                                                                                                    
                                                                                                                                
MR. JUDSON referred to page 6,  lines 17-19, of Section 10, which                                                               
clarifies that  the fund will  be used for  Arctic infrastructure                                                               
development.  He  referred to page 6, lines 20  thru page 7, line                                                               
14 of section 10, which establishes  the powers and duties of the                                                               
AIDEA regarding  the AIDF.   This section mirrors the  powers and                                                               
duties of the  revolving fund and the SETS fund.   It also allows                                                               
AIDEA  to   use  the  AIDF   to  finance   Arctic  infrastructure                                                               
development,  ensure  project  obligations,  guarantee  loans  or                                                               
bonds, establish reserves, and acquire  real or personal property                                                               
by purchase, transfer,  or foreclosure.  He said  it allows AIDEA                                                               
to  defer principal  payments or  capitalize  interest on  Arctic                                                               
infrastructure development,  enter into lease  agreements, sales-                                                               
lease-back   agreements,   build-operate-transfer  and   operate-                                                               
transfer agreements or similar financing  agreements and to enter                                                               
into  agreements with  government entities  for the  transfer and                                                               
control   of  infrastructure,   rights-of-way,  facilities,   and                                                               
studies,  allows contract  services,  allows the  fund to  borrow                                                               
money or issue bonds, and  directs AIDEA to establish regulations                                                               
to implement the fund.                                                                                                          
                                                                                                                                
4:10:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HERRON explained  that  this section  is "a  must                                                               
have" for the other body, since  it's important for AIDEA to have                                                               
the authority,  but if it  goes beyond the  limitations outlined,                                                               
it must come back to the legislature for approval.                                                                              
                                                                                                                                
4:10:34 PM                                                                                                                    
                                                                                                                                
MR. JUDSON continued with Section 10,  page 7, lines 15 thru page                                                               
8, line 1, which establishes  the limitations on financing in the                                                               
AIDF.  It provides that  legislative authority would be needed to                                                               
go beyond the  limitations set forth in this section.   The AIDEA                                                               
may not use  the AIDF to make  a loan for more  than one-third of                                                               
the  capital cost  of the  development; a  loan guarantee  if the                                                               
amount of  the guarantee  exceeds $20  million, or  financing for                                                               
more  than 40  years.   Notwithstanding (a)  of this  Section 10,                                                               
legislative approval,  AIDEA can use  the fund as security  for a                                                               
bond guarantee  and AIDEA may  provide financing, loans,  or bond                                                               
guarantees for  the development and  support of fisheries  in the                                                               
Arctic  provided  the amount  of  any  financing, loan,  or  bond                                                               
guarantee is no less than $7 million.                                                                                           
                                                                                                                                
MR. JUDSON  said it limits  financing, loans, or  bond guarantees                                                               
for fishing  vessels, quota shares  or individual  fishing quotas                                                               
to those used within a federally managed fishery.                                                                               
                                                                                                                                
4:12:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT  asked why add the  fishing vessels, quota                                                               
shares,  or individual  fishing  quotas to  those  used within  a                                                               
federally managed fishery since a  revolving loan fund for vessel                                                               
enhancement  exists, although  she did  not recall  anything that                                                               
would  help fishermen  purchase  individual quotas  or shares  of                                                               
individual fishing units.                                                                                                       
                                                                                                                                
REPRESENTATIVE HERRON responded that  this language was suggested                                                               
by  a   legislator  in  the   ther  body.    He   suggested  that                                                               
conversations were held with AIDEA.   He said that Mr. Judson was                                                               
"shadowing" the Senate version of the bill.                                                                                     
                                                                                                                                
4:13:23 PM                                                                                                                    
                                                                                                                                
MR. JUDSON said this language  would allow AIDEA to finance loans                                                               
with the goal to increase  ownership of fishing vessels and quota                                                               
shares in Alaska.                                                                                                               
                                                                                                                                
REPRESENTATIVE REINBOLD expressed her concern.   She said she has                                                               
a bit of a "hardship" with that provision.                                                                                      
                                                                                                                                
REPRESENTATIVE MILLETT clarified  her concern.  She  said she was                                                               
a commercial  fisherman for 25  years and has used  every fishing                                                               
opportunity, grant,  and low  interest loan  for fisheries.   She                                                               
questioned  the need  for another  program and  was uncomfortable                                                               
with the  potential amount of  the loan.   She said that  she has                                                               
never seen  one for  the purchase of  quota shares  or individual                                                               
quotas and characterized it as being able to stack the deck.                                                                    
                                                                                                                                
