Legislature(2015 - 2016)BILL RAY CENTER 208
06/03/2016 03:00 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB246 | |
| 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 3, 2016
3:07 p.m.
3:07:23 PM
CALL TO ORDER
Co-Chair Thompson called the House Finance Committee
meeting to order at 3:07 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
Fred Parady, Deputy Commissioner, Department of Commerce,
Community, and Economic Development; Gene Therriault,
Deputy Director, Statewide Energy Policy Development,
Alaska Energy Authority, Department of Commerce, Community
and Economic Development; Representative Liz Vasquez;
Representative Sam Kito III; Representative Lora Reinbold;
Representative Mike Chenault.
PRESENT VIA TELECONFERENCE
John Springsteen, Executive Director, Alaska Industrial
Development and Export Authority (AIDEA).
SUMMARY
HB 246 AIDEA: FUNDS; LOANS; PROGRAMS; DIVIDEND
HB 246 was HEARD and HELD in committee for
further consideration.
Co-Chair Thompson reviewed the agenda for the meeting. He
introduced the presenters. He asked members to hold
questions until the end of the meeting.
Representative Guttenberg asked the presenters to point out
places in which the committee substitute for the bill
differed from the original version.
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.'"
3:09:00 PM
FRED PARADY, DEPUTY COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY, AND ECONOMIC DEVELOPMENT, introduced himself. He
relayed he would be briefly reviewing the slides in his
presentation. He stated that the bill was brought forward
on behalf of the 735,000 shareholders of the Alaska
Industrial Development and Export Authority (AIDEA).
GENE THERRIAULT, DEPUTY DIRECTOR, STATEWIDE ENERGY POLICY
DEVELOPMENT, ALASKA ENERGY AUTHORITY, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, introduced
himself.
3:10:04 PM
AT EASE
3:10:24 PM
RECONVENED
Mr. Parady introduced the PowerPoint presentation: "AIDEA
Oil and Gas Infrastructure Development Fund HB 246" (copy
on file). He turned to slide 2: "Current AIDEA Financing
Tools." He pointed out the AIDEA board members listed at
the top of the slide, which included himself as the
designee of the Department of Commerce, Community and
Economic Development. He continued that Deputy Commissioner
Jerry Burnett sat on the board as the designee of the
commissioner of Department of Revenue (DOR). He specified
that AIDEA staff reported to the board. He listed the funds
on the slide: The Revolving Fund, the Sustainable Energy
Transmission Supply (SETS) Fund (for energy
infrastructure), and the Arctic Infrastructure Fund. He
also listed two special appropriations projects to include
the Interior Energy Project and the Ambler Mining District.
Mr. Parady moved to slide 3: "Geographic Project
Diversity." The slide was part of the "dashboard" for
monthly and quarterly review that showed where AIDEA's
money was deployed. The slide showed a geographic
representation via a pie chart and state map that was
divided into regions. He commented that AIDEA's mission was
to serve the entire state.
Mr. Parady moved to slide 4, "Industry Diversification,"
which showed a pie chart entitled 'Total Existing and
Approved Capacity Projects and Loans as of 10/31/15.' He
indicated that the slide presented the problem that AIDEA
was trying to solve. He specifically pointed out the
portions of the pie chart that were 'Oil and Gas' and 'Oil
and Gas Support,' which represented 14 percent of AIDEA's
loan portfolio. He highlighted that mining was another
large component of the portfolio, and comprised 20 percent
of the pie chart. The Red Dog Mine project was a stable 20
to 30 year loan. He shared AIDEA's concern that with the
oil and gas sector at 14 percent, the state was in danger
of over-weighting AIDEA's portfolio in the capital-
intensive industry and was therefore seeking to build a new
tool. He specified that the tool was represented in the
next slide.
Mr. Parady advanced slide 5, "Financing Tools after HB
246." He conveyed that the new tool he had referred to was
represented by the orange bar on the slide, which was a
proposal to add a fourth fund dedicated to oil and gas
infrastructure.
Mr. Parady moved to slide 6: "Intent of HB 246":
Continue infrastructure financing to:
•Support small and medium sized oil and gas developers
statewide
•Increase production and bring new fields online
•Attract new investment
•Increase future State oil and gas revenues
•Support investment for energy security
3:13:14 PM
Mr. Parady discussed slide 7: "Eligible Oil and Gas
Infrastructure Projects":
•Oil & Gas Development Infrastructure defined as:
-Investment: acquisition, construction or
installation (including engineering)
-Projects: road, pad, camp, processing facility,
gathering system or other-site improvement or
equipment
•Projects must support fields with proven reserves
•Proven Reserves defined as:
-Analysis of geological and engineering data
-Commercially recoverable under current economic
conditions, operating methods, and government
regulations
-Can be categorized as developed or undeveloped
Mr. Parady emphasized that the fund was precluded from
investing downhole.
Mr. Parady turned to slide 8: "Financing and Tax Credits":
•After opting to use AIDEA financing, projects may no
longer use:
-Exploration & Development tax credit (AS
43.20.043)
-Production tax credit (AS 43.55.023)
-Production tax credit for exploration
expenditures (AS 43.55.025)
•Projects with past tax credits still eligible for
AIDEA financing
Mr. Parady reviewed slide 9: "Market Based Interest Rates":
•AIDEA will base interest rates on:
-Project risk
-Borrower creditworthiness
-Owner and financing partner commitments
-Benefit to the State
•Interest rates may be higher for oil and gas
infrastructure projects due to the inherent industry
risk
Mr. Parady turned to slide 10: "Other Bill Components":
Modifies financing limits of SETS and Arctic
Infrastructure development funds
•Proposes that all 3 funds be allowed to loan up
to 50 percent of an eligible project or offer a
loan guarantee up to $25,000,000
•Amounts in excess of these limits would require
prior legislative approval
Mr. Parady added that current statute dictated that the two
other AIDEA funds could loan up to 33 percent of a project
up to $20 million. He expressed that the change was due to
the scale oil and gas infrastructure projects and the need
for consistency. He relayed that Mr. Therriault would
address additional sideboards that were added to the bill
in the House Resources Committee.
3:15:39 PM
Co-Chair Thompson acknowledged that Representative Reinbold
was in the audience.
