Legislature(1997 - 1998)
02/25/1998 01:40 PM House FIN
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
February 25, 1998
1:40 P.M.
TAPE HFC 98 - 41, Side 1.
TAPE HFC 98 - 41, Side 2.
TAPE HFC 98 - 42, Side 1.
TAPE HFC 98 - 42, Side 2.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 1:40 P.M.
PRESENT
Co-Chair Therriault Representative Kelly
Representative Grussendorf Representative Mulder
Representative J. Davies Representative Martin
Representative G. Davis Representative Moses
Representative Foster
Representatives Hanley and Kohring were not present for the
meeting.
ALSO PRESENT
Mike Tibbles, Staff, Representative Gene Therriault;
Barbara Cotting, Staff, Representative Jeannette James;
Janice Adair, (Testified via Teleconference), Director,
Division of Environmental Health, Department of
Environmental Conservation, Anchorage; Steve Borell,
(Testified via Teleconference), Executive Director, Alaska
Miners Association, Anchorage; Jerry Reinwand,
Representative for the Chemical Specialty Manufacturers
Association, Juneau; Mike Conway, Director, Air/Water
Quality Division, Department of Environmental Conservation;
Bob Bartholomew, Deputy Director, Income and Excise Tax
Division, Department of Revenue; Mark Hickey, Representing
the Petro Marine Services, Juneau; Paul Fuhs, Court
Consultant, City of Nome; Keith Laufer, Manager, Financial
and Legal Affairs, Alaska Industrial Development and Export
Authority (AIDEA), Anchorage; Randy Simmons, Executive
Director, Alaska Industrial Development and Export
Authority (AIDEA), Anchorage.
SUMMARY
HB 144 An Act authorizing the Department of
Environmental Conservation to charge certain fees
relating to registration of pesticides and
broadcast chemicals; and providing for an
effective date.
HB 144 was held in Committee for further
consideration.
HB 239 An Act relating to the liability of motor fuel
dealers for payment of tax imposed on certain
credit transactions involving motor fuel sales or
transfers that become worthless debts or on sales
or transfers to persons who declare bankruptcy;
and providing for an effective date.
HB 239 was HELD in Committee for further
consideration.
HB 386 An Act relating to the financing authority,
programs, operations, and projects of the Alaska
Industrial Development and Export Authority; and
providing for an effective date.
HB 386 was HELD in Committee for further
consideration.
HOUSE BILL NO. 144
"An Act authorizing the Department of Environmental
Conservation to charge certain fees relating to
registration of pesticides and broadcast chemicals;
and providing for an effective date."
BARBARA COTTING, STAFF, REPRESENTATIVE JEANNETTE JAMES,
explained that HB 144 had been submitted at the request of
the Alaska Department of Environmental Conservation (DEC),
Division of Environmental Health.
She advised that DEC oversees the use of pesticides in
Alaska, a service which consists of applicator training and
certifications, issuing permits for public use projects,
and ensuring pesticides are used correctly, which includes
that manufacturers register their products with the State.
Ms. Cotting noted that the program would be partially
funded by the federal government with a State match.
Each state pays for its share of the pesticide program
through a registration fee levied ON chemical
manufacturers. DEC would like to implement this in Alaska,
but statutory authority would be required. At this time,
no Alaskan would be required to pay the fee since there are
no chemical manufacturers in the State. DEC initially
proposed to charge $100 fee per label. Ms. Adair thought
that rate would not impact the large manufacturers' bottom
line, but would instead have a positive impact on the
general fund providing a projected annual savings of
$56,600 dollars to be replaced by program receipts.
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT,
provided a sectional analysis of the proposed legislation,
work draft #0-LS0573\B, Lauterbach, 2/24/98. He pointed
out that Section #1 would provide language from the
original bill indicating that the Department would have the
authority to collect fees for the registration of
pesticides and broadcast chemicals. It would also
eliminate the Department's authority to charge fees for
"other services provided by the Department".
Section #2 would establish a new subsection (e), which
would permit the Department to collect fees relating to
water and wastewater operator training. That item would be
singled out into its own subsection because it no longer
would appropriately fit under the direct costs of
permitting.
Mr. Tibbles continued, Section #2 would also establish a
new subsection (f) which would divide pesticides and
broadcast chemicals into two classifications; one being
restricted use chemicals under federal regulation, and the
second, all other pesticides (targeting household chemicals
such as bleach, disinfectants and insect repellents). The
fee for restricted use chemicals has been established at a
higher rate to account for the greater administrative costs
associated with those chemicals.
