Legislature(2009 - 2010)HOUSE FINANCE 519
04/01/2009 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB90 |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 199 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 90 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 1, 2009
1:38 p.m.
1:38:27 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:38 p.m.
MEMBERS PRESENT
Representative Mike Hawker, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas, Jr., Vice-Chair
Representative Harry Crawford
Representative Anna Fairclough
Representative Richard Foster
Representative Les Gara
Representative Reggie Joule
Representative Mike Kelly
Representative Woodie Salmon
MEMBERS ABSENT
Representative Allan Austerman
ALSO PRESENT
Tyson Fick, Legislative Liaison, Department of Commerce,
Community and Economic Development; Eddy Jeans, Director,
School Finance, Department of Education and Early
Development; Christine Hess, Staff, Representative Joule
PRESENT VIA TELECONFERENCE
Ted Leonard, Executive Director, Alaska Industrial
Development and Export Authority, (AIDEA)
SUMMARY
HB 199 "An Act making supplemental appropriations and
capital appropriations; amending appropriations;
and providing for an effective date."
HB 199 was postponed.
HB 90 "An Act relating to bonding limitations and
confidentiality of records and information of the
Alaska Industrial Development and Export
Authority; and providing for an effective date."
CSHB 90 (FIN) was REPORTED out of Committee with a
"do pass" recommendation and with zero fiscal note
#1 by the Department of Commerce, Community and
Economic Development.
1:39:41 PM
HOUSE BILL NO. 90
"An Act relating to bonding limitations and
confidentiality of records and information of the
Alaska Industrial Development and Export Authority; and
providing for an effective date."
TED LEONARD, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY, (AIDEA), reported that he
had seen the amendments and was available for questions.
1:40:40 PM
Co-Chair Hawker MOVED to ADOPT Amendment 1:
Page 1, line 7:
Delete "and conduit revenue"
Vice-Chair Thomas OBJECTED.
Co-Chair Hawker explained that the legislation without the
amendment would have completely removed both the refunding
categories of bonds and new conduit revenue bonds from the
$400 million-a-year ceiling. He reported that he was
comfortable excluding refunding bonds, but conduit revenues
continue to put new money into the economy. Amendment 1
removes conduit revenue bonds from the exclusionary clause
and keeps them under the $400 million-a-year annual limit.
1:41:46 PM
Mr. Leonard understood Co-Chair Hawker's concerns and
believed AIDEA could work with that limit.
Vice-Chair Thomas WITHDREW his objection.
There being NO OBJECTION, it was so ordered.
1:43:01 PM
Representative Joule MOVED to ADOPT Amendment 2:
Page 1, line 2, following "Authority;":
Insert "relating to municipal taxation of interests in
certain property of the Alaska Industrial Development
and Export Authority; providing for an effective date
by amending the effective date of sec. 3, ch. 117, SLA
2000, as amended by sec. 2, ch. 74, SLA 2003, and by
sec. 3, ch. 67, SLA 2008;"
Page 3, following line 9:
Insert a new bill section to read:
"* Sec.7. Section 19, ch. 117, SLA 2000, as amended
by sec. 2, ch. 74, SLA 2003, and by sec. 3, ch. 67, SLA
2008, is amended to read: Sec. 19. Section 3 of this
Act takes effect November 30, 2012 [2009]."
Renumber the following bill section accordingly.
Co-Chair Stoltze OBJECTED.
Representative Joule related that in 1999, the state
assessor, for the first time, included the AIDA-owned DeLong
Mountain Transportation System (DMTS) in the assessment full
value determination for Northwest Arctic Borough. The
Transportation System includes a 52-mile road and port site
loading facility. Up to that point, the Northwest Arctic
Borough had received an exemption from the assessment of the
DMTS. Over the years the sunset date was extended.
Representative Joule explained that the amendment extends
the exemption until November 30, 2012. The full value
determination is used to calculate the required local share
for the school support. Including the DMTS increases the
local contribution for the Northwest Arctic School District.
Representative Joule noted that the DMTS is owned and
financed by AIDEA to encourage and enable development in
this remote area. He maintained that it is publically owned
and should not be included in the tax base. The Northwest
Arctic Borough does not have a tax base that it levies on
its property tax base. They do derive their revenues
through a payment in lieu of taxes (PILT) - an agreement
with the Red Dog Mine.
Representative Joule stressed that not including this
amendment would increase the burden on the Borough. The
PILT agreement is in effect until 2011. This amendment
addresses beyond that time frame. Without the extension the
Borough would have to renegotiate with the Red Dog Mine.
Representative Joule related that he has talked with the
administration which has indicated support. He said he
chose to go with an extension rather than a repeal so the
Borough assembly could fully deal with the issue. The
amendment sets the date out another 3 years beyond the time
frame when the PILT agreement would be taken up again. The
amendment is also supported by Teck Cominko, Ltd.
1:46:55 PM
Co-Chair Stoltze reported that it has been a long-term
issue.
Representative Kelly requested information from the
Department of Commerce, Community and Economic Development.
TYSON FICK, LEGISLATIVE LIAISON, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, offered to answer
questions.
Representative Kelly asked when the amendment would have an
effect on the Borough and what would happen if the amendment
was not adopted. Mr. Fick did not know.
AT-EASE: 1:50:20 PM
RECONVENED: 1:55:02 PM
Representative Kelly inquired when the amendment might take
affect. He understood that if the PILT can be renegotiated
in 2011, it would take place prior to the outcome of the
legislation. He read the amendment as an extension of an
exemption. He questioned if that was accurate.