Mr. Therriault turned to slide 11: "Sectional Analysis." He
indicated that there were two documents in the member
packets, including an explanation of changes. The
explanation of changes document would highlight that
Sections 1 through 11 of the committee substitute either
had no change or merely had stylistic drafting changes. He
indicated that he would highlight different amendments that
were adopted in the House Resources Committee bill version,
which all applied to Section 12 of the bill. He reviewed
the sectional analysis for version W:
Sections 1 through 3: Sections 1 through 3 amend the
language of AS 44.88.088, to include payment of a
dividend from the proposed new oil and gas
infrastructure development fund.
Sections 4 through 9: Sections 4 through 9 amend
subparts of AS 44.88.159, which governs the interest
rates AIDEA charges under its loan participation
program and its SETS and Arctic infrastructure
Development programs. These sections of the bill use
many of the same interest rate provisions applicable
to any loans provided through the SETS and the Arctic
infrastructure program and fund. In essence, the
interest rate provisions require a minimum interest
rate that ensures AIDEA does not lose money on its
loans, and the interest rates AIDEA uses in these
programs are more or less in line with the rates
commercial lenders offer. Sec. 9 adds a new section
(h) to AS 44.888.159, so that the authority may by
regulation establish differing interest rates, as well
as for methods for setting interest rates, based on
the risk of the financing and the security provided.
Section 10: Section 10 amends AS 44.88.690(a) to
increase the loan limit from one-third to 50% of the
capital cost of a qualified energy development and
increases the limit of a loan guarantee to $25 million
under the sustainable energy transmission and supply
(SETS) fund.
Section 11: Section 11 amends AS 44.88.840(a) to
increase the loan limit to 50% of the capital cost of
an Arctic infrastructure development and increases the
limit of a loan guarantee to $25 million under the
Arctic infrastructure development fund.
Section 12: Section 12 is the heart of the bill, and
it adds a new chapter to AIDEA's statutes to create
the oil and gas infrastructure development program and
separate fund. The new statutory provisions the bill
adds do the following:
AS 44.88.850 creates the oil and gas
infrastructure development program within AIDEA.
AS 44.88.860 creates the oil and gas
infrastructure development fund within AIDEA
separated from Authority's existing Revolving
Fund. The new fund will consist of money the
legislature appropriates to it and investment
returns obtained from financing activity provided
by the fund. AIDEA is authorized to pledge the
fund to the payment of bonds issued to finance
oil and gas infrastructure development.
AS 44.88.870 authorizes AIDEA to use the money in
the oil and gas infrastructure development fund
to finance oil and gas infrastructure
development.
AS 44.88.880 specifies AIDEA's powers and duties
with respect to the oil and gas infrastructure
development program and fund, and requires AIDEA
to adopt regulations to implement the new
program. These regulations must contain a process
sufficient to confirm the existence of proven
reserves sufficient to justify proposed project
financing. AIDEA is also authorized to contract
for legal, bond counsel, engineering, or other
expertise necessary to fulfill the purpose of the
program and protect the authority.
AS 44.88.890 establishes limitations on the
financing AIDEA can provide through the oil and
gas infrastructure development program and fund.
Without getting legislative approval, AIDEA
cannot make a loan through the oil and gas
infrastructure development fund for more than the
lesser or one-half of the capital cost of an oil
and gas infrastructure project or $100,000,000.
Without prior legislative approval AIDEA may not
issue a loan guarantee through the new program
for more than $25 million.
AIDEA may not utilize this new oil and gas
financing program unless all participants in the
proposed development agree they will not take,
apply for, or accept any exploration and
development tax credit under AS 43.20.043;
production tax credit under AS 43.55.023 or
production tax credit for exploration
expenditures under AS 43.55.025.
Individual project financing under the proposed
Oil and Gas Infrastructure Development Program
must not exceed a loan to value ration of
seventy-five percent. Resource reserves that may
be offered as part of the collateralization for a
project loan must be valued conservatively.
AIDEA must be properly shielded from any
potential dismantlement, removal and restoration
obligations that may stem from the infrastructure
development project before financing from the
proposed Oil and Gas Infrastructure Development
Program can be provided.
Finally, any financing under the new program must
be for the expected life of the project, but not
for more than 30 years.
Section 13: This section sets out the definition of
the terms "oil and gas infrastructure development" and
"proven reserves".
It amends AS 44.88.900 by adding a new Paragraph (20)
that defines the term "oil and gas infrastructure
development" to mean "the acquisition, construction,
or installation of and engineering for the
construction or installation of a road, pad, camp,
processing facility, gathering system, or other on-
site improvement or equipment for an oil or gas field,
or an oil and gas field, located in the state that has
been explored and for which proven reserves have been
established;
In addition it amends AS 44.88.900 by adding a new
Paragraph (21) that the defines "proven reserves" to
mean "those quantities of petroleum which, by analysis
of geological and engineering data, can be estimated
with reasonable certainty to be commercially
recoverable, from a given date forward, from known
reservoirs and under current economic conditions,
operating methods, and government regulations; "proven
reserves" can be categorized as developed or
undeveloped."
3:21:18 PM
Representative Gattis asked about what other funds would be
included.
Mr. Therriault replied that there could be a variety of
actions taken with the new mechanism in Section 12. He
continued that it would allow for AIDEA to engage in
revenue boding to go into the fund and then loan to a
project. He qualified that even if the fund was not
initially capitalized, its existence was valuable.
Mr. Therriault continued to discuss Section 12. He
recounted that when the legislature created the SETS Fund
and the Arctic Infrastructure Fund, which were both
initiatives that came from the legislature; there was a
viewpoint that funds created for AIDEA had to have certain
components. As AIDEA moved forward to create the new Oil
and Gas Infrastructure Fund, it copied the blueprint that
had been established. He referred to page 7, lines 21
through 23 of the bill, which contained the second
amendment adopted by the House Resources Committee. The
lines clarified that AIDEA had the same authority for the
new fund that it did under the SETS Fund and the Arctic
Infrastructure Fund to hire outside expertise such as legal
counsel, bond counsel to ensure appropriate use of the
fund. He stated that previously there had been a separate
line in the bill that required approval of the attorney
general in order to get bond counsel and outside legal
counsel.