CHAIR  OLSON pointed  out that  concerns  can be  brought to  the                                                               
sponsor since he planned to hold the bill over.                                                                                 
                                                                                                                                
4:15:30 PM                                                                                                                    
                                                                                                                                
MR.  JUDSON referred  to page  8,  to Section  11, which  defines                                                               
"Arctic" in a  geographical boundary similar to  the boundary set                                                               
forth  in the  Arctic  Region  Policy Act  (ARPA),  north of  the                                                               
Arctic  Circle, north  and west  of  the boundary  formed by  the                                                               
Porcupine, Yukon,  and Kuskokwim rivers, and  all contiguous seas                                                               
including  the Arctic  Ocean, the  Beaufort,  Bering and  Chukchi                                                               
Seas, and the  Aleutian chain.  Finally, the language  on page 8,                                                               
lines 7-19, defines "Arctic Infrastructure development."                                                                        
                                                                                                                                
REPRESENTATIVE HERRON  suggested that it  may be helpful  to hear                                                               
others testify.                                                                                                                 
                                                                                                                                
4:16:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON referred to  Section 11, paragraph (19),                                                               
and asked  how expansive "Arctic Infrastructure  development" is.                                                               
He asked  if the Anchorage port  could be seen as  something that                                                               
furthers or supports the development of an Arctic facility.                                                                     
                                                                                                                                
MR.  JUDSON answered  yes;  he  did not  believe  there were  any                                                               
limitations to what supports the Arctic.                                                                                        
                                                                                                                                
REPRESENTATIVE  HERRON  commented that  the  City  of Seward  has                                                               
provided a  letter of support  since they have been  and continue                                                               
to place themselves as a service  port for all vessels in Alaska.                                                               
He said  that all  items that support  development of  the Arctic                                                               
should be included.                                                                                                             
                                                                                                                                
4:18:05 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON asked for  the definition of facility in                                                               
that same paragraph.                                                                                                            
                                                                                                                                
MR. JUDSON  answered that  was a change  from the  original bill,                                                               
and the use  of facility was to  reduce the list.  He  said it is                                                               
somewhat open.                                                                                                                  
                                                                                                                                
4:18:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked what type of  project or facility                                                               
that might be "spawned."  He asked  if it would it be a harbor in                                                               
Point Hope or Point Lay or something in the Interior.                                                                           
                                                                                                                                
REPRESENTATIVE HERRON answered  that is the key and  what will be                                                               
needed first, whether  that would be a safe refuge  or harbor, or                                                               
harbors and  ports to support  oil response.  He  said obviously,                                                               
most of  the funds  will be private  sector so  identifying which                                                               
port or  resource makes  the most  sense.   He said  it is  not a                                                               
race, but what  makes sense and what is important  to Alaska.  He                                                               
likened it  as being similar  to the port  authority legislation,                                                               
elsewhere in the legislature, that is  a holistic plan.  And this                                                               
language  tries to  balance this  for the  good of  Alaska rather                                                               
than it being the community who has the strongest leverage.                                                                     
                                                                                                                                
REPRESENTATIVE  SADDLER  referred to  page  8,  line 19,  to  the                                                               
language  "used in  support of  a  fishery in  the Arctic"  which                                                               
could be Port of Anchorage as broad  as possible or if it will be                                                               
at least 50 percent aimed at a fishery in the Arctic.                                                                           
                                                                                                                                
REPRESENTATIVE  HERRON   deferred  to  Mr.  Mark   Davis,  Alaska                                                               
Industrial Development and Export Authority.                                                                                    
                                                                                                                                
4:21:23 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  referred to  a map in  members' packets                                                               
and asked how the feature was achieved.                                                                                         
                                                                                                                                
REPRESENTATIVE HERRON  related that  Congress defined  the Arctic                                                               
region, but  the Bering Sea is  the key to the  Arctic since warm                                                               
water goes  in and  cold water  goes out.   He  characterized the                                                               
Bering  Sea as  Western Alaska  and the  Aleutian's garden,  just                                                               
like the  Beaufort and Chukchi Sea  is their garden.   The reason                                                               
for the  boundaries is  that in  the 1950s,  President Eisenhower                                                               
had the  idea that the northern  part of Alaska couldn't  pay for                                                               
itself  but the  southern part  of the  Railbelt and  the Tongass                                                               
forest  could.   Thus the  PYK line,  named after  the Porcupine,                                                               
Yukon, and  Kuskokwim rivers  was a  result of  Senator Butrovich                                                               
and  Mr. Atwood  objecting to  a  territory above  the PYK  line.                                                               
Ultimately,  the   Congress  defined  the  Arctic   within  those                                                               
boundaries, which  [was the  basis for Section  10 of  the Alaska                                                               
Statehood Act, which U.S. Senator Ted Stevens wrote].                                                                           
                                                                                                                                
