05/10/2004 09:51 AM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 495(FIN)                                                                                             
     "An  Act allowing a  joint action agency  to encumber  property                                                            
     interests  for  security  purposes;   declaring  certain  joint                                                            
     action  agencies  to  be  political  subdivisions  for  certain                                                            
     purposes; restricting  the sale of property of the joint action                                                            
     agency; allowing  the joint action agency to  transfer property                                                            
     to security  interest holders  under a security interest  or to                                                            
     other parties  without legislative approval;  and providing for                                                            
     an effective date."                                                                                                        
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken  noted that  CS HB  495(FIN),  version 23-LS1681\I                                                             
would allow the  Four Dam Pool Power Agency (FDPPA)  to refinance an                                                            
approximate  $73   million  loan  owed  by  the  Alaska   Industrial                                                            
Development  and  Export  Authority  (AIDEA).  He  noted  that  this                                                            
legislation  is a companion bill to  SB 350-4 DAM POOL JOINT  ACTION                                                            
AGENCY, which  was previously heard  by the Committee, and  he noted                                                            
that  Senator B.  Stevens  has been  investigating  concerns  raised                                                            
during that bill's hearing in regards to FDPPA leases.                                                                          
                                                                                                                                
TIM  BARRY,  Staff  to  the  bill's  sponsor,  Representative   Bill                                                            
Williams,  stated  that he  is  available  to answer  any  questions                                                            
pertaining  to  the bill  or  to the  Sponsor's  statement  that  is                                                            
included in Members' packets.                                                                                                   
                                                                                                                                
Co-Chair Wilken  surmised that the  Committee understood  the intent                                                            
of the bill.                                                                                                                    
                                                                                                                                
Senator B. Stevens  recalled that during the Committee's  hearing of                                                            
SB 350, concerns  were raised regarding  the use of assets  operated                                                            
or leased by FDPPA,  as opposed to assets owned by  FDPPA, that were                                                            
proposed  to  be utilized  as  security  for  bonds.  The  pertinent                                                            
language  in  this  regard,  he noted,  is  located  in  Section  1,                                                            
subsection  (c)(6), on page  two, lines 17  through 20 in this  bill                                                            
that reads as follows.                                                                                                          
                                                                                                                                
     (6)  to use  facilities, projects,  and  related assets  owned,                                                            
     leased, or operated  by the joint action agency as security for                                                            
     bonds, notes,  mortgages, credit enhancement  devices, or other                                                            
     obligations.                                                                                                               
                                                                                                                                
Senator B. Stevens stated  that, in response to those concerns, this                                                            
bill's  sponsor and  members of  the FDPPA have  drafted  compromise                                                            
language.                                                                                                                       
                                                                                                                                
Amendment  #1: This  amendment  would  amend Section  1,  subsection                                                            
(c)(6) on page two, beginning on line 17 to read as follows:                                                                    
                                                                                                                                
     (6) to use facilities, projects, and related assets owned,                                                                 
     leased, or operated by the joint action agency as security in                                                              
     accordance with applicable law.                                                                                            
                                                                                                                                
Senator B. Stevens moved to adopt Amendment #1.                                                                                 
                                                                                                                                
Co-Chair  Wilken objected  for discussion.  He  asked whether  AIDEA                                                            
supports this amendment.                                                                                                        
                                                                                                                                
Senator  B. Stevens  responded  that,  in  addition to  AIDEA,  bond                                                            
councilors,  and interested parties  have reviewed and accepted  the                                                            
language of the amendment.                                                                                                      
                                                                                                                                
Co-Chair Wilken  affirmed with TOM LOUAS, a member  of the FDPPA who                                                            
was in the audience, that the amendment was acceptable to him.                                                                  
                                                                                                                                
Co-Chair Wilken removed his objection.                                                                                          
                                                                                                                                
There being no further objection, Amendment #1 was ADOPTED.                                                                     
                                                                                                                                
                                                                                                                                
SFC 04 # 114, Side B 10:38 AM                                                                                                   
                                                                                                                                
                                                                                                                                
Co-Chair Green moved to  report the bill, as amended, from Committee                                                            
with individual recommendations and accompanying fiscal notes.                                                                  
                                                                                                                                
There  being no  objection, SCS  CS HB  495(FIN)  was REPORTED  from                                                            
Committee  with zero fiscal  note #1, dated  March 1, 2004  from the                                                            
Department of Community and Economic Development.