SENATE BILL NO. 25 "An Act relating to participation by the Alaska Industrial Development and Export Authority in energy projects." 5:57:52 PM Co-Chair Hoffman MOVED to ADOPT the proposed committee substitute for SB 25, Work Draft 27-LS0290\S. Co-Chair Stedman OBJECTED for purpose of discussion. DARWIN PETERSON, STAFF, SENATE FINANCE COMMITTEE, explained the changes for CS SB 25 version S. He stated that Sections 3,4, and 5 had been added to the bill, and would exclude the value of the lease hold interest on AIDEA owned properties for the purpose of determining the full and true value by the state only if the local government chooses to exempt that property form the taxation. He furthered that AIDEA owned 5 major properties in Alaska that were leased to private operators: the aircraft maintenance facility at the Ted Stevens International Airport, the Skagway Ore Terminal, the Ketchikan Shipyard, the Red Dog Road and Port, and the Snettisham Hydroelectric Dam and Power Station. He said the full and true value determination was important to municipal governments in a number of ways; it determined the magnitude of the required local contribution component of state education aid, it impacted the required local share for school construction and major maintenance, it effected the amount of federal impact aid to which municipal school districts were entitled, and it limited property taxing capacity. He relayed that the exemption of the Red Dog Road and Port from the determination of the full and true value had allowed the Northwest Arctic Borough to avoid a loss of education funding estimated at $1 million annually. He concluded that the legislation would treat the rest of the AIDEA owned properties equally, giving the municipalities the choice of imposing property taxes or opting for the reduction in the local education contribution. Mr. Peterson discussed further changes in the bill: Section 6 The following changes were made to new section 6/old section 3: 1. No changes Section 7 The following changes were made to new section 7/old section 4: 1. No changes. Deletion Section 5 (page 4 lines 1-15 of the X version) was removed from the bill: 1. The subsequent sections were renumbered accordingly. Section 8 The language in section 8 retains the language found in section 6 of the X version with the following changes: 1. Replaced "energy project" with "qualified energy development" on page 6, line 28 and page 7, line 23. Section 9 The language in section 9 retains the language found in section 7 of the X version with the following change: 1. Replaced "energy project" with "qualified energy development" on page 8, line 20. Section 10 The language in section 10 retains the language found in section 8 of the X version with no changes. Section 11 The language in section 9 retains the language found in section 9 of the X version with no changes. Section 12 The language in section 9 retains the language found in section 10 of the X version with the following change: 1. Deleted the word "energy" preceding "loan" on page 9, line 17. Section 13 The language in section 13 retains the language found in section 11 of the X version with the following changes: 1. Deleted the word "energy" preceding "loan" on page 9, line 19. 2. Deleted the word "energy" preceding "loan" on page 9, line 28. 3. Deleted the word "energy" preceding "loan" on page 10, line 12. Section 14 The language in section 14 retains the language found in section 12 of the X version with the following change: 1. Deleted the word "energy" preceding "loan" on page 10, line 11. Section 15 The language in section 15 retains the language found in section 13 of the X version with no changes. Section 16 The language in section 14 retains the language found in section 14 of the X version with the following changes: 1. Replaced "energy projects" with "qualified energy development" on page 11, line 9-10. 2. Replaced "energy projects" with "qualified energy development" on page 12, line 2. 3. Replaced "energy projects" with "qualified energy development" on page 12, line 3. 4. Replaced "energy projects" with "qualified energy development" on page 12, line 7-8. 5. Replaced "energy projects" with "qualified energy development" on page 12, line 13-14. 6. Replaced "energy projects" with "qualified energy development" on page 12, line 17. 7. Inserted New Subsection (8) granting AIDEA the power to pay off the principal and interest on bonds issued by a municipal public utility and retain the payments from the utility in a sinking fund. 8. Replaced "energy projects" with "qualified energy development" on page 13, line 1. 9. Replaced "energy projects" with "qualified energy development" on page 13, line 8-9. Sect. 16 (Cont.) 10. Replaced "energy project" with "qualified energy development" on page 13, line 11-12. 11. Replaced "energy project" with "qualified energy development" on page 13, line 14-15. Section 17 Section 17 retains the language previously found in section 15 of the X version with the following changes: 1. Replaced "energy project" with "qualified energy development" on page 13 line 19. 2. Inserted "conservation" preceding "storage" on page 13, line 21. 3. Removed the conversion of natural gas, coal or biomass to liquids (page 11, line 8), the processing, refining, or upgrading of oil (page 11, line 9) and enhanced oil recovery or carbon sequestration (page 11, line 11) from the definition of "qualified energy development." New Sect. 18 Added a new section 16 repealing Sections 2 and 8 of ch. 10, SLA 2010 (the language exempting an integrated transportation and port facility owned by the authority from taxation and the sunset of the exemption.) Section 19 Section 19 retains the language previously found 16 of the X version. 6:02:31 PM Co-Chair Stedman WITHDREW his OBJECTION. There being no further objection Work Draft 27-LS0290\S was ADOPTED. Senator McGuire remarked that the changes in the bill correctly reflected the current financial climate. She relayed interest in partnering with venture capitalists across the globe. She hoped that the legislation would contribute to the diversification of the state's economy. 6:04:13 PM Co-Chair Stedman clarified that the legislation created a stable energy and transmission supply development program intended to generate more energy and electricity for the state. Co-Chair Stedman noted the two fiscal notes: FN2 (DCCED); NEW FN (SFIN). He added that a new fiscal note from the Department of Education and Early Childhood Development that reflected the changes made in Sections 3, 4, and 5 was forthcoming. Co-Chair Hoffman MOVED to report CS SS SB 25 (FIN) out of committee with individual recommendations and the accompanying fiscal notes. There being NO OBJECTION, it was so ordered. CSSB 25(FIN) was REPORTED out of committee with a "do pass" recommendation and with the previously published zero fiscal note: FN2 (CED), one new fiscal impact note from the Senate Finance Committee, and one forthcoming zero (EDC) fiscal note. 6:05:36 PM AT EASE 6:07:56 PM RECONVENED