Legislature(2011 - 2012)BELTZ 105 (TSBldg)
03/31/2011 02:00 PM Senate LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| SB51 | |
| SB40 | |
| SB51 | |
| SB32 | |
| HB13 | |
| HB119 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| + | HB 119 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 40 | TELECONFERENCED | |
| += | SB 51 | TELECONFERENCED | |
| += | SB 32 | TELECONFERENCED | |
| += | HB 13 | TELECONFERENCED | |
HB 119-AIDEA: PROCUREMENT; PROJECTS
2:23:07 PM
CHAIR EGAN announced HB 119 to be up for consideration [CSHB
119(EDT), version 27-GH1745\M, was before the committee]. It was
introduced by the House Special Committee on economic
Development, Trade, and Tourism by request of the Governor. He
said it was being presented by the administration.
MARK DAVIS, Economic Development Officer, Alaska Industrial and
Development and Export Authority (AIEDA), Department of
Commerce, Community and Economic Development (DCCED), explained
that this bill provides for expansion of the type of projects
that AIDEA can currently finance. Presently, AIDEA is authorized
to provide financing for natural resource development, industry,
tourism infrastructure and energy. Those four categories have
not been changed since 1993 and one major purpose of this bill
is the modernization and clarification of some of the projects
AIDEA could now engage in. Without the changes in CSHB 119,
AIDEA could not finance new sectors of the Alaska economy such
as communications or health care. Additionally, AIDEA is now
prevented from providing financial support for federal
facilities and they cannot support the military or the Coast
Guard in their endeavor to build new facilities in the state. In
the last year, AIDEA has been approached by a health care clinic
in rural Alaska and by the U.S. Coast Guard; in both instances
AIDEA approached the Department of Law to see whether current
statutes would let them build those facilities and lease them
back to the federal government, and the answer in both instances
was no. He said the support of the military has an important
role for economic development in Alaska.
2:25:44 PM
Additionally, he explained that CSHB 119 authorizes AIDEA to
better create public/private partnerships or what are commonly
known as PPPs; it does so by permitting the Authority to own
part of a project through the use of a limited liability (LLC)
company or through a corporation. The reason is as they worked
with private developers over the last year they have been
approached several times with the idea of AIDEA owning part of a
project, which they are allowed to do by statute, not in a
partnership but through an LLC. That is based on liability,
insurance and financing issues unfortunately, because they were
also advised by the Department of Law that presently they cannot
be a member of an LLC. The bill seeks to change that, so in the
future they can own part of a project through an LLC that would
also let them divest of that investment more rapidly once that
project was in good enough shape to go entirely to the
predecessor. This is one major of goal of AIDEA's new strategic
plan - to hold things for only a period of time, have an exit
strategy and get some backing in the private sector.
Another portion of CSHB 119 lets AIDEA create subsidiary
corporations. The purpose of letting AIDEA create a subsidiary
is that it could own a project, particular one developing new
technology, and the AIDEA board would be allowed to grant that
subsidiary the powers to own a project or to have bonding
authority, whatever is needed to get it going; but should it be
successful, it would be their intent to spin off the subsidiary
corporation back into the private sector as soon as it is ready.
A subsidiary corporation is an excellent way to sell a project,
because it can be done through selling shares rather than an
asset sale.
The other thing CSHB 119 does is it allows AIDEA to develop its
own procurement regulations. At present, it doesn't have any
procurement regulations; they are under the Department of
Administration for the procurement of services and equipment and
under the Department of Transportation and Public Facilities for
construction. There are certain exemptions in the AIDEA
statutes, for example the Healy Clean Coal Plant is entirely
exempt from the Procurement Code. Mr. Davis said they would
prefer to be under a single set of regulations for procurement.
In that regard, they have the support of Vern Jones, the chief
procurement officer for the Department of Administration and
Mark O'Brien, the chief contracts officer for the Department of
Transportation and Public Facilities. Both of those gentlemen
who have oversight over AIDEA think this is a better way to go.
This provision, which is an amendment to the Procurement Code,
is identical to the authority now granted to the Alaska Housing
Finance Corporation (AHFC) and the Knik Arm Bridge and Toll
Authority (KABATA). So, they would be treated in a similar
fashion as other public corporations in the state.
Saying that, Mr. Davis said he didn't mean the regulations
wouldn't follow the spirit of the Procurement Code; in fact,
this is an amendment to it. So, they would be required to follow
competitive bidding processes and all the provisions. The
difference would be for appeals; if it's a bid for supplies that
appeal goes to the commissioner of the DOA; if it's for
construction it goes to the commissioner of DOTPF. And at times
there has been confusion between the two. Now under the
regulations. a bid appeal would go to the AIDEA board and they
would hear it in a public process; all the board meetings are
recorded, people are allowed to call in if they can't appear
personally. It's a pretty open and transparent process to put
forward a bid.
2:29:45 PM
Finally, he said there has been a proposal to amend this by the
AHFC with regard to their need to create a subsidiary. He said
he had been authorized to tell them that the administration is
comfortable with the proposed amendment by the AHFC.
SENATOR MENARD asked how thorough he was in adding the new
categories. Would he come back to the legislature in two years
to ask for another category?
MR. DAVIS replied that that is an excellent question and the
genesis of the amendment to AS 44.88.909 is based on AIDEA's
strategic plan, specifically page 33, that working with
consultants and the public process (polling businesses
throughout the state and having public meetings) developed the
list over the course of a year. It includes transportation,
communications, community/public purposes, technical
innovations, prototype, commercial applications, or intellectual
property or planning a facility used for a federal facility.
It's pretty comprehensive and reflects the actual projects that
have been brought in to AIDEA over the last two years. It
reflects the views of both the business, banking and government
communities.
SENATOR MENARD said she appreciated that this could benefit the
state's field of technology, which would be beneficial to the
economy. She asked who makes up the board members since he wants
to increase it from five to seven members.
MR. DAVIS replied that the expansion of the AIDEA board was
passed by the legislature last year, but it has recently been
implemented. Previously, it had three government members
(commissioners) and two public members; it now has two public
members - the commissioner of DCCED and the commissioner of DOR
- joined by five private members. It's working very well.
CHAIR EGAN asked if he wanted to talk about the proposed
amendment.
MR. DAVIS deferred to Ms. Shubert.
2:33:54 PM
STACY SHUBERT, Director, Government Relations and Public
Affairs, Alaska Housing Finance Corporation (AHFC), thanked them
for the opportunity for introducing the conceptual amendment
that would allow for AHFC to create a subsidiary corporation as
well. Currently, more than 7,000 families are on the wait list
for AHFC rental assistance statewide, clearly a difficult issue.
AHFC's mission is to provide Alaskans access to safe, quality
and affordable housing. Currently, they are unable to become a
development partner with private entities in the acquisition,
creation and development of affordable housing and they
understand that nearly $4 million is available through federal
funds. With the creation of a subsidiary corporation such as
this, that could be leveraged to create additional affordable
housing in Alaska. That is what they hope the amendment
accomplishes.
CHAIR EGAN thanked everyone for their comments and said HB 119
would be held for the amendment to be added.
2:35:39 PM
Finding no further business to come before the committee, Chair
Egan adjourned the meeting at 2:35 p.m.
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