Legislature(2003 - 2004)
02/27/2003 01:43 PM House FIN
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 112
An Act relating to the authority of the Alaska
Industrial Development and Export Authority to issue
bonds; and providing for an effective date.
RON MILLER, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), ANCHORAGE,
explained that HB 112 would extend AIDEA's general bonding
authority to July 1, 2007. Without extension, AIDEA would
need legislative authorization to issue bonds for
development projects under $10 million dollars. AIDEA would
also be restricted from issuing any bonds to finance the
purchase of loan participations without legislation
authorization.
Mr. Miller provided examples of bonds that AIDEA has issued
that would require legislative authorization after July 1,
2003 if the bonding authority were to sunset.
· $8,020,000 AIDEA Revolving Fund Bonds, Series 1995A,
which provided tax-exempt funds for a loan
participation made to Kodiak Fish-Meal Company for a
fish by-product processing plant.
· $7,000,000 AIDEA Revolving Fund Bonds, Series 1991A,
which provided tax-exempt funds for the expansion
and improvement of the Unalaska Marine Center. The
project had legislative authorization.
Mr. Miller continued, the following requirement would not be
affected by HB 112:
· All development projects over $10,000,000 dollars
for which bonds are to be issued require legislative
authorization prior to issuing bonds.
· Prior to issuing bonds over $6,000,000 dollars,
AIDEA is required to receive approval from the local
government in which the projects are to be located.
· All development projects for which bonds are to be
issued require AIDEA to make findings that the
project is economically and financially feasible.
Mr. Miller noted that recently, AIDEA has only issued
refunding and conduit revenue bonds, which are not affected
by HB 112. If the bill does not pass, AIDEA would continue
to have the ability to issue refunding bonds and conduit
revenue bonds; however, the sunset extension provides AIDEA
the flexibility to assist in the financing of key
development projects. If the authorization is allowed to
sunset and depending on the timing of the potential
projects, AIDEA may have to wait for legislative
authorization to issue bonds. Allowing the bond authority
to sunset would eliminate a tool for AIDEA to assist
projects that could provide an economic benefit to the
State.
Co-Chair Harris MOVED to ADOPT work draft #23-GH1018\D,
Cook, 2/25/03 as the version of the bill before the
Committee. (Copy on File).
There being NO OBJECTION, it was adopted.
Co-Chair Harris asked in the new Section 2, what the repeals
references in Sections #3 and #19 were.
Mr. Miller responded that was a sunset provision on the
municipal tax exemption provision connected with the Red Dog
Mine. The legislation was passed in FY00, and there was
some question over the tax assessment. Prior to 1999, use
of that system was not assessed by the State tax assessor.
In 1999, the determination was changed and the legislature
in 2000, passed law to address the situation.
The Lone Mountain Transportation System is an AIDEA owned
project. TECK COMINCO has a none-exclusive use on it for
which they pay. For unknown reasons, the tax assessor in
1999, decided to access TECK COMINCO's use of that facility
for borough tax purposes. The proposed legislation would
remove that sunset.
Co-Chair Harris suggested that Representative Moses would be
interested in the Unalaska Marine Center project. He asked
if the Legislature did not authorize the bill, would there
need to be another piece of legislation. Mr. Miller
responded that was an example of a project that AIDEA would
have had to get legislative authorization for. AIDEA did
move forward with that project in 1991 and they did receive
some legislative authorization on the project.
Representative Stoltze referenced Section 2, indicating that
had been a product of Senator Halford.
ROBERT FUNT, ATTORNEY, REPRESENTING TECK COMINCO, ANCHORAGE,
indicated that he had been working on the project since
1999. He offered to answer questions of the Committee
regarding the assessment or related to the Red Dog Mine.
Representative Stoltze referenced Section 2. He stated that
he would not want to see these types of assets acting as
'impediments' to areas wanting to organize. He supported
repealing those sections.
Representative Foster MOVED to report CS HB 112 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal note.
There being NO OBJECTION, it was so ordered.
CS HB 112 (FIN) was reported out of Committee with a "do
pass" recommendation and with a zero fiscal note #1 by the
Department of Community & Economic Development.
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