Legislature(2015 - 2016)BILL RAY CENTER 208
06/15/2016 03:00 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB246 | |
| Recessed to a Call of the Chair | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 246 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
FOURTH SPECIAL SESSION
June 15, 2016
3:16 p.m.
3:16:14 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 3:16 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Co-Chair
Representative Steve Thompson, Co-Chair
Representative Dan Saddler, Vice-Chair
Representative Bryce Edgmon
Representative Les Gara
Representative Lynn Gattis
Representative David Guttenberg
Representative Scott Kawasaki
Representative Cathy Munoz
Representative Lance Pruitt
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Gene Therriault, Deputy Director, Statewide Energy Policy
Development, Alaska Energy Authority, Department of
Commerce, Community and Economic Development; Jerry
Burnett, Deputy Commissioner, Treasury Division, Department
of Revenue; Fred Parady, Deputy Commissioner, Department of
Commerce, Community, and Economic Development;
Representative Lora Reinbold; Representative Paul Seaton;
Representative Same Kito III.
SUMMARY
HB 246 AIDEA: FUNDS; LOANS; PROGRAMS; DIVIDEND
CSHB 246(FIN) was REPORTED out of committee with
a "do pass" recommendation and with a new zero
fiscal note from the Department of Commerce,
Community and Economic Development.
HOUSE BILL NO. 246
"An Act creating the oil and gas infrastructure
development program and the oil and gas infrastructure
development fund in the Alaska Industrial Development
and Export Authority; relating to the interest rates
of the Alaska Industrial Development and Export
Authority; relating to the sustainable energy
transmission and supply development and Arctic
infrastructure development programs of the Alaska
Industrial Development and Export Authority; relating
to dividends from the Alaska Industrial Development
and Export Authority; and adding definitions for 'oil
and gas development infrastructure' and 'proven
reserves.'"
3:16:50 PM
Co-Chair Thompson MOVED to ADOPT Amendment 1 [29-GH2613\W.3
(Nauman/Shutts, 6/13/16)]:
Page 8, lines 20-21:
Delete "for expenditures on the oil and gas field
under AS 43.20.043, AS 43.55.023, or 43.55.025"
Insert "under AS 43.55.023 for expenditures on the oil
and gas infrastructure development financed under AS
44.88.880"
Co-Chair Neuman OBJECTED for discussion.
GENE THERRIAULT, DEPUTY DIRECTOR, STATEWIDE ENERGY POLICY
DEVELOPMENT, ALASKA ENERGY AUTHORITY, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained the
amendment. He stated that the effect of Amendment 1 was to
modify the current prohibition in the bill pertaining to
the request of tax credits. The current language signified
that if an entity was developing an oil and gas field and
wanted to utilize financing offered by the proposed fund,
from the day the borrowing was initiated it would not be
possible to request credits for the development. The
amendment would shrink the prohibition so the prohibition
of future tax credits would be limited to the
infrastructure that the AIDEA loan helped to fund. If there
was additional drilling in the field or delineation, the
company would still have the ability to apply for credits.
Representative Gara discussed his understanding of the
amendment.
Co-Chair Thompson surmised that if a company took out a
loan to build a warehouse, things aside from what the loan
was for would be eligible for credits.
Mr. Therriault agreed.
Co-Chair Thompson noted that the company could not "double-
dip" on the warehouse and use it as infrastructure.
Representative Gara stated that the tax credits applied to
the overall spend. He wondered how the state would
ascertain what the credits were being used for.
Mr. Therriault thought the last part of lines 4 and 5 of
the amendment stated that the development financed under
the new program would not be eligible.
Representative Gattis understood that the amendment was
excluding from the tax credits what may have been borrowed
under the proposed program.
Mr. Therriault replied in the affirmative. He detailed the
one would not be able to apply for a credit against the
expenditure.
Representative Guttenberg asked about the ability to track
the differences between a loan under the proposed program
and the tax credits.