Additionally, Section #2 would establish a new subsection
(g) which would prohibit the Department from charging an
hourly fee under (a) of that section.
Co-Chair Therriault spoke to the fiscal impact relating to
the committee substitute. If some of the program receipt
authority was removed for something that already had a fee,
the Department would no longer then have that authority.
The Department would need to be backed by general funds
which should be reflected in the fiscal note.
JANICE ADAIR, (TESTIFIED VIA TELECONFERENCE), DIRECTOR,
DIVISION OF ENVIRONMENTAL HEALTH, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, commented to the concerns
presented by the proposed committee substitute. Currently,
there is an hourly fee charged for solid waste, requested
by municipalities that did not want to subsidize other
communities. She agreed that it would be easier for the
Department not to have an hourly fee, but that it had been
initiated at the communities request.
Last year, industrial solid waste was reflected in a
separate component. The Department was given authority to
cover all costs and travel through the fees. Ms. Adair
continued, the Department recently completed a public
notice regarding the hourly fee rates. She advised that
the Department does not know how to implement such a
procedure without an hourly fee assessment unless the
client pays more.
Ms. Adair spoke to an additional concern for the Department
to provide site-specific determination for wastewater
permits. She recommended that Mike Conway address that
concern for Committee members.
Ms. Adair spoke to the deletion of "other surfaces
provided" and how that would affect communities need for
compliance with the certification process. The Department
is also responsible for providing sanitary surveys for
public water systems and a variety of functions, which are
not associated with the permit or plan aspect and in which
a fee is associated.
Co-Chair Therriault asked if the service would be
discontinued without the specific fee. Ms. Adair replied
that it would depend on the amount of general funds
allocated. She pointed out that the benefit about
implementing the fee is that those that use the service are
the ones who pay. General funds would not have that same
correlation.
STEVE BORELL, (TESTIFIED VIA TELECONFERENCE), EXECUTIVE
DIRECTOR, ALASKA MINERS ASSOCIATION, INC., ANCHORAGE,
pointed out that concern regarding user fees has surfaced
as State revenues have decreased. He questioned how much
of the DEC budget should be generated from user fees versus
how much should come from the general fund.
Mr. Borell stated that the Alaska Miners Association has
been working in collaboration with DEC, discussing changes
to user fee collection. He thought that HB 144 had
originally been written to address fees associated with
pesticides.
Mr. Borell spoke to the work draft. In Section #1, the
first item clarifies that the intent of existing statute AS
44.46.025(a) is to allow user fees for "the applicable
direct costs" for items listed, including certification of
federal water discharge permits and processing water
discharge permits. By the change proposed in removing the
language "and other services provided by the Department"
would clarify the intent and limit user fees applicable to
direct costs. He believed that DEC would then still be
able to charge user fees but that they would be limited to
direct costs.
Mr. Borell continued, Section #2, Line 26, the change would
prohibit DEC from charging hourly fees for the items
listed. He stated that this action would benefit DEC, as
well as private industry. He stressed that the difficulty
and cost to administer an hourly fees program is
significant.
Mr. Borell added that Alaska Miners Association has not had
the opportunity to determine if the changes in the "B"
version would affect DEC's ability to enter into
reimbursement agreements. He believed that it is important
for DEC to be able to enter into such agreements for large
projects. The agreements are negotiated between the
company and the State and would define work objectives, the
work to be done, the final products, and the time schedule
for completion. Major companies are generally not opposed
to such agreements if they provide increased certainty and
predictability of the total cost.
Co-Chair Therriault noted that the Committee could provide
the Alaska Miners Association clarification for the
reimbursable agreements. He asked if DEC was planning to
provide a fee packet of regulations for the storm water run
off.
MIKE CONWAY, DIRECTOR, AIR/WATER QUALITY DIVISION,
DEPARTMENT OF ENVIRONMENTAL CONSERVATION, replied to date,
there is not a package for those services and there is no
plan to create such a package. Currently, the Division has
the authority to charge a fee for that service.
Co-Chair Therriault asked if the language were changed to
"other direct services" as suggested by Representative J.
Davies, would that address the concern of the Alaska Miners
Association. Ms. Adair replied that the problem continues
to be solid waste. The Department would need to address
the decision made last year by the Legislature to have
industrial solid waste fully supported by fees.