4:24:17 PM                                                                                                                    
                                                                                                                                
MYRON  NANENG,   Sr.,  President,  Association   Village  Council                                                               
Presidents, stated  that the  association represents  56 villages                                                               
on  the Yukon  Kuskokwim  Delta.   He said  he  is testifying  in                                                               
support  of  HB   288  because  it  is   considered  an  economic                                                               
opportunity for the region, which  is economically depressed.  He                                                               
thanked  Representative  Herron  for  the bill.    He  hoped  the                                                               
committee would  support it since  it will make a  difference for                                                               
the youth in the region.                                                                                                        
                                                                                                                                
4:25:26 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT referred  to page 8, lines  15-17, and the                                                               
reason for the  language.  She wondered why they  would be giving                                                               
loans  for fishing  vessels and  fishing  quotas.   She said  she                                                               
didn't object to the construction  or rehabilitation or expansion                                                               
of  a plant  or facility;  however, she  expressed concern  about                                                               
financing a fishing  vessel that would fish in the  Bering Sea or                                                               
the Arctic.   She noted other loan programs exist  and the reason                                                               
for such a "high mark" for the Arctic.                                                                                          
                                                                                                                                
4:26:58 PM                                                                                                                    
                                                                                                                                
MARK  R.  DAVIS,  Deputy  Director,  Infrastructure  Development,                                                               
Alaska  Industrial  Development  and  Export  Authority  (AIDEA),                                                               
Department   of  Commerce,   Community  &   Economic  Development                                                               
(DCCED),  referred to  page 7,  which contains  the concept  that                                                               
none of  the loans  can be less  than $7 million.   He  said that                                                               
AIDEA did not  want to interfere with the  existing programs, but                                                               
in particular,  for quotas,  there isn't  any program  to provide                                                               
for financing.  He hoped that  AIDEA would be poised to work with                                                               
the banking community  to provide for a quota  and repatriate, if                                                               
possible, back to the State of Alaska.                                                                                          
                                                                                                                                
4:27:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT asked if Alaskan companies could benefit.                                                                
                                                                                                                                
MR.   DAVIS  answered   yes;  He   thought  the   private  public                                                               
partnerships (P3) realm  that AIDEA works in represents  a lot of                                                               
capital.    He envisioned  a  concerted  business plan  that  may                                                               
involve the  restructuring of a  fishing company, but he  did not                                                               
think it would happen very often.                                                                                               
                                                                                                                                
4:28:11 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON asked whether this  would apply to vessels documented                                                               
outside Alaska but fishing in northern waters.                                                                                  
                                                                                                                                
MR.  DAVIS answered  that  it  would, which  is  why AIDEA  would                                                               
likely want  to have  the collateral  for the  loan now  plus the                                                               
quota shares  restricted to uses  in the Alaska  fisheries; thus,                                                               
it would tie the two together.                                                                                                  
                                                                                                                                
CHAIR OLSON  asked whether those  fishermen have access  to other                                                               
programs and may compete against Alaskans.                                                                                      
                                                                                                                                
MR. DAVIS said he  doesn't think so, but the loan is  set at a $7                                                               
million  minimum  since AIDEA  did  not  want to  interfere  with                                                               
existing programs the state has for fisheries.                                                                                  
                                                                                                                                
4:29:12 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT related her  understanding this could help                                                               
out-of-state large companies purchase quotas.                                                                                   
                                                                                                                                
MR. DAVIS pointed out that the  loans would have to be consistent                                                               
with  AIDEA's other  statutes, which  require AIDEA  to alleviate                                                               
unemployment in the  state and be concerned with  programs in the                                                               
state.   Thus, AIDEA  would need  a nexus to  Alaska in  order to                                                               
make loan.                                                                                                                      
                                                                                                                                
4:29:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MILLETT  asked whether AIDEA follows  the loan and                                                               
tracks the number  of Alaskans employed by the  vessel during the                                                               
course of the loan.                                                                                                             
                                                                                                                                