3:21:17 PM
AT EASE
3:21:33 PM
RECONVENED
JERRY BURNETT, DEPUTY COMMISSIONER, TREASURY DIVISION,
DEPARTMENT OF REVENUE, stated that the way the amendment
was written, it referred to oil and gas infrastructure
development financed under AS 44.88.880. He explained that
when a company applied for a tax credit it would either be
a net operating loss (NOL) credit or a specific directed
credit. A NOL credit would be reduced by the amount of
expenditures, and would reduce the credit by an amount
equivalent to expenditures applied against a credit. He
confirmed that it would be possible to track the amount of
expenditure and apply it to calculation of the tax credits.
3:22:43 PM
AT EASE
3:22:48 PM
RECONVENED
Representative Guttenberg asked for verification that
companies could not get a tax credit until work was
completed.
Mr. Burnett answered that the expenditures had to have been
made prior to application for tax credits.
Representative Kawasaki referred to deletions from the bill
and asked about AS 43.20.043 credits and AS 43.55.025
credits.
Mr. Burnett did not have the information on hand. He
believed the credits were exploration credits and one was
perhaps related to a NOL credit.
Mr. Therriault agreed. He elaborated that under the
original wording of the bill, accessing credits for that
type of activity would have been prohibited (even downhole
drilling) once AIDEA financing was utilized for surface
infrastructure. He continued that the amendment restricted
the prohibition again to the surface infrastructure, and
therefore would not impact the downhole drilling credits.
Co-Chair Neuman WITHDREW his OBJECTION. There being NO
further OBJECTION, Amendment 1 was ADOPTED.
3:24:58 PM
Vice-Chair Saddler MOVED to ADOPT Amendment 2 [29-
GH2613\W.6 (Wallace/Shutts, 6/14/16)]:
Page 6, line 5, following "than":
Insert "(A)"
Page 6, line 6, following "development;":
Insert "or
(B) $100,000,000;"
Page 6, line 15, following "than":
Insert "(A)"
Page 6, following line 16:
Insert a new subparagraph to read:
"(B) $100,000,000; or"
Co-Chair Neuman OBJECTED for discussion.
Vice-Chair Saddler discussed the amendment. He stated that
the bill's primary purpose was to create an Oil and Gas
Infrastructure Loan Fund. In reviewing the bill, he had
noted increases in the AIDEA participation limits in other
loan programs such as the SETS Loan Program, and the Arctic
Infrastructure Loan Program. He explained that the purpose
of Amendment 2 was to try and have the same kinds of
sideboards and limits on the dollar amount and
participation by percentage on the existing programs as was
proposed on the new oil and gas program. He noted he had
made a slight error on the amendment, and that he would be
offering a conceptual amendment to Amendment 2.
3:26:13 PM
AT EASE
3:27:02 PM
RECONVENED
Vice-Chair Saddler MOVED to ADOPT the conceptual amendment
to Amendment 2.
Co-Chair Thompson OBJECTED for discussion.
Vice-Chair Saddler discussed the conceptual amendment. He
specified that on line 3 of Amendment 2, the conceptual
amendment would insert the language "the lesser of" before
(a). Also on line 9 of Amendment 2, the conceptual
amendment would insert the words "the lesser of" before
paragraph 1. The third element of the conceptual amendment
to Amendment 2 was on page 8, line 7 of the bill would
insert the words "the lesser of" following the last word
"than."
Vice-Chair Saddler explained the purpose of the conceptual
amendment to Amendment 2 was to provide a clear test and
direction from the legislature to AIDEA of what the caps
should be on the loan programs for the SETS Fund, the
Arctic Infrastructure Development Fund, and for the
proposed Oil and Gas Infrastructure Fund.