Co-Chair Therriault questioned concerns regarding
pesticides contained in the legislation. Ms. Adair
responded that the Department is trying to cover $55,500
dollars, the federal grant match received for pesticide
management in Alaska. She discussed the distinction
between restricted use pesticides which are more regulated
and those that cause problems because of their high toxic
levels.
Representative J. Davies asked the amount, which could be
considered problematic. Ms. Adair responded that it would
be important to determine how many pesticides would be
considered restricted use. The registration program is
only a few months old. Originally, the Division requested
that a temporary registration fee of $100 dollars be in
place until a regulatory limit had been established. After
the market survey had been completed, the Division realized
that $100 dollars was too high and decided that $50 dollars
should be the cap.
Representative J. Davies asked if a general fee would be in
place until regulations had been adopted. Ms. Adair noted
that it would. She had envisioned doing it in a regulatory
process, which would provide an opportunity to work with
those affected by the change.
Representative J. Davies asked if there would be any impact
on the reimbursement agreements. Ms. Adair stated that
there would not, although, she asked if a prohibition on
hourly fees would be placed in statute for DEC regulations.
She questioned if that would be interpreted as a
prohibition on the hourly fees and reimbursable services
agreement.
JERRY REINWAND, REPRESENTING THE CHEMICAL SPECIALITY
MANUFACTURERS ASSOCIATION, JUNEAU, noted that the groups
which he represents had provided a survey of the average
number of products per state, which amounted to
approximately 8800. A $100 dollar fee could create a
hardship. He noted that the Association would be more
comfortable with a statuary procedure in place and that a
system be established to create a reasonable number. He
believed that if the Department was delegated the
authority, they would be receiving taxation authority,
which is a concern for the private industry. Mr. Reinwand
added that the Association is also concerned with the
differentiation used between household products and
products used for commercial and industrial purposes.
Co-Chair Therriault inquired if there was information
available from other states regarding the more restrictive
amount. Mr. Reinwand replied that the consumer household
breakdown amounted to approximately 65% of the national
registration. Mr. Reinwand reiterated that by providing
the agency with the discretion could create a tax situation
and he felt that authority should be more appropriately
decided by the Legislature. He urged that a cap be
established.
Representative J. Davies pointed out that there is not a
good way to measure the number. He believed that Alaska
would have a lower amount than the national average.
Representative G. Davis voiced his concern with the section
of the bill which establishes the fees. He acknowledged
that many of the complaints received by the Department are
in regard to high fees.
Co-Chair Therriault noted that HB 144 would be HELD in
Committee for further discussion.
HOUSE BILL NO. 239
"An Act relating to the liability of motor fuel
dealers for payment of tax imposed on certain credit
transactions involving motor fuel sales or transfers
that become worthless debts or on sales or transfers
to persons who declare bankruptcy; and providing for
an effective date."
REPREESNTATIVE GARY DAVIS explained that the Alaska motor
fuel tax is an excise tax designed to be paid by the
consumer or user of the fuel. For administrative reasons,
state law requires the tax to be collected and paid by the
motor fuel wholesaler at the time the fuel is sold or
transferred. As a practical matter, the transaction often
occurs at the wholesale level with businesses that
subsequently resell the fuel to the consumer or user of the
fuel.
Representative G. Davis continued, in commercial
transactions of this nature, it is customary to extend
reasonable credit terms that may result in a deferral or
delay in the collection of both the debt and the motor fuel
tax by the dealer. In some cases, the debt may become
wholly or partially worthless because of a bankruptcy
filing.
HB 239 would allow motor fuel dealers in these cases to
receive a nonrefundable credit in an amount equal to the
tax previously remitted to the State. The credit would
only be applied against subsequent tax liabilities, and
could only be taken for sales with a total tax liability of
$500 or more.
The language specifies that dealers may only apply for a
bad debt credit by filing written proof of the bankruptcy
petition, or after reporting the debt as worthless on the
dealer's federal income tax return.
Representative Gary Davis summarized that HB 239 would
include a provision requiring repayment of the tax if the
account or debt was subsequently repaid, with partial
payments to be handled on a proportional or pro rata basis.
Co-Chair Therriault questioned the need for the "findings"
section. Representative G. Davis replied that section
indicates the process that the State must go through to put
the situation in place. He agreed that section could be
deleted.
Representative J. Davies recommended that the effective
date of the legislation must be changed. Representative G.
Davis agreed. Co-Chair Therriault noted that would occur
in the new committee substitute.