3:24:01 PM
Mr. Therriault directed attention to page 8 of the bill,
which addressed more of Section 12 and pertained to
limitations on financing. He discussed line 8, and the
boundaries on financing below the need for legislative
approval; and pointed out that line 10 set an upper hard
dollar amount at $100 million for AIDEA participation. If
the authority wanted to go beyond the $100 million amount,
even if it was under the 50 percent participation limit; it
would have to gain specific legislative approval. He
confirmed that the change was a result of Amendment 3
adopted by the House Resources Committee.
Mr. Therriault moved on to page 8, line 13 of the bill. He
read from the document "Explanation of Changes," (copy on
file):
Sec 12: H/Res amendment #1 modified the language of
Sec. 44.88.860 to restrict the ability of the AIDEA
Board to move funds to the proposed Oil and Gas
Infrastructure Development fund from other AIDEA
sources.
H/Res amendment #2 modified the language in Sec.
44.88.880 to clarify that AIDEA is authorized to hire
outside legal, bond counsel, engineer, or other
technical expertise necessary to fulfill the purpose
of the program and protect the interest of the
authority.
H/Res amendment #3 modified the language of Sec.
44.88.890 to include a limit of $100,000,000 on AIDEA
participation in individual oil and gas infrastructure
development financing without first receiving
legislative approval.
H/Res amendment #4 added specific language to Sec.
44.88.890 requiring that AIDEA be protected from any
potential future dismantlement, removal and
restoration obligations associated with the proposed
development project before financing from the proposed
oil and gas infrastructure development fund is
allowed.
H/Res amendment #5 also added language to Sec.
44.88.890 requiring that financing from the proposed
oil and gas infrastructure development program must
not exceed a loan to value ratio of seventy-five
percent. This language will require loans from the
program to be over-collateralized to protect the
authority against a default. The amendment also
requires the calculation of value for resource
reserves that may be pledged as part of the loan
collateral to be computed conservatively
Sec 13: Drafting style changes only
Mr. Therriault relayed that Representative Seaton had
wanted specific language added to the limitations to
iterate that until AIDEA was indemnified for future
responsibility, loans could not be issued.
3:26:57 PM
Mr. Therriault discussed line 24 on page 8 of the bill. He
discussed specific language regarding the loan-to-value
ratio that could not be exceeded in the lending. He
directed attention to line 25 on page 8, which indicated
the loan-to-value ratio at no time could exceed 75 percent.
The language signified that in doing the lending, there
could be no security pledged for the amount being lent. If
the project loan was $75 million, AIDEA would have to
exceed the amount in collateral - a conservative amount to
ensure protection in the case of default.
Mr. Therriault addressed lines 27 through 29 on page 8,
which discussed oil and gas reserves being used as
collateral, and required the calculation of such collateral
to be computed conservatively. He used the example of
looking at the previous 12 months of the resource price and
comparing with an estimation of the price for the next 12
months to take the lesser of the two. He commented on the
specific nature of the language, which corresponded to
Amendment 5 adopted by the House Resources Committee.
Mr. Therriault discussed Section 13 of the bill, where
there was style changes and slight changes in the intent of
the bill. He continued that the section was the definition
section for oil and gas infrastructure development, which
included definition of the types of projects AIDEA could
use the fund to lend for. Additionally, there was a
definition of 'proven reserves.'
Mr. Parady went back to the slide presentation and turned
to slide 12: "AIDEA Due Diligence":
Established analysis and decision making process
•Technical due diligence
-AIDEA sets procedure for verifying proven
reserves
•Financial due diligence
-Review developer creditworthiness and
financing partner commitments
-Analysis of economics, including oil price
stress tests
•Analysis of benefit to State
-Jobs created and petroleum revenues created
•Managed by AIDEA staff with hired
consultants/specialists
•AIDEA Board makes final investment decision
Mr. Parady turned to the graph on slide 13: "Analysis &
Decision-Making." The slide showed a flow chart titled
'Established analysis and decision making process.' He
highlighted the four headings on the table: Phase 1 -
Suitability Assessment, Phase 2 - Feasibility Analysis,
Phase 3 - Deal Structuring and Due Diligence, and Phase 4 -
Finalization and Close. He continued that there was
substantial detail listed below each phase for the
committee's review.
Mr. Parady advanced to slide 14: "Financing Repayment":
•AIDEA financing at market-based rates to reflect
individual project risk
•Loans repaid with interest
•AIDEA will earn revenue
-Some earnings to the State as a dividend
-Some earnings to fund future projects
Mr. Parady explained that there was a graphic at the bottom
of slide 13 that showed that once the legislature
established the Oil and Gas Infrastructure Development
Fund, AIDEA would look to finance appropriate oil and gas
projects. Further, project revenues would return revenues
to repay AIDEA, and in turn AIDEA would pay a dividend to
the state. He characterized the process as "a virtuous
circle."
3:30:06 PM
Mr. Parady turned to slide 15: "AIDEA Entry Point &
Criteria." He conveyed that the slide was a key slide to
illustrate the cost of capital, correlated to the level of
risk (from low to high); with the x-axis of the graph
showing the range of project stages. He qualified that
AIDEA tried to center its activities in the "sweet spot" in
the center of the graph; where there was operating
experience on behalf of the project proposers, a capital
contribution from other entities that contributed to the
project, a final design with plans and specifications,
permitting processes were complete, and signed purchase
agreements and signed sales agreements.
Mr. Parady continued discussing the graph on slide 15,
noting that AIDEA's preferred role was not in venture
capital, seed capital, or private equity; but rather right
in the middle of getting things done. He asked the
committee to consider the project experience of the state,
and noted that no entity in AIDEA's line of business would
have an unblemished record, but AIDEA's overall portfolio
had provided consistently strong returns to the state.
Mr. Parady furthered that AIDEA had repaid the capital that
was invested by the state originally; and its loan
portfolio included projects known to all the members,
including the Red Dog Road, the larger ship plant in
Ketchikan, the oil transfer site in Skagway, the FedEx
Hangar at the Anchorage airport, and a host of smaller-
scale retail businesses. He referred back to slide 4; and
the pie chart which illustrated industry diversification
through projects in restaurants, recreation, tourism,
vessels, warehouses, offices, wastewater plants,
healthcare, fuel distribution, and car washes. He asserted
that AIDEA was supporting a niche in the Alaska economy in
helping to provide liquidity and enable people to generate
jobs and economic activity across the state.