Representative Guttenberg stated that the amendment would
change the number from $25 million to $100 million (or the
lesser of). He had two concerns. He wondered what
difference it made if the funds were not monetized. He was
concerned that depending upon what level the proposed fund
was monetized, a company might come with a large project
and take all the funds. He wondered how AIDEA would handle
such an eventuality.
Mr. Therriault answered that Representative Guttenberg was
correct in that the SETS Fund and the Arctic Infrastructure
Fund were not currently capitalized. He continued that
AIDEA may engage in a project that lent itself to going to
the bond market to capitalize the fund; or the legislature
could capitalize the fund sometime in the future. He
thought if a large project came forward that would use all
the available funds, the AIDEA board would consider whether
it would be a prudent decision to move forward.
Mr. Therriault continued, clarifying that the hard dollar
$100 million limit really only applied to direct loans.
There had been a suggestion that loan guarantee amounts be
adjusted from $20 million to $25 million; which would not
be impacted. The language in the bill signified that there
would be a hard dollar amount for the direct lending of
$100 million. Currently the bill language included a $100
million cap for the proposed Oil and Gas Infrastructure
Fund. The new fund would be able to loan up to 50 percent
of the project, not to exceed $100 million without specific
approval from the legislature.
3:31:11 PM
Representative Guttenberg asked about the perspective the
board would take relating to diversification versus putting
much of a fund into one project.
Mr. Therriault answered that if the fund was not
capitalized, and a project came forward at the $100 million
level, the board could evaluate the possibility of going to
the bond market to fund the project. If the concept cleared
a due diligence process, the board would do the bonding and
make the loan. He thought the scenario could be a way in
which the fund initially got rolling. Although it would be
a loan that would use up the total available cash, it would
set the authority up to make loans in the future absent a
general fund appropriation, which seemed unlikely.
Representative Guttenberg thought the amendment was an
interesting concept.
Co-Chair Neuman asked why the original cap had been set at
$20 million.
Mr. Therriault answered that the $20 million adjusted up to
$25 million was on a loan guarantee, and the amendment
would not change it. The amendment only applied to direct
lending, and would replace the $100 million cap, beyond
which the authority would require direct legislative
approval. In setting up the SETS Fund and Arctic
Infrastructure Fund, the legislature had established a $25
million cap on a loan guarantee. AIDEA could go beyond the
amount, but legislative approval would be required.
Co-Chair Neuman asked about a hypothetical project for a
port in Northwestern Alaska for arctic infrastructure
development. He asked if the scenario was the type of
project under consideration.
Mr. Therriault answered that an arctic port was something
that would fit under the Arctic Infrastructure Fund, and
the fund (established by the legislature) had no upper hard
dollar limit on a direct loan. He continued that the
amendment would place the $100 million limit (so
potentially AIDEA could loan 50 percent of a $200 million
project), beyond which would require specific legislative
approval.
3:35:08 PM
Representative Kawasaki asked about making loans beyond the
50 percent limit, and wondered about risk exposure to AIDEA
from having empty authority.
Mr. Therriault answered that the legislation allowed AIDEA
to set the mechanism up so that interested parties could
see the rules. If an entity wanted to come to AIDEA with a
large project, it would have to come to the legislature to
gain approval; at which time AIDEA could request
capitalization of the fund.
Representative Kawasaki stated that the last time the
legislature had worked on the issue (and the SETS Fund in
particular) was related to the Interior Energy Project for
which there had been special legislation. He was concerned
that AIDEA would enter into a loan for up to $100 million
but would not be required come before the legislature for
approval.
Mr. Therriault answered that if AIDEA had the ability to go
out and bond to capitalize the fund, it would be able to go
up to the limit of $100 million. Alternatively, sometime in
the future the legislature may have money to capitalize the
fund. He reiterated that the amendment established the hard
dollar upper limit for direct loans, beyond which would
require legislative authority before the loan was made.
Representative Kawasaki stated that AIDEA currently had a
bonding capacity cap set in statute. He wondered if the
authority was currently meeting the cap. He thought it
might be a rolling annual cap.