Representative Grussendorf emphasized the need of
establishing "other" revenue streams if the State continues
to give "breaks" to industry. Representative G. Davis
believed that $500 dollars tax owed, at eight cents a
gallon would be an equitable threshold. Co-Chair
Therriault pointed out that the tax would be written off
and that the refiner would take the "big hit".
BOB BARTHOLOMEW, DEPUTY DIRECTOR, INCOME AND EXCISE TAX
DIVISION, DEPARTMENT OF REVENUE, spoke to the Department of
Revenues (DOR) considerations with the proposed
legislation. Last year, when the Department went through
the process to change the motor fuel forms to increase the
compliance effort of the State, the forms were changed and
additional information was collected from the industry. At
that time, the industry brought up issues that they had
with businesses not paying their debts. DOR agreed to look
into it, and then discuss it internally as a policy issue.
At that time, other states were contacted regarding the
manner in which they addressed this concern. The
Commissioner believed that this was a reasonable tax from
an equity standpoint.
Mr. Bartholomew advised that the Division had established
"guardrails" as to who would have the authority, which then
lead to focusing on several sections of the bill:
? 1st - Going into bankruptcy and meeting the court
test for not having the financial assets to meet
the debts;
? 2nd - Meeting the IRS guidelines for writing off
a worthless debt.
He continued, one of those criteria must be met to be
eligible for the credit. The Division also has asked for a
bottom threshold. Other states recommended that there be
language to keep the small transactions out, consequently,
a limit was established.
Mr. Bartholomew continued, no cash refund would be given.
If a credit were claimed, it would come from a future tax
liability. The fiscal note is based on 1/10th of 1% of the
total sales or revenue coming into the State. The State
currently collects about $40 million dollars a year in
motor fuel revenues.
Representative Grussendorf asked if when the dealer buys
the gasoline in bulk, if he would have to pay the federal
tax on it. Mr. Bartholomew understood that the federal tax
was collected "further upstream" and that the manufacturer
or the distributor would have paid it.
Co-Chair Therriault questioned if motor fuel tax would
include marine fuel and highway fuel. Mr. Bartholomew
stated it would and applied to all motor fuel taxes under
Title 43, aviation, marine and highway.
Representative G. Davis pointed out that other states have
this in place, although, it is not used often. He reminded
members that other states do not have the seasonal industry
that Alaska does, which would make this legislation more
advantageous here.
Co-Chair Therriault referenced language proposed in the
amendment, which considers the total transaction. Mr.
Bartholomew understood that a typical tanker load would be
limited to one transaction and subject to the $500 dollar
limit. He acknowledged that it would be a rare occasion
when a customer with one shipment payment late would be cut
off. Usually the second or third shipment is where the
line would be drawn. Limiting it to single transaction
would not help. He believed that the transaction could
work given the other stipulations contained in the bill.
Co-Chair Therriault reiterated that no transaction would be
allowed once it was known that the business was bankrupt or
unwilling to pay the debt.
Co-Chair Therriault suggested that if a company was going
bankrupt, it would be prudent for the distributor to get a
letter of credit, rather than continue building that
potential debt. Mr. Bartholomew commented, some business
would attempt to get some type of security. If there was a
recovery by the company, they would then have to reimburse
the State for a portion of the credit, and that would be
prorated.
Representative Grussendorf asked if the company applying
for the credit would have to submit their IRS statements to
the State. Mr. Bartholomew replied that the Division would
require documentation of the bankruptcy files as a part of
the credit support.
MARK HICKEY, REPRESENTING - PETRO MARINE SERVICES, JUNEAU,
spoke in support of HB 239. He stated that the bill would
allow fuel dealers to receive a nonrefundable credit for
fuel taxes paid to the State for fuel sold on credit, but
not paid by purchasers, who had declared bankruptcy or
rendered their debt worthless. The bill would allow motor
fuel dealers to receive a nonrefundable credit in an amount
equal to the tax previously remitted to the State. The
credit would be applied against subsequent tax liabilities
only, and could be taken for sales with a total tax
liability of $500 dollars or more.
The legislation specified that dealers may only apply for a
bad debt credit by filing written proof of the bankruptcy
petition or reporting on the dealer's federal income tax
return that debts are worthless. Mr. Hickey commented that
Alaska Petro Marine Services believes that HB 239 would
provide a more fair and equitable adjustment to current
law.
