04/26/2001 01:53 PM House FIN

HOUSE BILL NO. 175                                                                                                            
                                                                                                                                
     An Act making an appropriation to the Alaska Industrial                                                                    
     Development and Export Authority for power projects;                                                                       
     and providing for an effective date.                                                                                       
                                                                                                                                
Representative  Lancaster   MOVED  to  ADOPT   the  committee                                                                   
substitute  HB 175  (FIN), 22-LS0705\R,  Cramer, 4/26/01,  as                                                                   
the version  of the bill before  the Committee.   There being                                                                   
NO OBJECTION, it was adopted as the working document.                                                                           
                                                                                                                                
Representative  Lancaster explained the  changes made  to the                                                                   
proposed version of the legislation.                                                                                            
                                                                                                                                
Vice-Chair Bunde inquired the cost to the State.                                                                                
                                                                                                                                
                                                                                                                                
TAPE HFC 01 - 98, Side A                                                                                                      
                                                                                                                                
                                                                                                                                
KATELYN MARKLEY, (TESTIFIED VIA  TELECONFERENCE), DEVELOPMENT                                                                   
SPECIALIST, ALASKA INDUSTRIAL  DEVELOPMENT & EXPORT AUTHORITY                                                                   
(AIDEA),  DEPARTMENT  OF  COMMERCE  &  ECONOMIC  DEVELOPMENT,                                                                   
ANCHORAGE, explained  that if  the Committee decided  to look                                                                   
into compound  interest for the  next twenty years,  a number                                                                   
could  be determined.   She  added  that AIDEA  does not  use                                                                   
general fund  money, and  as such, it  would not be  a direct                                                                   
cost to the State.                                                                                                              
                                                                                                                                
Representative Lancaster  thought that some  project involved                                                                   
with Power Cost Equalization (PCE)  would have some amount to                                                                   
offset the interest.                                                                                                            
                                                                                                                                
Representative  Hudson understood that  the balance  would be                                                                   
taken  from   the  Railbelt  Energy  Fund.     Representative                                                                   
Lancaster stated  that was not  correct.  The total  would be                                                                   
$101  million dollars  which would  come out  of the  Capital                                                                   
Budget Reserve  (CBR).  Vice-Chair  Bunde discussed  the cost                                                                   
of inflation which would be "eaten".                                                                                            
                                                                                                                                
Representative  Whitaker spoke to  the cost of  lost earnings                                                                   
and then  taking no  action.   He urged  that all factors  be                                                                   
taken into consideration, as well as taking no action.                                                                          
                                                                                                                                
Representative  Croft asked  the significance  of putting  it                                                                   
into the Railbelt  Energy Fund since that is  not the funding                                                                   
source.   Representative  Lancaster  advised  that could  pay                                                                   
back  the  Railbelt  Energy  Fund.     Representative  Harris                                                                   
responded that was  the intent, but it was not  the manner in                                                                   
which  the bill  had  been written.    He proposed  that  the                                                                   
drafting of the bill should be scrutinized.                                                                                     
                                                                                                                                
Representative   Croft   referenced   Page   3,   the   lapse                                                                   
provisions, which  would lapse back  into the CBR.   He asked                                                                   
where  the loans  would be  paid.   Representative  Lancaster                                                                   
commented that  the payback would  be to the  Railbelt Energy                                                                   
Fund.                                                                                                                           
                                                                                                                                
Representative Hudson  asked further clarification  regarding                                                                   
the $100 million dollar loan being  paid back to the Railbelt                                                                   
Energy Fund.   Representative  Lancaster replied that was the                                                                   
intent.                                                                                                                         
                                                                                                                                
Vice-Chair  Bunde  stated  that  HB  175  would  be  HELD  in                                                                   
Committee for further consideration.