MR. DAVIS answered yes; that  with the current loan participation                                                               
program, which lends  to real estate, AIDEA  does precisely that,                                                               
as well as tracking in the SETS fund.                                                                                           
                                                                                                                                
4:30:19 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MILLETT related  a  scenario in  which a  company                                                               
purchases a  quota and shares.   She asked whether they  could in                                                               
turn the loan to someone else.                                                                                                  
                                                                                                                                
MR.  DAVIS  answered  that  AIDEA usually  does  not  permit  the                                                               
transfer  of  any  AIDEA loan  without  written  permission  with                                                               
termination  consistent  with  their  statutes.    He  said  that                                                               
typically  AIDEA  includes a  clause  that  any transfer  without                                                               
permission would accelerate the loan  and it would immediately be                                                               
due in full with interest.                                                                                                      
                                                                                                                                
4:31:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE CHENAULT  related a scenario in  which funds could                                                               
be used for  port expansion at Seward.  It  would allow Seward to                                                               
expand its  port and  bring back  fishing vessels  that currently                                                               
are  docked in  Seattle and  Washington  areas.   It would  bring                                                               
boats back  to Alaska and Alaskans  would work on the  boats.  He                                                               
asked whether that is correct.                                                                                                  
                                                                                                                                
MR. DAVIS  answered yes; AIDEA  has been in contact  with various                                                               
ports, including the Port of Seward.   He said that AIDEA is very                                                               
interested in wanting  to create more jobs in the  local port and                                                               
the fishing fleet is very labor intensive.                                                                                      
                                                                                                                                
4:32:18 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  wondered if a  company from the  Lower 48                                                               
could obtain  an AIDEA loan from  the AIDF and generate  work for                                                               
Alaskans, but not necessarily owned by Alaskans.                                                                                
                                                                                                                                
MR.  DAVIS  answered  yes;  AIDEA can  make  loans  to  companies                                                               
domiciled outside Alaska,  but the economic impact  would need to                                                               
be in  the state  in order for  them to make  the loan,  which is                                                               
also under AIDEA's current statutes.                                                                                            
                                                                                                                                
4:33:01 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  asked how  he anticipated the  loan funds                                                               
to be used and whether it  is for large infrastructure, likely to                                                               
be more for quotas.                                                                                                             
                                                                                                                                
MR. DAVIS offered his view, which  is that this would be used for                                                               
large infrastructure.  He reminded  members he is the director of                                                               
infrastructure for AIDEA.  He  has been working on large projects                                                               
for roads  to resources (R2R).   He thought this  would primarily                                                               
be  used for  ports.   It  does have  the quota  portion, but  he                                                               
envisioned this would be used  for infrastructure for ports, such                                                               
as the Port  of Seward to try  to keep vessels in  our waters and                                                               
jobs in Alaska.                                                                                                                 
                                                                                                                                
4:33:53 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE REINBOLD  expressed her  concern on page  7, lines                                                               
27-31; and on  page 8, lines 15-19.  She  offered her support for                                                               
infrastructure in the  Arctic, but not for  fishing vessels given                                                               
the tight budget.                                                                                                               
                                                                                                                                
MR. DAVIS answered that traditionally  how the industries work in                                                               
the Arctic for  the Bering Sea fleet is that  the lending goes to                                                               
the ship which  serves as collateral for the quota.   He said the                                                               
AIDEA  tries to  track  the current  commercial  practice in  the                                                               
fleet.  He  related the goal is  to tie the vessel  to the Alaska                                                               
based loan and  the vessel would be kept in  Alaska waters in the                                                               
off season, but would fish in Alaska's waters during the season.                                                                
                                                                                                                                
REPRESENTATIVE   REINBOLD    reiterated   she    supports   large                                                               
infrastructure, but she found this to be "a real stretch."                                                                      
                                                                                                                                
4:35:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    HERRON   responded    that   he    wants   this                                                               
infrastructure to be  solid assets and not apply to  fishing.  He                                                               
related his understanding that Seward  plans to expand, and other                                                               
ports  typically  used by  the  fishing  fleet will  provide  the                                                               
nexus.  He asked if this is the nexus Mr. Davis envisions.                                                                      
                                                                                                                                
MR.  DAVIS answered  that is  correct.   For example,  he related                                                               
that  AIDEA is  an owner  of  the Ketchikan  Alaska Shipyard  and                                                               
recently that  shipyard built the  only vessel in the  fleet that                                                               
is kept in Alaska.  He  stated that AIDEA would like more vessels                                                               
to be  built, maintained, and kept  in Alaska in the  off season,                                                               
which would generate  more income for the state  from the fishing                                                               
fleet.   He offered his belief  that most of the  fleet exits the                                                               
state at the end of the season.                                                                                                 
                                                                                                                                