The company supports the amendment. Mr. Hickey pointed out
the technical problem on Page 3, Section (f), regarding
protection. Current language could be interpreted that this
not apply to the transaction. He recommended that Line 22
be worded: "This section does not apply to a credit
transaction by" and keeping the remaining language. He
suggested, on Line 27 to insert "a" and delete "the".
Co-Chair Therriault spoke to Section (e), Page 3, Line 19,
in reference to the three-year period. Mr. Hickey
understood that language clarified that once a company has
a credit with an individual customer, they would not be
able to again apply when they ceased to pay the debt.
HB 239 was HELD in Committee for further consideration.
(Tape Change HFC 98- 42, Side 1).
HOUSE BILL NO. 386
"An Act relating to the financing authority, programs,
operations, and projects of the Alaska Industrial
Development and Export Authority; and providing for an
effective date."
RANDY SIMMONS, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), ANCHORAGE, spoke
in support of HB 386 which would continue AIDEA's bonding
authority powers and which would provide new tools to meet
the mission purpose to facilitate job creation, retention,
and helping diversify the economy.
Mr. Simmons noted that a sectional analysis had been
distributed identifying four major areas of change. He
spoke to bonding authorization, export guarantees, business
assistance changes, confidentiality provisions and loan
participation changes.
Mr. Simmons commented that any bonds over $10 million
dollars would come to the Legislature for authorization.
HB 386 would reauthorize general bonding authority for
AIDEA for certain types of bonds. The legislation would
also allow for the Authority to bond for projects such as
Ft. Knox at $71 million conduit dollars, Goat Lake at $23
million dollars and Craig Port (False Island Marine
Facility).
Representative J. Davies asked what a conduit bond was.
Mr. Simmons explained that a conduit bond was a bond issued
in AIDEA's name but which does not put the credit of the
Authority or the State at risk. The credit risk would
instead go with the owner of the facility or the person
actually financially responsible. Co-Chair Therriault
interjected that it would act as a conduit to enhance our
tax-free status.
Mr. Simmons continued, the State of Alaska is eligible to
receive only $150 million dollars a year in volume, which
is the ability to issue private activity bonds tax-exempt.
In the last four or five years, that was not important for
the State, as volume caps were not used much. He pointed
out that in the next three or four years, that will not be
the case. AIDEA now will be working with the State's
bonding committee in order to decide which projects should
be brought forward to use the volume cap for private
activity bonds.
The one change the Authority is requesting would be to
eliminate the sunset. The sunset was important when
development finance bonding was new, but now the Authority
has a very good track record. AIDEA will still come before
the Legislature for authorization of anything over $10
million dollars. Under the Loan Participation Program, the
Authority can obligate $10 million dollars cash.
Representative J. Davies asked if the annual business plan
had been subject to the Executive Budget Act. Mr. Simmons
replied that the operating budget was included in that
consideration.
Mr. Simmons pointed out that in the sectional analysis, the
Export Guarantee Program was the most confusing to
understand. The intent is to modify the program and merge
it into the already existing Business Assistance Program.
That program allows the Authority to guarantee 80% of a
loan up to $1 million dollars.
The program has not been used in the ten years it has been
available. Following a study provided by an outside
consultant, it was determined that the program was not
applicable for the State's needs. It had been designed
from other state programs appealing to a strong
manufacturing base, which Alaska does not have. The
program was also transactional based and required 25% value
added, which eliminated opportunities for Alaskan
distributors and transshipments. It also required that
there was export credit insurance on every transaction.
The proposed change incorporates the data recommended in
the study.
The program will be modified so that it will reflect the
cost of goods and services, the 25% value added will be
removed and it will be established that the business must
be Alaskan. Insurance will be left at the discretion of
the Authority in each transaction. The two programs would
be merged and called the Export Guarantee and Business
Assistance Program.
Representative J. Davies believed that State policy should
be to keep documents open to the public and that they be
kept confidential only upon request of the applicant. Mr.
Simmons assured Representative Davies that confidentiality
is requested every time there is an application. He
stressed that the Authority is a part of the public records
balancing act. The banks are required to keep the
information confidential. He noted that he would support
language proposed in Amendment #D.
KEITH LAUFER, MANAGER OF FINANCIAL AND LEGAL AFFAIRS,
ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY (AIDEA),
ANCHORAGE, commented on Amendment #D. He noted that
deleting "or complied by" as recommended by Representative
Davies would be detrimental as the Authority receives many
documents which need to be compiled into some form before
they are taken to the internal credit committee.