Mr. Therriault answered that the cap was $400 million on a
rolling 12-month basis. He did not think AIDEA was anywhere
close to the cap.
3:37:59 PM
Vice-Chair Saddler explained that the amendment did not
affect the loan guarantees, but only direct loans. He
emphasized that currently there was no hard dollar limit,
so a direct loan could loan up to 50 percent of a capital
cost of a project. The amendment proposed to put a $100
million limit on direct loans, which was drawn from the
limit on the Oil and Gas Infrastructure Fund. The limit was
set deliberately at a high level such that AIDEA had
discretion and lending parameters and evaluations. The
amendment was to try and impose the same sideboard. He
clarified that there was no place in which the amendment
proposed to change anything from $25 million to $100
million. He stated that the goal was to make sure that if
there was a large project AIDEA would like to finance
outside of the $100 million (or 50 percent) parameter, it
would come back to the legislature for approval.
Representative Kawasaki appreciated putting some sort of a
hard cap on the direct loan amount. He thought the
legislature should be involved in the approval process when
it came to such a large amount of money. He did not know if
$100 million was the right number.
Co-Chair Thompson noted that it did put a limit on the
amount, which was not currently in statute.
Representative Guttenberg asked who did the due diligence
when AIDEA loaned money.
FRED PARADY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT, answered that there
was a slide that outlined AIDEA's detailed due-diligence
process. He noted that the process was conducted by staff
with technical assistance contracted as necessary.
Representative Edgmon spoke to the intent of the bill as
shown on slide 6, which was to support small and medium
sized oil and gas developers statewide. He thought the $100
million cap might stymie the goal of the bill if a company
needed $150 million. He wondered if parts of the bill might
be taking some board's flexibility to work with a medium-
sized developer.
Mr. Parady noted that the structure of the bill began as a
30 percent limit that was raised to 50 percent, and was now
accompanied by a hard dollar cap. Considering the 50
percent cap, it was a $200 million project in aggregate,
which constituted a substantial amount. He reminded the
committee that AIDEA had the ability to come back to the
legislature if the need of the project was greater than the
limit. He thought the level of financing appeared to be in
the ballpark, but it was the first time a cap was being
established.
Representative Edgmon surmised that AIDEA was in agreement
with the proposed limit and it would not necessarily
restrict or hinder the authority's ability to deal with a
medium-sized gas developer.
3:43:36 PM
Mr. Parady replied in the affirmative.
Co-Chair Neuman believed $100 million seemed like a
significant amount of money. He reminded that AIDEA was a
subsidiary of the state, and the state had to back up the
authority's loans. He wanted to know why he should feel
comfortable with the $100 million amount given the state's
fiscal situation.
Mr. Parady answered that AIDEA's lending was not an
obligation to the state; as it was a set up as a distinct
corporate enterprise. The credit of the state was not
extended through AIDEA. Additionally, the $25 million limit
was the limit of AIDEA's ability to guarantee loans. The
$100 million or 50 percent limit was for direct loans, and
when financing such in the market, it had to stand on the
merits of the project.
Co-Chair Neuman asked if AIDEA currently had anything in
its portfolio that was upwards of $100 million.
Mr. Parady recalled that the Red Dog Mine Project was the
major project in the realm of the $100 million limit, and
could not think of another single project in the AIDEA
portfolio that approached the same dimensions.
Co-Chair Neuman asked if there had been any requests for
loans of that amount.
Mr. Therriault recalled discussion from an earlier
committee in which Mr. Springsteen had indicated that he
had been approached by oil and gas companies. The way AIDEA
was structured, it was not able to disclose details, much
like a private lender.
Representative Gattis stated that her bigger concern was a
"fish church." She wondered why the legislature was
inserting itself at the $100 million level if it did not
want the issue to be political.
