Legislature(2003 - 2004)
05/19/2003 03:23 PM House L&C
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ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
May 19, 2003
3:23 p.m.
MEMBERS PRESENT
Representative Tom Anderson, Chair
Representative Bob Lynn, Vice Chair
Representative Carl Gatto
Representative Norman Rokeberg
MEMBERS ABSENT
Representative Nancy Dahlstrom
Representative Harry Crawford
Representative David Guttenberg
COMMITTEE CALENDAR
CS FOR SENATE BILL NO. 73(FIN)
"An Act relating to the loan participation program of the Alaska
Industrial Development and Export Authority and to regulations
of the Alaska Industrial Development and Export Authority; and
providing for an effective date."
- MOVED CSSB 73(FIN) OUT OF COMMITTEE
CS FOR SENATE BILL NO. 112(FIN)
"An Act relating to tax refunds for government agency purchases
of fuel; and providing for an effective date."
- MOVED CSSB 112(FIN) OUT OF COMMITTEE
PREVIOUS ACTION
BILL: SB 73
SHORT TITLE:AIDEA: LOAN PARTICIPATION & REGULATIONS
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
02/19/03 0223 (S) READ THE FIRST TIME -
REFERRALS
02/19/03 0223 (S) L&C, FIN
02/19/03 0223 (S) FN1: ZERO(CED)
02/19/03 0223 (S) GOVERNOR'S TRANSMITTAL LETTER
02/27/03 (S) L&C AT 1:30 PM BELTZ 211
02/27/03 (S) Moved Out of Committee
02/27/03 (S) MINUTE(L&C)
02/28/03 0296 (S) L&C RPT 5DP
02/28/03 0296 (S) DP: BUNDE, SEEKINS, DAVIS,
FRENCH,
02/28/03 0296 (S) STEVENS G
02/28/03 0296 (S) FN1: ZERO(CED)
05/08/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
05/08/03 (S) Heard & Held
05/08/03 (S) MINUTE(FIN)
05/18/03 1546 (S) FIN RPT CS 3DP 4NR NEW TITLE
05/18/03 1546 (S) DP: GREEN, WILKEN, STEVENS B;
05/18/03 1546 (S) NR: TAYLOR, HOFFMAN, OLSON,
BUNDE
05/18/03 1546 (S) FN1: ZERO(CED)
05/18/03 1546 (S) RULES TO CALENDAR 5/18/2003
05/18/03 1550 (S) READ THE SECOND TIME
05/18/03 1550 (S) FIN CS ADOPTED UNAN CONSENT
05/18/03 1550 (S) ADVANCED TO THIRD READING
UNAN CONSENT
05/18/03 1550 (S) READ THE THIRD TIME CSSB
73(FIN)
05/18/03 1551 (S) PASSED Y14 N- E1 A5
05/18/03 1551 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/18/03 1560 (S) ELLIS NOTICE OF
RECONSIDERATION
05/18/03 1560 (S) RECON TAKEN UP SAME DAY UNAN
CONSENT
05/18/03 1560 (S) PASSED ON RECONSIDERATION Y15
N- E1 A4
05/18/03 1560 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/18/03 1576 (S) TRANSMITTED TO (H)
05/18/03 1576 (S) VERSION: CSSB 73(FIN)
05/18/03 1880 (H) READ THE FIRST TIME -
REFERRALS
05/18/03 1880 (H) L&C
05/18/03 (S) FIN AT 11:00 AM SENATE
FINANCE 532
05/18/03 (S) Moved CSSB 73(FIN) Out of
Committee -- Time Change --
05/18/03 (S) MINUTE(FIN)
05/19/03 1931 (H) RULES TO CALENDAR PENDING
REPORT
05/19/03 1931 (H) MOVED TO BOTTOM OF CALENDAR
05/19/03 1957 (H) L&C RPT 4DP
05/19/03 1957 (H) DP: LYNN, GATTO, ROKEBERG,
ANDERSON
05/19/03 1957 (H) FN1: ZERO(CED)
05/19/03 1968 (H) READ THE SECOND TIME
05/19/03 1968 (H) ADVANCED TO THIRD READING
5/20 CALENDAR
05/19/03 (H) L&C AT 3:15 PM CAPITOL 17
BILL: SB 112
SHORT TITLE:MOTOR FUEL TAX:GOVT AGENCY REFUNDS
SPONSOR(S): RLS BY REQUEST OF THE GOVERNOR
Jrn-Date Jrn-Page Action