Representative J. Davies asked if a credit-reporting agency
would require that the information be kept confidential.
Mr. Laufer agreed that there would be a need to insure that
the information came from a source and was confidential
when received. "Compiled" versus "submitted" would be of
maximum concern to the Authority. The identity of the
applicant is a public item. That information should be
kept confidential. The information becomes public when
there is a formal application before the Authority.
Mr. Simmons spoke to the technical changes to the loan
participation program. The release of interest rates would
be in reference to the interest rates charged by the
Authority and not those charged by the bank.
Representative Martin voiced concern that the State could
become a loosing partner when making these types of
arrangements. Co-Chair Therriault distributed the current
confidentiality statute proposed for deletion. [Copy on
file]. Mr. Simmons explained that language was used
specifically in addressing the export program only. The
new confidentiality provision applies to all of AIDEA's
programs.
Mr. Simmons spoke to Amendment #B. [Copy on file]. The
proposed project would create a new entrance channel to the
inner port in Nome. The project also would include
construction of a new 28-foot breakwater that would be
built parallel to the existing causeway. The new entrance
channel would improve navigational safety and reliability,
and the breakwater would create a protected turning basin.
Part of the existing channel would be filled to provide a
new access road to the sand spit, which will be protected
by a rip rap seawall connecting to the existing wall in
front of town. The cost would be $30 million dollars.
PAUL FUHS, COURT CONSULTANT, CITY OF NOME, noted that the
City of Nome has already paid $550 thousand dollars for
studies accompanying the proposal. The Army Corps of
Engineers has indicated through the cost benefit analysis
justification of a $40 million dollar project. Their
estimate for the project is $26 million dollars. The City
of Nome has paid for all the bills associated with the
project to date. Federal procurement takes a long time to
put projects out to bid. If the State put it out to bid
and managed all concerns associated with that, the Corps
would then pay 80% of the project costs in the first year.
Of the $26 million dollars, AIDEA would be repaid $21
million.
Mr. Simmons pointed out that AIDEA has not yet worked out
the feasibility of the proposed project. Because of timing
concerns, the construction would be started late in the
fall, which would not give AIDEA the opportunity to come
back to the Legislature. To date, a finding has not been
initiated. As part of the enabling legislation, all the
approval must be accomplished before the project is
considered. He noted that AIDEA does support the
authorization of this project.
Representative Martin pointed out that $25 million dollars
had already been invested into this project. He understood
that there is a problem that the Corps had not dredged deep
enough to maximize for bigger ships entering the port.
Mr. Fuhs responded that the proposed port is the only port
available from Dutch Harbor upward. It is a regional port
serving that entire region, with the potential to serve
Russian fishing vessels.
Representative Martin reiterated concern that the port was
not deep enough. Mr. Fuhs replied that it could be dug
deeper. Because of the currents, it has been maintained at
21' for the past eight years.
Mr. Simmons stated that Nome's port has the second largest
volume of incoming cargo in the State. At present, it has
limited access, safety issues, and situation problems which
significantly burden the port. If a conduit bond were
used, ownership would change. If development finance
authority were used, AIDEA would have to own the facility.
If AIDEA determines that conduit revenue financing will
work, the Authority would not own it, but would give the
City of Nome the credit risk for the facility. Mr. Simmons
guaranteed that the proposed wording would not cut off the
Authority's bonding ability. If conduit bonding was
successful, the proposed language would not be used.
(Tape Change HFC 98- 42, Side 2).
Mr. Simmons spoke to the proposed Red Dog project. The
project would extend the existing dock by approximately
2,500 feet and a 50 foot shipping channel would be
excavated, allowing ships to directly load the
concentrates. The project would eliminate barge traffic
and expedite the loading process.
Mr. Simmons informed Committee members of the benefits of
the proposed project. It would allow shipping season to be
extended to December and would eliminate the twice handling
of concentrates by eliminating barge relay. The proposal
would lower vessel loading time in half and would reduce
down time caused by poor weather conditions.
Mr. Simmons concluded that in economic terms, the project
would extend most seasonal jobs at the port and would lower
the cost of shipping concentrates. Additionally, the
regional port at Red Dog would no longer be used at 100%
capacity, opening up shipping opportunities for other
potential users.
HB 386 was HELD in Committee for further consideration.
ADJOURNMENT
The meeting adjourned at 3:50 P.M.
H.F.C. 16 2/25/98
| Document Name | Date/Time | Subjects |
|---|