4:36:49 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER said  in the  last couple  of years  that                                                               
AIDEA's mission, funding levels,  and loan capacity has expanded.                                                               
He  asked  whether  there  are  any  limits  to  AIDEA's  growth,                                                               
mission, and magnitude.                                                                                                         
                                                                                                                                
MR. DAVIS pointed out that he  worked with the legislature on the                                                               
SETS fund  and this bill  tracks the SET  funds.  Thus,  the idea                                                               
for expansion is  that AIDEA would have specialized  funds and as                                                               
with the  Interior Energy project, the  legislature could provide                                                               
AIDEA  with additional  bonding or  funds  to be  used for  those                                                               
purposes.   In fact,  that's the reason  there isn't  any funding                                                               
associated with  it.   He said  he considers  it a  joint venture                                                               
between AIDEA  and the  legislature to decide  how to  deploy the                                                               
state's resources.                                                                                                              
                                                                                                                                
4:38:00 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER asked whether AIDEA supports the bill.                                                                   
                                                                                                                                
MR. DAVIS  answered that AIDEA  supports the  bill so long  as it                                                               
contains the  provision in subsection  (d) that AIDEA  can't make                                                               
the  loans for  less than  $7 million.   He  referred to  page 7,                                                               
lines  16-17,  which   states  that  AIDEA  "may   not"  use  the                                                               
infrastructure fund, but on line  27, it reads, "may not provide"                                                               
which creates  a double  negative.  Thus,  AIDEA would  propose a                                                               
slight change in  the language, but he supports  AIDEA not making                                                               
loans  in the  federally-managed fishery  below $7  million.   He                                                               
stated that AIDEA  would like to preserve  other programs already                                                               
in existence.                                                                                                                   
                                                                                                                                
4:38:57 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON referred  to  page 7,  lines 24-26,  to                                                               
subsection (c) and asked for the intent of this language.                                                                       
                                                                                                                                
MR. DAVIS answered that subsection  (c) only becomes effective if                                                               
there were  funds in the fund;  however, until it is  funded then                                                               
nothing in  the Arctic infrastructure  development fund  could be                                                               
used for security as a bond.   Again, as with the Interior Energy                                                               
project,  this new  fund  would  be used  in  conjunction with  a                                                               
decision by the legislature to fund it.                                                                                         
                                                                                                                                
4:39:51 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOSEPHSON  asked who  AIDEA envisions would  be an                                                               
investor.   He  related a  scenario in  which Alaska  developed a                                                               
port at the deepest water location  in the Arctic, in which loans                                                               
are made  not to  exceed one-third  for that  project.   He asked                                                               
whether the entity would be a company like Crowley Maritime.                                                                    
                                                                                                                                
MR.  DAVIS  answered  that  AIDEA   would  be  looking  at  large                                                               
infrastructure  funds,  perhaps  pension  funds  that  invest  in                                                               
infrastructure.    For  example,  a   potential  partner  in  the                                                               
Interior  energy  project  is  a pension  fund  that  invests  in                                                               
infrastructure.   He  believed  that  other infrastructure  funds                                                               
would also  be interested  assuming the  port would  generate the                                                               
revenue to pay off the debt.                                                                                                    
                                                                                                                                
4:41:02 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOSEPHSON asked  for further  clarification.   He                                                               
asked whether investors would use their pension dollars.                                                                        
                                                                                                                                
MR. DAVIS answered that in  the Interior energy project, which is                                                               
a  proposed trucking  operation with  an LNG  plant on  the North                                                               
Slope to truck  to Fairbanks.  The potential  partner approved by                                                               
AIDEA  on  January   14  is  a  pension  fund   that  invests  in                                                               
infrastructure.                                                                                                                 
                                                                                                                                
REPRESENTATIVE JOSEPHSON  was unsure that  is how he  would spend                                                               
his pension dollars.                                                                                                            
                                                                                                                                