Mr. Parady scrolled to slide 16: "Summary":
•Provides AIDEA a specific program to finance oil and
gas infrastructure
•Eligible oil and gas infrastructure must have proven
reserves and undergo established due diligence review
•Finance terms will be market based
Mr. Parady reviewed slide 17: "Implementation Cost":
•Implementing the program will involve minor
modification of regulations, which will be carried out
in-house
•Program implement cost will be absorbed
•Program management cost will be absorbed
•Modified fiscal note submitted to acknowledge
potential fund capitalization
Mr. Parady believed that there was a zero fiscal note
because the appropriations bill had already moved past the
point where it might have been possible to add capital to
the project. He recognized that it was always unlikely for
the project to receive capital due to the current
challenging fiscal climate. He continued that AIDEA still
believed that the financing structure of the proposed
program would add another element to AIDEA's toolkit and
enable it to better support small and medium-sized
operators across the state.
3:33:31 PM
Co-Chair Thompson referred to Amendment 4, which pertained
to reclamation and dismantling that AIDEA would not be
responsible for. He wondered about any eventualities in
which AIDEA would have to take on responsibilities of
dismantling and reclamation.
Mr. Therriault believed the bill language would require
that AIDEA would be indemnified from any of the
responsibility, even in the case of a default.
Co-Chair Thompson asked if there was a possibility of state
liability in the event of loan default.
Mr. Parady believed that the indemnification to protect the
state would still be in place and was separate from the
project title and default.
Co-Chair Thompson asked who would dismantle and reclaim if
the company in question was in default.
Mr. Parady understood that responsibility would fall to
either the insurance carrier or the indemnification
mechanism that was created to secure AIDEA from the
liability.
Co-Chair Thompson asked if the AIDEA process would require
insurance to cover the possibility of default.
Mr. Parady responded in the affirmative, and deferred
further comment to the executive director of AIDEA.
3:35:27 PM
JOHN SPRINGSTEEN, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), responded that
the mechanisms were as previously stated, to include
insurance or some form of bonding mechanism to make sure
than any dismantlement or remediation was taken care of at
the time contracts were drawn.
Co-Chair Thompson felt reassured by the information.
Vice-Chair Saddler asked if any other states offered the
oil and gas industry the same kind of public loan
opportunity that AIDEA was proposing.
Mr. Springsteen was unsure if other states offered a
similar type of loan program. He knew there were tax
credits offered in other states, as well as a continual
effort to find other financing mechanisms to work alongside
with industry. He furthered that there were other
jurisdictions around the world that made direct investments
in oil and gas development, and went further towards equity
and ownership positions with state-owned oil companies. He
qualified that in contrast, the bill had a narrow focus on
top-side infrastructure to support oil and gas development.
Vice-Chair Saddler asked if Mr. Springsteen had indicated
that other states did not engage in such loans, but did
take equity positions in oil and gas projects.
Mr. Springsteen responded that the model he was referring
to was regarding foreign-owned oil companies, rather than
an individual state model. He continued that Alaska was
unique in its ownership of below-ground assets. He compared
the state to being more like a foreign nation that worked
with oil companies rather than a state with federal land
managed through mechanisms of the federal government.
3:38:25 PM
Vice-Chair Saddler asked if Mr. Springsteen knew of other
states that offered such loans, or took equity positions in
oil and gas projects.
Mr. Springsteen answered in the negative, and offered to
contact Vice-Chair Saddler at a later time to confirm his
answer.
Vice-Chair Saddler referred to page 7, Line 10 of the bill;
and asked if the other loan programs administered by AIDEA
also had separate authority to hire separate bond counsel.
He thought it might be something that could be operated as
centralized function within AIDEA.
Mr. Springsteen replied that AIDEA utilized the Assistant
Attorney General Jerry Juday, who was key to ongoing
operations. He continued that AIDEA worked in coordination
with other parties.
Vice-Chair Saddler reiterated his question to ask if all
AIDEA lending programs had the same authority for bond
counsel.
Mr. Springsteen responded affirmatively.
Vice-Chair Saddler asked why there was separate authority
for each program rather than a centralized function.
Mr. Springsteen explained that AIDEA had worked with the
administration on provisions in the bill.
Vice-Chair Saddler reiterated his question as to why AIDEA
had separate authority for each program.
Mr. Springsteen stated that the bill moving forward was in
coordination with the administration.
Mr. Therriault responded that the separate authority was
due to how the statues were constructed; and each time a
new tool was given to AIDEA, rather than have the
legislature put together a centralized authority for hiring
outside counsel, it was mentioned specifically in each one
of the tools.
3:41:21 PM
Vice-Chair Saddler referred to the first two items in
Section 12 of the bill, and the discussion of changing the
loan limit from 30 percent to 50 percent. He wondered about
the original justification for a 30 percent cap on AIDEA's
loan participation, as well as the reason for raising the
cap to 50 percent.
Mr. Therriault referred to Sections 10 and 11 of the bill,
which made reference to the SETS Fund and the Arctic
Infrastructure Fund. He relayed that the legislature had
chosen to set the limits at one-third participation as well
as a $20 million loan guarantee. In creation of the new
fund being proposed in the bill, AIDEA recognized the cost
of infrastructure, and asked for a higher limit of up to 50
percent or a $25 million loan guarantee. He noted that
funding beyond the amounts stipulated in the bill would
require specific legislative approval.
Mr. Therriault continued, and relayed that AIDEA thought
that rather than having different limits for the three
different programs, it would be beneficial; however it was
a separate policy call as to whether to include Section 10
and Section 11, which adjust the other funds up to the same
level that was being proposed for the new fund.
Vice-Chair Saddler asked if the proposed higher limit would
lead to an increase in the number of loans AIDEA was able
to offer.
Mr. Therriault responded that the increased participation
level was beneficial for AIDEA's clientele if the loan
programs had consistency. Additionally, the possibility of
a higher loan amount gave the opportunity of considering
more projects. He acknowledged that if a project was above
a certain amount, AIDEA was able to request legislative
approval, however there was a certain amount of uncertainty
inherent in such a request. He added that a prospective
borrower might find pursuing a legislative request to be
onerous.
Co-Chair Thompson noted that Representative Kito was in
attendance.
Representative Guttenberg asked how interest rates for
AIDEA projects were established in the competitive market.
Mr. Parady deferred to Mr. Springsteen.
