Legislature(2001 - 2002)
05/03/2002 01:40 PM Senate CRA
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* first hearing in first committee of referral
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ALASKA STATE LEGISLATURE
SENATE COMMUNITY & REGIONAL AFFAIRS COMMITTEE
May 3, 2002
1:40 p.m.
MEMBERS PRESENT
Senator John Torgerson, Chair
Senator Alan Austerman
Senator Randy Phillips
MEMBERS ABSENT
Senator Georgianna Lincoln
Senator Pete Kelly
COMMITTEE CALENDAR
SENATE BILL NO. 312
"An Act relating to enterprise zones."
MOVED CSSB 312(CRA) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 471(CRA)
"An Act increasing the maximum amount of loans from the bulk fuel
revolving loan fund operated by the Alaska Energy Authority;
relating to the definitions of 'net income' and 'unrestricted net
income' for purposes of determining the amount of the Alaska
Industrial Development and Export Authority's dividend to the
state; relating to communities within which rural development
loans may be made by the Alaska Industrial Development and Export
Authority; and providing for an effective date."
MOVED CSHB 471(CRA) OUT OF COMMITTEE
CS FOR HOUSE BILL NO. 521(CRA)
"An Act relating to municipal improvement areas."
MOVED CSHB 521 (CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
SB 312 - See CRA minutes dated 3/27/02.
HB 471 - No previous action to record.
HB 521 - No previous action to record.
WITNESS REGISTER
Jessica Menendez
Staff to Representative Joe Green
Alaska State Capitol, Room 403
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced HB 471
Bob Poe, Executive Director
Alaska Industrial Development & Export Authority (AIDEA)
Department of Community & Economic Development
813 W. Northern Lights Blvd.
Anchorage, AK 99503
POSITION STATEMENT: Testified on HB 471
Zach Warwick
Alaska State Capitol, Room 121
Juneau, AK 99801-1182
POSITION STATEMENT: Introduced SB 312
Representative Lisa Murkowski
Alaska State Capitol, Room 408
Juneau, AK 99801-1182
POSITION STATEMENT: Sponsor of HB 521
ACTION NARRATIVE
TAPE 02-11, SIDE A
CHAIRMAN JOHN TORGERSON called the Senate Community & Regional
Affairs Committee meeting to order at 1:40 p.m. Present were
Senators Austerman, Phillips and Chairman Torgerson.
HB 471-AIDEA LOANS AND DIVIDEND
JESSICA MENENDEZ, staff to Representative Joe Green, introduced
HB 471. It amends three important programs for Alaska Industrial
Development & Export Authority (AIDEA), the AIDEA dividend
calculation, the vote for the Bulk Fuel Revolving Loan Fund and
the Rural Development Initiative Fund (RDIF).
AIDEA is a self-supporting state authority that contributes an
annual dividend. To date and including this year's dividend of
over $20 million, they have contributed $129 million to the
state's general fund. The competition for the dividend is between
25 and 50 percent of net income for that base fiscal year but it
may not exceed AIDEA's unrestricted net income.
Two changes by the Governmental Accounting Standards Boards
(GASB) could change how AIDEA would calculate their dividend. In
their audited financial statements they no longer include the
term for net income so without that amount it doesn't give the
Board a clear directive how to compute the annual dividend. They
have also said that any intergovernmental transfers, capital
contributions or grants would need to be listed as an expense. If
listed as an expense, this would further reduce the dividend.
The bill also increases the maximum amount from the Bulk Fuel
Revolving Fund from $100,000.00 to $200,000.00. It is cheaper to
buy fuel in larger amounts in rural communities in particular.
They have the tank storage capacity for that and some communities
can only get one barge load of fuel per year so doubling the
maximum fills a demonstrated need.
Finally, the bill more clearly defines the eligibility
requirements for AIDEA's rural development initiative fund. This
program was developed for rural communities that had no other
funding options available to them. It defines those qualifying
participants to be living in a community of less than 5,000
people, not connected by road or rail or 2,000 people who are
connected by road and rail from Anchorage to Fairbanks.