3:48:23 PM
Mr. Parady replied that he would trust that when a $100
million project came through the authority's due diligence
process, that AIDEA would put its best food forward through
the criteria established in its evaluation process. He
commented that AIDEA was always subject to the power of
appropriation from the legislature.
Mr. Therriault stated that the due diligence process had
been strengthened after some missteps in the past. He added
that with the passage of HB 105 the previous year, there
were a number of legislative authorizations where AIDEA was
given the ability to enter into a loan that never
materialized.
Representative Gara asked if the rule was 50 percent of the
cost, and under the amendment would be 50 percent up to
$100 million.
Mr. Therriault replied in the affirmative.
Representative Gara thought that the provision would limit
AIDEA's involvement. He asked if by putting in the $100
million suggestion it somehow encouraged AIDEA to get
involved with projects that were larger than they otherwise
would have.
Mr. Therriault did not believe so. He stated that AIDEA
only wanted to loan out the amount of money that a project
could justify. He did not think the ($100 million) dollar
amount would drag the number up.
Vice-Chair Saddler understood the concerns about the risk
of raising the amount of money AIDEA could make loans on.
He thought it had been established that the provision was
actually lessening and limiting the amount of loans. He
reiterated that the $100 million limit being considered had
nothing to do with the limit for the proposed Oil and Gas
Infrastructure Fund.
Co-Chair Neuman WITHDREW his OBJECTION to Amendment 2.
There being NO further OBJECTION, Amendment 2 was ADOPTED
as AMENDED.
3:52:13 PM
Representative Wilson MOVED to ADOPT Amendment 3 [29-
GH2613\W.2 (Shutts, 6/6/16):
Page 8, line 16:
Delete "(1)"
Page 8, lines 18 - 21:
Delete "; and
(2) after the date of the authority's financing
commitment, the participants will not take, apply for,
or accept a tax credit for expenditures on the oil and
gas field under AS 43.20.043, AS 43.55.023, or
43.55.025"
Co-Chair Thompson OBJECTED for discussion.
Representative Wilson explained that Amendment 3 would take
out tax credits from being part of the bill. She understood
that AIDEA was already making loans. She was concerned that
since the state was currently in a position of not being
able to pay tax credits as soon as it was able to in the
past, she did not want anyone to think that AIDEA's lending
would be in exchange for paying what the state owed. She
wanted to make sure that the companies would not have to
give up what they had earned.
Co-Chair Thompson used a loan on a warehouse on an oil
field as an example. He thought the amendment would allow
companies to not only borrow funds from AIDEA for the
warehouse, but it would also enable companies to get a tax
credit on the spending. He wondered if it was double
dipping.
Mr. Therriault answered that Amendment 1 did shrink the
prohibition (that Amendment 3 would remove completely) so
that a company would not be able to apply for the tax
credit just on the infrastructure that AIDEA loaned money
on. If Amendment 3 passed, a company would be able to apply
in the future for tax credits. If a company had borrowed
money from AIDEA and built surface infrastructure, it would
also be able to apply for a credit on the loaned amount.
Vice-Chair Saddler asked for clarification that the
amendment would not relieve the person investing from the
necessity of repaying a loan to AIDEA; so the state would
still be made whole (plus interest) if it gave a loan to
build a warehouse, and the tax credit would be in addition
to that.
Representative Wilson answered in the affirmative.
Currently if a company went to a bank, it was able to
utilize the tax credits and take them as a down payment to
lower the amount of the loan. Her concern was that she did
not want it to appear that the state was looking at a
different way to offer tax credits.
3:55:46 PM
Vice-Chair Saddler surmised that without the amendment it
would make it less likely that a company would make a
capital investment to help its business operate. With the
amendment, it would allow a company to make an investment,
get the credit, and then allow the state to get repaid.
Additionally, there would be more investment to produce
more oil. He expressed support for Amendment 3.
Co-Chair Neuman did not see the amendment in the same way.