Mr. Springsteen relayed that AIDEA looked at market rates,
and rates were available to the borrower based on third-
party funding. When AIDEA made adjustments to the rate, it
considered the benefit provided to Alaskans; which could
include the provision of jobs, incremental taxes and
royalty revenue, or other potential social benefits
provided to Alaska shareholders. The basis was a market
rate, with consideration given for the developer and the
things it did for the state.
3:45:04 PM
Representative Gattis thanked Mr. Therriault for coming to
her office to answer some of her questions. She recounted
her question pertaining to how to avoid a boondoggle. She
had heard Mr. Parady suggest that the final decision on
projects rested with the board, and wondered if there was a
statute in place in order to prevent such an occurrence.
She mentioned a "fish church" as an example.
Co-Chair Thompson understood that the only projects that
had failed had been projects forced upon AIDEA by the
legislature.
Mr. Therriault expressed appreciation for the frank
conversation with Representative Gattis the previous day.
He recounted that AIDEA had been initially capitalized with
about $330 million; and had since paid all the money back,
plus another $50 million. He acknowledged that AIDEA had a
couple of stumbles over its life, but by in large the
authority was very solid. He continued that the state
reported data on lending institutions, including AIDEA. The
data from one year previously had reported that AIDEA had a
default rate of .47 percent. Since that time, based on a
12-month rolling average, AIDEA's delinquency rate had gone
down to .34 percent. He added that the all-Alaska banking
delinquency rate at the time was almost twice that of AIDEA
at .78 percent.
Mr. Therriault referred to slide 13, which reflected a due
diligence process discussed earlier by Mr. Parady. He
informed that the previous executive director had helped to
strengthen the due diligence process of AIDEA by learning
from mistakes as well as how to ensure that any lending was
to an entity with a solid business plan that was
financially able to pay back a loan. Additionally there
were sideboards added by the House Resources Committee;
which informed the authority that they had to over-
collateralize loans if they were going to use reserves as
part of collateral. He thought using conservative
calculations would help to protect AIDEA and make sure that
its overall track record remained positive.
3:48:40 PM
Representative Gattis thanked Mr. Therriault for his
remarks and commented on the work of the AIDEA board.
Representative Kawasaki asked for clarification about the
AIDEA projects initiated by the legislature. He mentioned a
municipal project in Valdez that was often attributed to
AIDEA.
Mr. Therriault confirmed that there had been no AIDEA
participation in the grain terminals project in Valdez. He
added that he had been in office when there was quite a bit
of legislative involvement in a project.
Representative Kawasaki referred to slide 4, with a pie
chart showing that the largest amount of AIDEA projects
were in the mining sector. He referred to a comment about
the mining industry having risk, and wondered if the
project area was mainly comprised of the Red Dog Mine.
Mr. Parady confirmed that AIDEA had invested in the Red Dog
Mine, which was providing a stable source of income.
Representative Kawasaki asked if the concept of bringing
out an oil and gas fund separately was based on the oil and
gas industry being considered to be volatile. He wondered
if the industry was always volatile, or if the state of oil
and gas prices had become especially changeable.
Mr. Therriault recognized that there had been volatility in
the oil and gas industry, and asserted that the type of
lending involved in oil and gas projects had a different
risk-reward profile. He shared that AIDEA expected to
charge a higher interest rate; and as the project category
grew in scope, it would start to impact the overall blended
rate of AIDEA's overall portfolio. He relayed that AIDEA's
financial advisors had shared the concern with the board,
and if it continued to be approached by that type of
lending, it would start to impact what could be done out of
the whole blended portfolio.
3:51:56 PM
Representative Kawasaki referred to the part of the bill
pertaining to the powers and duties of the new fund on page
7, Section 44.88.880. He referenced language stating that
the authority shall adopt some regulations dealing with the
confirmation of proven reserves; and on page 8, language
referring to fiscal controls and accounting procedures for
the infrastructure. He asked Mr. Therriault to explain
exactly what AIDEA would be prescribed to do as a result of
the bill language.
Mr. Parady deferred to Mr. Springsteen.
Mr. Springsteen asked Representative Kawasaki to repeat his
question.
Representative Kawasaki reiterated his question referring
to the new part of the bill pertaining to oil and gas
infrastructure development, including the fund itself and
the powers and duties. The section in question mentioned
confirmation of the existence of proven reserves, and
sufficient proposed project financing. He thought it looked
as though (under the bill) the authority would have to
confirm the proven reserves and prove that project was
viable.
Mr. Springsteen stated that in addition to internal due
diligence processes, regulation that further defined the
approach used as AIDEA examined project developers was up
for discussion. He stated that with the current recommended
sideboards, there was a maximum of 50 percent participation
or $100 million (the lesser of the two), so it was
necessary to ensure that a project partner could provide a
capital contribution that was equal to or greater than what
AIDEA put forth. He addressed the discussion pertaining to
proven reserves, which was in aid of over-collateralizing
AIDEA's loan to a project developer. He furthered that that
there was some definition that existed in statute, but it
would be further addressed in regulation and in AIDEA's
due-diligence process.
3:54:48 PM
Representative Wilson referred to slide 8, which stated
that after opting to use AIDEA financing, projects may no
longer use tax credits for exploration and development or
production tax credits. She wanted to better understand the
reasoning behind the language, considering that the tax
credits were earned.
Mr. Parady answered that given the existence of the tax
credits, and the ongoing discussion regarding the topic,
AIDEA was trying to create a new loan tool and not further
extend the state's exposure in the construction of the tax
credits. He relayed that DOR Deputy Commissioner Jerry
Burnett was present and available to provide additional
information.
Representative Wilson maintained that she understood the
liability aspect of the matter. She asked what kind of
companies might participate in the proposed loan program if
AIDEA was considering higher interest rates and not
allowing tax credits. She thought a regular bank might be
more attractive to businesses, which could utilize the tax
credits as collateral.
Mr. Parady referred to ongoing debate pertaining to oil and
gas tax credits in the state.
Co-Chair Thompson referred to prior testimony on another
bill, and reported that some companies had borrowed money
to do project work, expecting tax credits to pay for what
had been borrowed. He asserted that if AIDEA used market
interest rates, the amount would be much lower than
businesses would receive in the marketplace, considering
the uncertainty of tax credit payments.