4:41:32 PM                                                                                                                    
                                                                                                                                
RON LONG,  Assistant City Manager,  City of Seward,  testified in                                                               
support of HB 288, Version N.   He heard Seward mentioned several                                                               
times today, but  in all fairness, this bill  could apply equally                                                               
to several other ports around  the state and represents an effort                                                               
to  build  the  infrastructure  to  support  development  in  the                                                               
Arctic.  He  indicated that this effort will take  place in terms                                                               
of  staging  from  somewhere  outside  the  region  described  in                                                               
Section 11  until sufficient infrastructure  can support it.   He                                                               
said he did  not want to see the entry  level position be located                                                               
in  Tacoma or  Bellingham,  but to  be  in Alaska.    He said  he                                                               
supports  the language  in  the  last part  of  Section  11.   He                                                               
referred to the  fisheries and offered his belief  that AIDEA has                                                               
sufficient expertise  to ensure that the  economic impacts accrue                                                               
to  Alaska, whether  it is  through  a tiered  entry system  that                                                               
makes eligibility to Alaskan Corporations  first, then to outside                                                               
entities if sufficient funds exist.   He emphasized his hope that                                                               
the economic impact will accrue to  Alaskans whether it is to the                                                               
local economy or  the state treasury.   Although those approaches                                                               
may be different  ways of measuring success,  "we're all Alaskans                                                               
and we can all benefit from it.                                                                                                 
                                                                                                                                
4:43:36 PM                                                                                                                    
                                                                                                                                
STEVE  TRIMBLE,  President,  Trimble  Strategies,  stated  he  is                                                               
testifying today in  support of HB 288, a bill  that would create                                                               
an Arctic infrastructure development fund  within AIDEA.  He read                                                               
from  a  prepared  statement, as  follows  [original  punctuation                                                               
provided]:                                                                                                                      
                                                                                                                                
     The Arctic is the future  of Alaska, and we must invest                                                                    
     in  infrastructure now  if we  are to  have a  place of                                                                    
     meaning in  the future  of the global  arctic frontier.                                                                    
     Industry   has  responded   to  the   call  of   public                                                                    
     investment through  the SETS fund  and the time  is now                                                                    
     to   further  additional   public-­private  investments                                                                    
     within Alaska.  The era of "easy  money" is approaching                                                                    
     its end  in our state and  the age of "smart  money" is                                                                    
     now upon us.                                                                                                               
                                                                                                                                
     Enabling  AIDEA  through  the creation  of  the  Arctic                                                                    
     Infrastructure Program/  Fund and the  additional tools                                                                    
     that CS Version N for  HB 288 provides is an investment                                                                    
     in  "smart   money"  for  the   future  of   Alaska.  I                                                                    
     appreciate your  consideration in hearing  my testimony                                                                    
     today in support of HB 288.                                                                                                
                                                                                                                                
[HB 288 was held over.]                                                                                                         
                                                                                                                                

Document Name Date/Time Subjects
SB159 ver N.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Sponsor Statement.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Sectional Analysis.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Fiscal Note-DCCED-DOI-2-10-14.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Email Clay Bezenek 3-13-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Airlift Northwest 11-22-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Ernest Bliss 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Jane Bliss 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Janet Buness 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Maureen Maxand 2-29-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter SOA Div Ins to Airlift Northwest 7-16-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter SOA Div Ins to Dina Yunker 11-12-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents–Letter SOA Div Ins to Dina Yunker, 11-19-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter SOA to Airlift Northwest AirCare 11-12-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Theresa Allen 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-Letter Walter Moorhead 2-19-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-News Article-Chilkat Valley News 12-5-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-News Article-CoastAlaska News 11-26-2013.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
SB159 Supporting Documents-News Article-Juneau Empire 1-20-2014.pdf HL&C 3/17/2014 3:15:00 PM
SB 159
HB288 Draft Proposed Blank CS ver N.pdf HL&C 3/17/2014 3:15:00 PM
HB 288
HB288 ver N Sectional Analysis.pdf HL&C 3/17/2014 3:15:00 PM
HB 288
HB288 Supporting Documents-Arctic Infrastructure Fund for AIDEA.pdf HL&C 3/17/2014 3:15:00 PM
HB 288
HB281 ver A.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281(HSS) ver U.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Sponsor Statement.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Fiscal Note-DCCED-CBPL-02-06-2014.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Draft Proposed Amendment U.1.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Summary of Changes ver A to ver U.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-Rand Study.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-Teladoc Press Release.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-DOLWD Census Data.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Supporting Document-Letter Teladoc2-10-2014.pdf HL&C 3/17/2014 3:15:00 PM
HB 281
HB281 Opposing Document-Email-ASMB 1-28-2014.pdf HL&C 3/17/2014 3:15:00 PM
HB 281