BOB POE, Executive Director of AEDIA, testified via
teleconference. He said AIDEA has issued dividends since 1995 for
a total of $129 million. The new GASB changes mean AIDEA must
make sure that the dividend continues to work. [Tape
indiscernible] The increased amount in the Bulk Fuel Revolving
Loan Fund is to allow communities to buy in bulk. The USDA
recently gave them a grant of $5 million to the revolving loan
fund. [Tape indiscernible] Finally, the changes with respect to
the Rural Development Initiative Fund are to make sure that the
loan program works as intended.
CHAIRMAN TORGERSON asked for the reasoning behind the exemption
on road connected or not road connected and why he cared.
MR. POE said he didn't care whether they were road connected or
not, but they do care about the rural aspect. [Tape
indiscernible] It was really intended for communities that have
lodges in the wilderness or in truly rural communities. The group
that came up with the definition did their best to define rural
based on other definitions of rural.
CHAIRMAN TORGERSON remarked that's Alaska Housing definition. He
then asked what program they have for non-rural residents.
MR. POE said they have the Loan Participation Program in AEDEA,
which is an active program with a distribution that matches the
population distribution of the state. This year they will do
about $55 million in loan participation in conjunction with the
commercial banking industry. Amounts range from $15,000 to $10
million with up to a 25 year term.
CHAIRMAN TORGERSON then said he didn't see a definition of
community in 29.71.800 even though it was cited.
MR. POE asked whether there was anyone from the Department of Law
available to answer the question, but there was no one.
CHAIRMAN TORGERSON said he wouldn't hold the bill, but asked Mr.
Poe to look at the issue between then and the hearing in the next
committee of referral because he didn't think there was a
definition of community in the statute.
MR. POE agreed.
There was no further testimony.
SENATOR AUSTERMAN made a motion to move HB 471 and attached
fiscal note from committee with individual recommendations.
There being no objection, it was so ordered.
SB 312-ENTERPRISE ZONES
ZACH WARWICK, staff to Senator Gene Therriault, explained the
bill was a companion to HB 36 sponsored by Representative Joe
Hayes. They drafted three clarifying amendments to address the
concerns brought up during the previous hearing.
Amendment \A.1 was reference to U.S. code and in order to be a
state enterprise zone it had to already have been a federal
enterprise zone. The whole purpose of the bill is to offer tax
incentives and possibly get the federal enterprise zone
designations so \A.1 removes the U.S. code and keeps the original
language of what designates an enterprise zone.
SENATOR PHILLIPS made a motion to adopt amendment \A.1. There
being no objection, the amendment was adopted.
SENATOR AUSTERMAN made a motion to adopt amendment \A.2.
MR. WARWICK explained there is language in the bill that says the
groups that propose the enterprise zones must be cities and
boroughs, but there was language included in the bill that said
"except a city that is located in a borough." which would exempt
the City of Fairbanks, the City of North Pole and many others.
Amendment \A.2 removes that wording.
There being no objection, amendment \A.2 was adopted.
SENATOR PHILLIPS made a motion to adopt amendment \A.3.
MR. WARWICK explained \A.3 addressed Senator Lincoln's concern
regarding a census tract.
There being no objection, amendment \A.3 was adopted.
There was no further testimony.
SENATOR PHILLIPS made a motion to move CSSB 312(CRA) from
committee with attached fiscal note and individual
recommendations.
There being no objection, it was so ordered.
HB 521-MUNICIPAL IMPROVEMENT AREAS
CHAIRMAN TORGERSON announced the bill was the companion to SB 365
that was heard on April 24, 2002.
REPRESENTATIVE LISA MURKOWSKI, bill sponsor, said she was
available to answer questions, but the bill mirrored SB 365.
SENATOR AUSTERMAN made a motion to move HB 521 from committee
with attached fiscal note and individual recommendations.
There being no objection, it was so ordered.
ADJOURNMENT
There being no further business before the committee, the Senate
Community and Regional Affairs Committee meeting was adjourned at
2:05 p.m.
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