3:57:13 PM
Representative Wilson understood that companies were able
to take tax credit certificates to the bank, and the
interest rate would be dropped and the company could borrow
less money. She was trying to figure out why the state was
considering tying itself to a loan program to help small
and medium sized oil companies, and tying tax credits to
the program. She understood the state had a liability, but
did not understand why the new program would be
advantageous for companies.
Mr. Parady restated that no one was making anyone do
anything. He asked Mr. Springsteen to further amplify his
comment.
Mr. Springsteen confirmed that it would be the choice of
the applicant to utilize the proposed loan program. He
stated that AIDEA used "market-based rates" versus market
rates; whereby the authority started with an "arm's length"
rate that a developer could get by going out for financing
in the market. Additionally, AIDEA would perform another
layer of analysis and to identify potential benefits to
Alaskans such as job creation, royalty, and tax revenue. He
confirmed that AIDEA could make adjustments to the interest
rate after starting with a market rate and considering the
additional benefits provided to Alaskans.
Mr. Therriault referred to page 8, lines 19 to 21 of the
bill, which clarified that an oil and gas company was able
to apply for tax credits in order to look for or delineate
a resource. A company could go to AIDEA for financing for
surface infrastructure to produce a resource, but would not
be able to utilize tax credits after engaging in financing
with AIDEA.
4:00:33 PM
Representative Wilson thought it seemed that the proposed
program was tied to the tax credit program. She asked if it
was the belief of AIDEA that smaller and medium size
companies would have more difficulty going to the private
sector for financing because tax credits were not being
paid as quickly.
Mr. Parady responded that the origination of the bill idea
was born in the overweighting of the oil and gas sector in
AIDEA's revolving loan portfolio. He expressed that to the
degree it was possible, he wanted to stay disentangled from
the subject of oil and gas tax credits. He emphasized that
AIDEA was focused on creating a tool that would support
small and medium size companies. He stated that AIDEA had a
strong balance sheet and a very positive and strong credit
rating; and had access to liquidity that was useful in a
range of applications, including the oil and gas sector.
Co-Chair Thompson acknowledged Speaker Chenault in the
audience.
Representative Wilson pointed out that oil and gas tax
credits were mentioned in the bill. She referred to
concerns outlined in a letter from the Alaska Oil and Gas
Association (AOGA), as well as a concern outlined in a
letter from the governor. She did not understand the
portion of the letter referring to AIDEA being given the
authority to take a lien or security interest in real or
personal property, with respect to an oil or gas
infrastructure development. She wanted to ensure that in no
way the bill would be a way to get out of the state's tax
credit liability, and now owning oil fields.
4:03:41 PM
Co-Chair Neuman asked if the state would be competing
against banks that would otherwise be making loans to the
same companies.
Mr. Therriault believed that AIDEA had a good relationship
with banking institutions, particularly with in-state
banks. He explained that with the type of infrastructure
being considered, the dollar amounts were high; and quite
often AIDEA would partner with a bank or offer a loan
guarantee for lending by an in-state bank. He continued
that the banking institutions in the state (and the bankers
association) watched AIDEA and were vocal if it considered
that AIDEA had "stepped across the line" by being beyond
partnering with the banks or picking up in a niche area
where the banks were not able to operate.
Co-Chair Neuman relayed that he would have his office check
with the banking association on the matter. He wanted to
ensure AIDEA was not competing with private industry. He
stated that many times AIDEA was able to assist projects in
instances where banks would not.
Vice-Chair Saddler referred to lines 5 and 7 on page 6 of
the bill; and noted that the bill raised the loan
participation rate from one-third to 50 percent. He noted
that line 7 discussed a loan guarantee on a hard dollar
amount, which would be raised from $20 million to $25
million. He wondered if there was a hard dollar limit on
the amount of a loan that could be made under sub-paragraph
1, line 5.
4:06:16 PM
Mr. Springsteen asked if Vice-Chair Saddler was referring
to the SETS and Arctic Infrastructure programs, or to the
Oil and Gas Infrastructure loan program.
Vice-Chair Saddler clarified that he was referring to the
SETS Fund.
Mr. Springsteen stated that currently the limit on loan
participation would be a percentage-based limit or
guarantee cap of $25 million.
Vice-Chair Saddler stated that there was one reference in
the bill to 50 percent of a loan, and $25 million of a loan
guarantee. He asked for an explanation of the difference
between a loan and a loan guarantee.
Mr. Springsteen explained that an AIDEA loan signified when
AIDEA was making a direct investment in a venture; versus
an AIDEA loan guarantee, where another lender provided
funds to a project, and the loan guarantee was provided as
a backstop to the loan. He continued that AIDEA's role in
the loan guarantee scenario would be a last resort.
Vice-Chair Saddler asked if there was a reason why there
was not a hard dollar limitation in the loan amount, nor a
percentage limitation on a loan guarantee amount.
Mr. Therriault responded that the amounts were set in
statute by the legislature.
Representative Gara mused about why AIDEA was not also
funding exploration for oil and gas, and surmised that
exploration was not a lucrative venture.
Mr. Therriault stipulated that AIDEA felt comfortable
loaning for only the infrastructure for prudent reserves
rather than "wild catting."
Representative Gara understood why AIDEA would want there
to be prudent reserves before assisting with development of
said reserves. He was trying to find portions of the bill
pertaining to loan and financing being limited to proven
reserves. He asked if page 7, line 29 of the bill had
language about the limitation.
4:09:50 PM
AT EASE
4:12:07 PM
RECONVENED
Mr. Therriault observed that there was language stipulating
AIDEA had to show proven reserves to justify financing, but
could not find the specific reference that Representative
Gara was asking for.
Representative Gara wanted to ensure the bill contained the
limitation if it was intended to do so.
Mr. Therriault specified that the information was in the
definition section of the bill on page 9, line 6. He
continued that the language included a list of things the
financing tool could be used for; including roads, pads,
processing facilities, "for which reserves have been
proven."
Representative Gara asked if the language limited the
development fund, and meant the development fund applied to
places where proven reserves had been established.
Mr. Therriault answered in the affirmative, and continued
that the authority was supposed to put together a process
to guarantee that the information was correct and the
reserves did exist.
Representative Gara recalled that the state used to have an
agency that helped to finance start-up businesses. The
agency had been eliminated, and he wondered if it had been
the entity that had financed the aforementioned "fish
church."
Mr. Therriault did not recall.
Representative Gara recalled that the fish church had not
been an AIDEA project.