03/06/03 0398 (S) READ THE FIRST TIME -
REFERRALS
03/06/03 0399 (S) TRA, FIN
03/06/03 0399 (S) FN1: (REV); FN2: ZERO(DEC)
03/06/03 0399 (S) GOVERNOR'S TRANSMITTAL LETTER
03/11/03 (S) TRA AT 1:30 PM TERRY MILLER
104
03/11/03 (S) Scheduled But Not Heard --
Location Change --
03/11/03 (S) MINUTE(TRA)
04/03/03 (S) TRA AT 1:30 PM BUTROVICH 205
04/03/03 (S) Heard & Held
04/03/03 (S) MINUTE(TRA)
04/24/03 (S) TRA AT 1:30 PM BUTROVICH 205
04/24/03 (S) Moved CSSB 112(TRA) Out of
Committee
04/24/03 (S) MINUTE(TRA)
04/25/03 0965 (S) TRA RPT CS 1DP 2DNP 2NR NEW
TITLE
04/25/03 0966 (S) DP: COWDERY; DNP: OLSON,
LINCOLN;
04/25/03 0966 (S) NR: THERRIAULT, WAGONER
04/25/03 0966 (S) FN1: (REV)
04/25/03 0966 (S) FN2: ZERO(DEC)
05/07/03 (S) FIN AT 9:00 AM SENATE FINANCE
532
05/07/03 (S) Heard & Held -- Recessed to
5:30 pm --
MINUTE(FIN)
05/18/03 1547 (S) FIN RPT CS 2DP 4NR NEW TITLE
05/18/03 1547 (S) NR: WILKEN, TAYLOR, HOFFMAN,
OLSON;
05/18/03 1547 (S) DP: GREEN, STEVENS B
05/18/03 1547 (S) FN3: ZERO(ADM)
05/18/03 1547 (S) FN4: ZERO(REV)
05/18/03 1547 (S) RULES TO CALENDAR 5/18/2003
05/18/03 1551 (S) READ THE SECOND TIME
05/18/03 1551 (S) FIN CS ADOPTED UNAN CONSENT
05/18/03 1551 (S) ADVANCED TO THIRD READING
UNAN CONSENT
05/18/03 1551 (S) READ THE THIRD TIME CSSB
112(FIN)
05/18/03 1552 (S) PASSED Y18 N1 E1
05/18/03 1552 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/18/03 1552 (S) OGAN NOTICE OF
RECONSIDERATION
05/18/03 1560 (S) RECON TAKEN UP SAME DAY UNAN
CONSENT
05/18/03 1561 (S) PASSED ON RECONSIDERATION Y18
N- E1 A1
05/18/03 1561 (S) EFFECTIVE DATE(S) SAME AS
PASSAGE
05/18/03 1576 (S) TRANSMITTED TO (H)
05/18/03 1576 (S) VERSION: CSSB 112(FIN)
05/18/03 1881 (H) READ THE FIRST TIME -
REFERRALS
05/18/03 1881 (H) L&C
05/18/03 (S) FIN AT 11:00 AM SENATE
FINANCE 532
05/18/03 (S) Moved CSSB 112(FIN) Out of
Committee -- Time Change --
05/18/03 (S) MINUTE(FIN)
05/19/03 1958 (H) L&C RPT 3DP 1NR
05/19/03 1958 (H) DP: LYNN, ROKEBERG, ANDERSON;
NR: GATTO
05/19/03 1958 (H) FN3: ZERO(ADM)
05/19/03 1958 (H) FN4: ZERO(REV)
05/19/03 (H) L&C AT 3:15 PM CAPITOL 17
WITNESS REGISTER
MIKE BARRY, Chairman of the Board
Alaska Industrial Development & Export Authority
POSITION STATEMENT: Spoke on behalf of the sponsor, Senate
Rules Committee by request of the governor.
KEVIN JARDELL, Assistant Commissioner
Office of the Commissioner
Department of Administration
POSITION STATEMENT: Spoke on behalf of the sponsor of SB 112,
Senate Rules Committee by request of the governor.
ACTION NARRATIVE
TAPE 03-55, SIDE A
Number 0001
CHAIR TOM ANDERSON called the House Labor and Commerce Standing
Committee meeting to order at 3:23 p.m. Representatives
Anderson, Lynn, Gatto, and Rokeberg were present at the call to
order.
SB 73-AIDEA: LOAN PARTICIPATION & REGULATIONS
CHAIR ANDERSON announced that the first order of business would
be CS FOR SENATE BILL NO. 73(FIN), "An Act relating to the loan
participation program of the Alaska Industrial Development and
Export Authority and to regulations of the Alaska Industrial
Development and Export Authority; and providing for an effective
date."