He discussed the idea that a company could get a loan from
AIDEA, start a project, apply and get credits from the
state, and then use the credits to pay the loan.
Representative Wilson answered in the affirmative, and
stated that under the proposed amendment, the practice
would constitute the same process as if the company was
using a regular bank.
Co-Chair Neuman believed the amendment constituted double
dipping. He thought the amendment was in contradiction to
Amendment 1, which the committee had passed. He pointed out
that AIDEA had different investment strategies than banks
did, and more opportunities to offer companies. He was
concerned the state would be paying its own loans back with
the state's own credits. He was not sure that it was the
intent of the bill.
Co-Chair Thompson spoke to his concern about the amendment.
He asked if a company borrowed $30 million to do a specific
item on its project, and once the project was completed, in
the credit against the $30 million in expenditures and
received credits from the state. He wondered if the company
would have extra cash and then not have to pay the loan.
Representative Wilson answered that a company could pay
part of the loan back if it chose, or reinvest and do more
things in the fields it was working in. She reiterated that
the scenario was the same practice companies were currently
doing with banks, and were able to utilize the credit
certificates as a down payment. The company would still owe
interest and repay any remaining amount.
Co-Chair Thompson considered that the scenario was similar
to how Bank of America and ING Bank handled business in
Cook Inlet, while charging 20 percent interest because of
lack of surety that the state would pay for the credits
owed. If the amendment passed, AIDEA would be operating as
the banks did and the credits could be used to pay back
AIDEA. He wondered if he was accurate in his assessment.
Representative Wilson answered affirmatively, and claimed
that without the credit certificates, the banking
institutions would have been charging closer to 30 to 40
percent interest. If companies were able to meet all of
AIDEA's requirements, the transactions would occur just as
they did in private industry, perhaps with a lower interest
rate.
4:00:29 PM
Representative Gara asked about "the authorities financing
commitment" in the amendment. He wondered if there would
sometimes be direct financing that counted on AIDEA's
books.
Mr. Therriault responded that AIDEA's commitment was when
the actual loan was put in place.
Representative Gara asked if the loans would be obligating
AIDEA's assets.
Mr. Therriault stated that the loans would be obligating
AIDEA either as a direct lender or a guarantor.
4:01:47 PM
Representative Gara commented that AIDEA only had a certain
amount of loan capacity, and it was part of what was left
of the economic engine of the state. He thought there were
a lot of good projects and businesses in the state for
AIDEA to help with. He suggested that if the state started
placing AIDEA money into businesses that were already
receiving tax credits, and already benefitting from state
money, it would result in less money going to other
companies that might do well for the economy and did not
receive tax credits. He thought the bill was fine as
written. He expressed concerns about double dipping. He
wanted to encourage other businesses. He would be opposing
the amendment.
Representative Guttenberg discussed the amendment, and
suggested that companies could get a loan and a tax credit,
and make a profit by selling what they had built with the
loan. He agreed that the amendment would enable double
dipping.
Mr. Therriault thought the scenario laid out by
Representative Guttenberg was possible in a market where
the value of the assets was rising.
Co-Chair Thompson asked if the scenario was any different
than any other loan.
Mr. Therriault answered that as long as the loan was paid
back, the scenario was the same as other loans.
Co-Chair Thompson asked how to apply the scenario to a
project under the amendment. He asked if it represented
good policy.
Mr. Parady answered that the language of the original bill
was intended to narrow a company's ability to either use
the loan mechanism or apply for a tax credit. The bill was
designed to prevent the ability to do both. After
deliberations in the committee, Amendment 1 had been
adopted and thereby restricted the limitation to only those
things that AIDEA financed. Thereby a company would be free
to pursue exploration tax credits or other tax credits that
were on dollars outside of the AIDEA financing commitment.
There was nothing that precluded a company from the oil and
gas tax credit application; it was a choice of whether to
choose one mechanism or another. He commented that it was
merely timing that raised the question that Representative
Wilson brought up about tax credits.