4:14:47 PM
Vice-Chair Saddler observed that the same percentage
limitations existed on loan guarantees and the same dollar
amount limits existed on AIDEA loans for both the SETS Fund
and the Arctic Infrastructure Fund as well as for the
proposed Oil and Gas Infrastructure Fund. He wondered if it
would help or hinder AIDEA if there were hard dollar limits
to direct AIDEA loans, and percentage-based limits on AIDEA
loan guarantees.
Mr. Therriault responded that the authority of AIDEA was
comfortable with the existing structure in the SETS Fund
and Arctic Infrastructure Fund, and the authority had
interacted with the legislature at the time the limits were
being set. He stated that adjustments were being proposed
that would bring the two fund limits to match the fund
limits for the proposed fund. In addition, the House
Resource Committee was concerned enough about oil and gas
lending that it had put in a hard dollar amount limit of
$100 million. He iterated that there was a 50 percent or
$100 million limitation on the proposed fund.
Vice-Chair Saddler asked if the same hard dollar limit
should be imposed on the participation in loan guarantees
for the SETS Fund and the Arctic Infrastructure Fund.
Mr. Therriault responded that AIDEA was more comfortable
without the limits being added.
Vice-Chair Saddler asked if he was correct interpreting
that there were no limits on loan guarantees (by dollar or
percentage of participation).
Mr. Therriault stated that more flexibility for the AIDEA
board was preferred, and confirmed that there were no hard
dollar amount limits for loan participation; but in the
SETS Fund and the Arctic Infrastructure Fund, the existing
statutory limit for loan guarantees was $20 million, and
AIDEA was suggesting the limit be adjusted up to $25
million.
Vice-Chair Saddler asked if there was a risk for the limit
to increase without the legislature being able to constrain
the percentage of a hard dollar limit, depending up on if
it were a guarantee or a loan.
Mr. Therriault relayed that in the two existing funds, the
limit was set by percentage, and AIDEA was suggesting the
limits be raised to 50 percent. If the authority wanted to
go beyond 50 percent, it would have to come back for
specific legislative approval.
4:17:53 PM
Co-Chair Neuman remarked that AIDEA was involved in Cook
Inlet Gas and gas in the Interior. He wondered if a company
could take part in the proposed program in order to build a
gas pipeline from Cook Inlet to Fairbanks.
Mr. Therriault referred to page 9 of the bill which defined
the kind of construction:
(20) "oil and gas infrastructure development" means
the acquisition, construction, or installation of and
engineering for the construction or installation of a
road, pad, camp, processing facility, gathering
system, or other on-site improvement or equipment for
an oil or gas field located in the state that has been
explored and for which proven reserves have been
established;
Mr. Therriault clarified that "on-site" meant where the
resource was being produced. If a company were to come with
the desire to build a gas pipeline to transmit gas from the
Cook Inlet to Fairbanks, he did not think the activity
would fit the statutory definition. He continued that the
project might fit the SETS Fund definition, however, the
existing SETS definition had a preclusion that it was not
possible to build a pipeline from the North Slope or Cook
Inlet to deliver gas to market. He added that in the House
Resources Committee there had been a suggestion about a
similar limitation being put in the bill. Although it was
not anticipated that the Darwin Mine project would look to
AIDEA for financing, if it did so with the intention to
build a pipeline to deliver gas from Cook Inlet, the SETS
Fund would be a better fit yet had a preclusion.
Co-Chair Neuman asked if a company could take part in the
proposed program in order to build the infrastructure for a
gas pipeline from Cook Inlet to Fairbanks, while a business
partner built the pipeline itself. He wanted to ensure that
the state was not involved in competing pipelines, and
asked about possible sideboards.
Mr. Parady stated that the AIDEA board had a clear
understanding of the sideboards as established. He noted
that the SETS Fund stipulated no pipeline, and the proposed
Oil and Gas Infrastructure Fund had confining language
within the definition section. He viewed the language as
too narrow to be able to get to a pipeline. He stated that
if there was a wish to strengthen the language, it was in
the purview of the committee.
4:21:27 PM
Co-Chair Neuman suggested that maybe the legislature should
look to try and make sure there were more opportunities to
make such a project happen. He didn't see anything wrong
with the state doing components of a project such as he had
suggested.
Mr. Therriault stated that in the Houses Resources
Committee there had been 6 proposed amendments, the sixth
of which contained language proposed by the Speaker of the
House. The amendment had been withdrawn, but proposed a
similar limitation or exclusion so AIDEA did not somehow
have an entity that was building a pipeline across the
state. He relayed that there was enough concern that the
Speaker withdrew the amendment with the intent of mulling
the subject over further.
Mr. Therriault continued, and stated that with reference to
Cook Inlet, because of the existing ENSTAR system there
could be a scenario in which a company could develop proven
reserves of an oil and gas field on some acreage, and it
could be a mile to the ENSTAR system. Reaching out under
the AIDEA funding to get to the ENSTAR system would be
considered taking the resource to market. He did not think
that the state wanted to preclude production on-site, with
a very short distance to get to the pipeline system. He
reiterated that just a proposal to get gas from point A to
point B would fit within the statutory description. He
added that the hypothetical proposal may have fit under the
SETS Fund, but there was a specific exclusion. He suggested
that the committee might want to revisit the topic.
Co-Chair Neuman asked about Mr. Therriault's comments about
getting gas to market. He wondered if Mr. Therriault had
been referring to markets within Alaska, markets within
America, or global markets.
Mr. Therriault responded that the existing statute just
said "to market."
Co-Chair Neuman wondered if Mr. Therriault took the words
to mean global markets.
Mr. Therriault thought that perhaps at the time the
language was added, the legislature was considering it to
be global markets. He noted that there had been a lot of
debate about a pipeline at the time, to get Alaska's gas to
an overseas market. He thought it would be necessary to
examine the legislative record to determine exactly what
was intended by the phrase "to market."
4:24:15 PM
Representative Edgmon pointed to page 8 of the bill. He
thought the definitions for 'oil and gas infrastructure,'
and 'proven reserves' were straightforward. He addressed
the 'loan-to-value' description beginning on line 24 on
page 8:
(d) The authority may not provide financing under AS
44.88.880 if the loan-to-value ratio at the time of
financing exceeds 75 percent; the value of proven
reserves that are included in the value must be
calculated using the lesser of
Representative Edgmon wondered if further sideboards were
necessary given the fluctuation and volatility in current
economic conditions and government relations. He mused that
at the time of financing, the loan-to-value ratio might be
under 75 percent; but at a future time, the loan-to-value
ratio could become skewed and become higher than 75
percent.