Number 0060
MIKE BARRY, Chairman of the Board, Alaska Industrial Development
& Export Authority (AIDEA), spoke on behalf of the sponsor,
Senate Rules Committee by request of the governor. He explained
that SB 73 allows AIDEA to extend flexibility and update the
loan participation program. This would cope with the low
interest rates, the lowest in 50 years. A large portion of
AIDEA's funds are invested in government bonds and that money
could be used more effectively by transferring it to a better
earning asset in the loan participation program. Historically,
the loan participation program has achieved a great deal of
success. The "charge-offs" in the loan participation program
are less than seven-tenths of 1 percent, which is far less than
the national average for commercial banks. Mr. Barry noted that
the total participation in AIDEA has declined over the years.
Number 0150
REPRESENTATIVE ROKEBERG asked if the [change] from $10 million
to $20 million is the stand-alone program or a ceiling without
legislative approval.
MR. BARRY explained that this [change] would extend [the account
amount] in any one project. He related that he didn't
anticipate that this would be widely used, although it would
allow AIDEA to expand its dialogue with the banks and perhaps
generate a few more deals. The $10 million doesn't go as far
today as it did when it was established many years ago, he
noted. In further response to Representative Rokeberg, Mr.
Barry clarified that in relation to bonding AIDEA has to
approach the legislature for anything in excess of $10 million.
REPRESENTATIVE ROKEBERG turned to the change from 20 percent to
10 percent on page 2, lines 18-19, and asked why that isn't
[considered] subsidizing the banking industry.
MR. BARRY explained that the change to 10 percent will allow the
bank to layoff more of the loan to AIDEA. He surmised that the
aforementioned helped the banks in the sense that they can
provide better service to their customers. However, AIDEA is
giving better terms than the banking community as a whole and
thus the customers want AIDEA to take a larger portion of the
loan, which fits with AIDEA's desire to expand the program. In
further response to Representative Rokeberg, Mr. Barry confirmed
that the 75 percent loan to value ratio is the maximum.
Number 0309
MR. BARRY, in response to Chair Anderson, explained that AIDEA
offers this loan participation program to all financial
institutions in the state. Those financial institutions do
their own underwriting through the procedures the institution
has, then the loan is brought to AIDEA. At that point, AIDEA's
credit folks do an independent underwriting of the loan, which
is why the experience is better than going solely to the bank.
In further response to Chair Anderson, Mr. Barry said, to his
knowledge, the only other state with an organization like AIDEA
is Pennsylvania.
Number 0367
REPRESENTATIVE ROKEBERG moved to report CSSB 73(FIN) out of
committee with individual recommendations and the accompanying
zero fiscal notes. There being no objection, it was so ordered.
SB 112-MOTOR FUEL TAX:GOVT AGENCY REFUNDS
CHAIR ANDERSON announced that the final order of business would
be CS FOR SENATE BILL NO. 112(FIN), "An Act relating to tax
refunds for government agency purchases of fuel; and providing
for an effective date."
Number 0412
KEVIN JARDELL, Assistant Commissioner, Office of the
Commissioner, Department of Administration, spoke on behalf of
the sponsor of SB 112, Senate Rules Committee by request of the
governor. Mr. Jardell explained that CSSB 112(FIN) now contains
a technical fix to a statute that will allow Alaska to fully
utilize its new credit card. Currently, a reseller of fuel when
purchasing fuel from a wholesaler pays the entire gas tax to the
wholesaler. [The reseller] recoups the tax when the gas is sold
to the consumer, who pays the fuel price plus the tax. However,
when the Department of Transportation & Public Facilities
(DOT&PF) purchases the fuel, the department doesn't pay the tax
because the state is exempt from the tax. Therefore, the
reseller doesn't recoup the tax paid when the purchaser is
DOT&PF. Current statute specifies that a reseller can recoup
the tax from the Department of Revenue by sending in forms.
However, the state's new credit card would assume the "headache"
with regard to recouping the tax rather than the reseller. In
order to use this ability the statutes need to be changed such
that the participation to include the state's credit card
company as well as the already specified reseller. Such a
change will make this process more efficient because the state
will only have to deal with one vendor, one entity, and one
form.
Number 0508
REPRESENTATIVE LYNN moved to report CSSB 112(FIN) out of
committee with individual recommendations and the accompanying
zero fiscal note. There being no objection, it was so ordered.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:30 p.m.
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