Co-Chair Stoltze pointed out that the administration would
like to find a solution before the end of its term. Mr.
Fick agreed.
Representative Kelly concluded that it was truly an
extension.
Representative Joule reported that there was an offer to
repeal, but after consultation with the Borough, he thought
an extension would be better. The mine was recently
assessed and negotiation with the Borough took place at that
time. The state assessor and others involved support the
amendment.
Co-Chair Stoltze asked if the administration could be made
available to answer questions on the House Floor. Mr. Fick
reported that they could.
1:59:42 PM
Representative Kelly summarized his understanding of the
bill. The date of the extension takes place before the
meetings on the PILT between the Borough and the Red Dog
Mine.
EDDY JEANS, DIRECTOR, SCHOOL FINANCE, DEPARTMENT OF
EDUCATION AND EARLY DEVELOPMENT, clarified that the way the
full value determinations works is that there is a two-year
delay before it impacts the foundation program. For
example, the full values that were issued in October of 2008
were the full values used to determine the FY10 budget
request.
Representative Kelly summarized that if this extension is
not put into place, extra costs to the Borough could not be
recovered through the PILT negotiations in November of 2011.
Mr. Jeans summarized that based on the dates discussed, the
required local effort would be established before the PILT
is reopened for negotiation. Representative Kelly asked if
it has a real affect before negotiations. Mr. Jeans did not
know. Representative Kelly restated his question. He asked
if the Borough has to come up with some money because they
couldn't get it covered through the PILT negotiations
without the extension. Mr. Jeans explained that the
required local effort would increase in FY12.
2:03:42 PM
Representative Kelly concluded that it needs to be done in
order to give the administration a chance to work this out
so that the Borough has enough time to negotiate the PILT
payments with Teck Cominko. He surmised that it wouldn't
have to be extended another time.
Representative Joule thought that part of the negotiation
has to do with the price of the commodity.
CHRISTINE HESS, STAFF, REPRESENTATIVE JOULE, explained that
price would be a part of the negotiation process, but it
would not be guaranteed. If commodity prices did not
recover and Red Dog was not doing very well, there is a real
possibility that the Northwest Arctic Borough's PILT could
decrease.
Representative Kelly wondered if, under the aforementioned
scenario, it would fall on the Borough to pay the education
piece or to convince the state to pay it. Ms. Hess added
that there is an argument that it is a publicly owned road.
She commented on the substantial increase of the fair value
determination on the Red Dog Mine recently.
Representative Kelly understood that the administration was
comfortable with the amendment as long as there was a
discussion of it.
2:06:57 PM
Co-Chair Hawker referred to a letter from the governor dated
April 12, 2008, which deals with the first extension. He
quoted, "It is long past time to assemble the various
parties and resolve this situation on a permanent basis."
The governor voiced concern about the impact on the
Northwest Borough School District. He quoted the letter,
"As such, I am willing to support a short extension of time
on the previous law so that the question will be resolved
during my term in office. You have my assurance that the
administration will not defer this question."
Co-Chair Hawker voiced concern about the date on the
amendment. It goes beyond the term of the current
administration and acts as a safety valve. He wanted Mr.
Fick's assurance that the matter would be resolved before
the governor leaves office. Mr. Fick gave his assurance.
2:09:04 PM
Ms. Hess reported that the original request was for a longer
extension.
Representative Kelly suggested changing 2012 to 2011.
Ms. Hess emphasized that 2012 is preferred so that
negotiations could be concluded. Representative Kelly
commented that his concern is that the actual impact of the
amendment would take place in 2013. He asked Mr. Jeans if a
date of 2012 would have an actual effect in 2013.
Mr. Jeans clarified that if the extension is made through
2011, it will show up on the 2012 full value, which would be
the 2014 budget request.
2:11:32 PM
Representative Kelly MOVED to ADOPT an amendment to
Amendment 2:
On line 11
Change 2012 to 2011
Co-Chair Stoltze OBJECTED.
Representative Kelly said the purpose would be to enter into
a debate and get it settled.
2:12:23 PM
Representative Joule preferred to keep 2012.
A roll call vote was taken on the motion.
IN FAVOR: Kelly, Salmon
OPPOSED: Thomas, Crawford, Fairclough, Foster, Gara, Joule,
Hawker, Stoltze
Representative Austerman was absent from the vote.
The MOTION FAILED (2-8).
Co-Chair Stoltze MAINTAINED his objection to Amendment 2.
A roll call vote was taken on the motion to adopt Amendment
2.
IN FAVOR: Salmon, Thomas, Crawford, Fairclough, Gara, Joule,
Stoltze, Hawker
OPPOSED: Foster, Kelly
Representative Austerman was absent from the vote.
The MOTION PASSED (8-2). Amendment 2 was adopted.
Co-Chair Stoltze noted a zero fiscal note by the Department
of Commerce, Community and Economic Development.
2:15:23 PM
Co-Chair Hawker MOVED to REPORT HB 90, as amended, out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 90 (FIN) was REPORTED out of Committee with a "do pass"
recommendation and with zero fiscal note #1 by the
Department of Commerce, Community and Economic Development.
ADJOURNMENT
The meeting was adjourned at 2:16 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB090 Hawker Amendment 1(v.2).pdf |
HFIN 4/1/2009 1:30:00 PM |
HB 90 |
| HB 90 Amendment 2 R 1.pdf |
HFIN 4/1/2009 1:30:00 PM |
HB 90 |