Mr. Parady noted that the bill dictated that 'the value of
proven reserves that were included in the value must be
calculated.' As the AIDEA board assessed the loan-to-value
ratio, it would examine the nature of the overall package
of what was being valued in the loan-to-value ratio. The
assessment would include what the collateralization was,
and proven reserves were but one part. He thought that if
the board was looking at a loan that relied entirely on the
value of proven reserves, it would be greeted with a great
deal of skepticism.
Mr. Springsteen echoed Mr. Parady's comments, and stated
that the oil and gas reserves were but one part of the
collateral package in addition to all of the other parts of
the top-side infrastructure that was put in place and that
would hopefully also enable further development of
resources in the state. He furthered that the board looked
to be over-collateralized in the interest 735,000 Alaskan
shareholders.
Representative Edgmon referred to slide 2 of the
presentation, and commented on the risk profile of the
other four funds. He thought it was intuitive that AIDEA
was proposing to add an additional fund with a higher risk
profile. He referred back to his question regarding
additional sideboards for the loan-to-value ratio, and
asked for a confirmation of the board's position on the
matter.
Mr. Parady stated that the board had reviewed the issue,
and thought the most conservative element of the bill was
the loan-to-value ratio of 75 percent. After such a
conservative assumption was made, further conservative
assumptions about reserves were in the chain of
collateralization. When considering reserves, the amount
would be reduced by 10 percent from what was proven; and
then the lower of two pricing time frames was considered.
He commented on the imperfection of assessing risk. He
believed that the board was confident that the sideboards
were sufficiently conservative. He commented that AIDEA had
14 percent of its revolving loans invested in the oil and
gas sector, and the loans were performing well. He
commented on the well-established staff structure for
assessing risk.
Co-Chair Neuman referred to Representative Edgmon's
previous question, and asked if mines were evaluated by the
same measure of 75 percent of known reserves.
Mr. Parady stated that mining reserves were typically
evaluated differently, and were tied to the Toronto stock
exchange and the standard that Canada had established for
how reserves were quantified and evaluated.
Co-Chair Neuman had wondered if there were similar
mechanisms for evaluating mines.
Representative Edgmon referred to line 8 on page 8 of the
bill:
(A) 50 percent of the capital cost of an oil and gas
infrastructure development; or
Representative Edgmon asked if the language was referring
to the entire capital cost or a portion.
Mr. Therriault believed the language was referring to the
portion of the capital cost the project was bringing for
financing. If a project was self-financing or had separate
financing for another component of the development, the
language applied to the component that AIDEA was being
asked to participate in.
4:31:39 PM
Representative Edgmon asked if capital costs were defined
in AIDEA regulations or in statute.
Mr. Springsteen stated that it was addressed in regulation.
Vice-Chair Saddler was concerned with some of the
definitions. He asked if the limit would be 50 percent of
the capital cost that was being financed, rather than the
total cost with what a project was self-financing. He asked
if capital costs were defined sufficiently in regulations.
Mr. Springsteen responded in the affirmative.
Representative Wilson asked if AIDEA still be coming
forward with the bill if the state was able to pay all of
its tax credits as soon as they were turned in.
Mr. Therriault answered in the affirmative, because the
portion of AIDEA's existing loan portfolio had grown too
large. If AIDEA wanted to continue to loan on oil and gas
infrastructure activity, it needed a separate tool that
could accommodate the risk profile and the interest charged
for the specific type of lending.
Representative Wilson asked how important it was to leave
the tax credit language in the bill.
Mr. Therriault responded that the language was a policy
call on the part of the legislature.
Vice-Chair Saddler emphasized that oil and gas exploration
credits were not intrinsically bad, but might create a
temporary cash flow problem for the state. He stated that
the record showed that the tax credits were very
productive. He thought the idea that the loan would
supplant the need for tax credits was a policy call, but
suggested that the bill was presented to the committee with
the limitation that deprived the legislature of a policy
call. If an entity took a loan for oil and gas development
under the program, it would deprive itself of the
opportunity to take advantage of the credits. He did not
know if the tax credit language was necessary, and thought
it might be counter-productive.
Mr. Parady referred to Page 8, starting on line 19:
(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.
Mr. Parady noted that tax credits were available to
companies prior to the date specified in the bill, and it
was the company's choice as to whether to move forward with
AIDEA financing or not.
4:35:44 PM
Representative Edgmon read page 7, line 13 to 15:
(1) use the oil and gas infrastructure development
fund (AS 44.88.860) to finance oil and gas
infrastructure development, guarantee loans or bonds
for oil and gas infrastructure development, and
establish reserves;
Representative Edgmon asked about the definition of 'and
established reserves' in the bill section.
Mr. Therriault stated that the bill section pertained to
the operation of the loan mechanism itself, and referred to
financial reserves. He reported that the Legislative Legal
Department had advised that the language was similar to
that which appeared in the language for the SETS Fund and
the Arctic Fund.
Co-Chair Thompson thanked the presenters.
HB 246 was HEARD and HELD in committee for further
consideration.
Co-Chair Thompson reviewed the agenda for the meeting on
Saturday, June 4, 2016 at 3:00 p.m., at which time public
testimony would be heard.
Co-Chair Thompson recessed the meeting to a call of the
chair [Note: the meeting never reconvened].
ADJOURNMENT
4:38:12 PM
The meeting was adjourned at 4:38 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| Explaination of changes HB 246 version A to version W.pdf |
HFIN 6/3/2016 3:00:00 PM |
HB 246 |
| HB 246 NEW FN Fund Transfers 6-3-16.pdf |
HFIN 6/3/2016 3:00:00 PM |
HB 246 |
| HB246 Sectional Analysis for ver W.pdf |
HFIN 6/3/2016 3:00:00 PM |
HB 246 |
| HB246 Sectional Analysis to ver A.pdf |
HFIN 6/3/2016 3:00:00 PM |
HB 246 |
| Oil and Gas Infrastructure Development Fund presentation for H-Fin 6.3.16.pdf |
HFIN 6/3/2016 3:00:00 PM |
HB 246 |