4:06:16 PM
Vice-Chair Saddler believed the scenario envisioned by the
amendment would create new wealth. He thought if a loan was
made to a company, and the company was able to sell an
asset that it created with the loan at a profit, it would
create new wealth in the state. He mentioned the Red Dog
Mine project, and wondered if Red Dog sold off a portion of
all its operations at a profit to a company that kept
operating in Alaska, would it be contrary to AIDEA's
mission or detrimental to Alaska's economy.
Mr. Parady answered in the negative, as long as the loans
were repaid.
Vice-Chair Saddler asked if there was any provision in
AIDEA's loan agreements that blocked the divestiture of any
or all of the assets obtained or improved with an AIDEA
loan.
Mr. Parady understood that subject to the collateralization
and security of the loans, he was not aware of such a
provision.
Vice-Chair Saddler asked if AIDEA was satisfied as long as
a company made interest payments and met the conditions of
the loan.
Mr. Parady answered in the affirmative.
Representative Edgmon asked if the amendment was necessary.
Mr. Therriault answered that the amendment constituted a
policy call. He furthered that AIDEA would utilize the
proposed tool to its best ability no matter what provisions
were put into it.
Mr. Parady answered that the bill had been drafted with a
restriction so that AIDEA would not have to deal with the
two topics interfering or interacting with each other. His
preference as a board member would be some semblance of the
language as originally presented, as amended by Amendment
1.
Co-Chair Neuman understood that the intent of the original
bill was to either get the credits or to get loans, but not
both.
Representative Wilson provided wrap-up on the amendment.
She described the scenario of a small company utilizing tax
credits and a bank loan. She discussed the state's
difficulty in paying tax credits in a challenging fiscal
climate. She asserted that Amendment 3 would not change
anything in the private market. The reason she brought the
amendment forward was that it appeared that AIDEA would be
able to offer something that would be better than on the
open market, because the state was no longer necessarily
able to pay all the tax credits when they were submitted
and due. She thought it was wrong that the state was unable
to pay the tax credits. She observed that AIDEA was making
loans to entities that she assumed could still get tax
credits based on due diligence.
4:11:06 PM
Co-Chair Neuman commented that the amendment did not
conform the intent of the original bill.
Representative Wilson responded. She thought it appeared as
if the loan program was offered as an alternative since the
state was unable to pay for tax credits.
Co-Chair Thompson MAINTAINED his OBJECTION.
A roll call vote was taken on the motion to ADOPT Amendment
3.
IN FAVOR: Saddler, Wilson
OPPOSED: Pruitt, Edgmon, Gara, Guttenberg, Kawasaki,
Neuman, Thompson
Representative Gattis and Representative Munoz were absent
from the vote.
The MOTION FAILED (2/7).
Vice-Chair Saddler addressed the fiscal note from the
Department of Commerce, Community and Economic Development.
Representative Gara asked for verification that the fiscal
note was zero.
Co-Chair Thompson agreed.
Co-Chair Neuman MOVED to REPORT CSHB 246(FIN) out of
committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
CSHB 246(FIN) was REPORTED out of committee with a "do
pass" recommendation and with a new zero fiscal note from
the Department of Commerce, Community and Economic
Development.
Co-Chair Thompson addressed the agenda for the following
day. He recessed the meeting to a call of the chair [Note:
the meeting never reconvened].
^RECESSED TO A CALL OF THE CHAIR
4:15:59 PM
ADJOURNMENT
4:16:06 PM
The meeting was adjourned at 4:16 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 246 Amendments 1-2.pdf |
HFIN 6/15/2016 3:00:00 PM |
HB 246 |
| HB 246 Amendment 3.pdf |
HFIN 6/15/2016 3:00:00 PM |
HB 246 |
| HB 246 Amendment NEW No 2.pdf |
HFIN 6/15/2016 3:00:00 PM |
HB 246 |