Legislature(2005 - 2006)SENATE FINANCE 532
05/01/2006 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB500 | |
| HB283 | |
| HB338 | |
| HB83 | |
| SB160 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 231 | TELECONFERENCED | |
| += | SB 160 | TELECONFERENCED | |
| + | HB 500 | TELECONFERENCED | |
| += | HB 283 | TELECONFERENCED | |
| + | HB 338 | TELECONFERENCED | |
| + | HB 83 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE BILL NO. 500
"An Act amending the principal amount of bonds that may be
issued by the Alaska Industrial Development and Export
Authority for the purpose of financing the development of
Hatcher Pass."
This was the first hearing for this bill in the Senate Finance
Committee.
9:12:21 AM
BEN MULLIGAN, Staff to Representative Bill Stoltze, the bill's
sponsor, informed the Committee this bill would allow the
Matanuska-Susitna (Mat-Su) Borough to advance its Hatcher Pass
development efforts by expanding the scope of what the Alaska
Industrial Development and Export Authority (AIDEA) bonds and
other financing could be utilized for. In addition, the AIDEA
bond authority would be increased from $15 million to $25
million.
Co-Chair Green summarized the bill. It would expand the scope of
the project and increase the bond amount.
Mr. Mulligan affirmed.
9:13:42 AM
JOHN DUFFY, Manager, Matanuska-Susitna Borough, testified via
teleconference from an offnet site in support of the bill.
Granting this authority to AIDEA is essential to the project, as
AIDEA's "participation is critical to the success of this
public/private partnership" proposed for Hatcher Pass. This
project is the result of the Borough's long-term economic
development effort to enhance its economy, diversify the area's
tax base, and increase recreational opportunities.
Mr. Duffy stated that both the Borough and the State have
contributed money for infrastructure improvements. He
particularly acknowledged Co-Chair Green's efforts in getting
electric power expanded to the site. The Borough has funded
geotechnical and hydrological studies and an economic impact
assessment, which concluded that the project would create
approximately 1,500 jobs. The construction phase of the project
is anticipated to cost $41 million. "A very strong cooperative
effort" between the Department of Natural Resources' Division of
Mining, Land and Water and the Division of Parks & Outdoor
Recreation State Parks, and the Borough also furthered the
advancement of this project.
9:16:04 AM
DAVID GERMER, Project Manager, JL Properties, Inc. testified via
teleconference from Anchorage. Cooperative efforts on this
project began in October 2003 when JL Properties, a private
sector business, "responded to a solicitation from the Borough
to develop an alpine and nordic ski area at Hatcher Pass".
During the next two years, JL Properties, the Borough, and
Borough consultants worked on developing the scope of the
project and a financial plan. In order to ensure the overall
success of the project, it was determined that the project must
"integrate an alpine ski area, a residential community, and a
Nordic ski area and trail system".
Mr. Germer characterized the development of the financial plan,
which would include "a unique blend of private and public
financing", as "quite challenging". AIDEA's participation "is an
integral part of the financing plan", and the approval of this
legislation would be essential to the project. The next step
would be for the Borough, AIDEA, and JL Properties to
independently "conduct its own due diligence analysis" on "the
financial feasibility of the project". AIDEA's Board of
Directors would base their decision on whether or not to approve
the financing plan upon the due diligence analysis and the
financial feasibility studies. Approval of the financing plan
would allow construction of the project to commence in the
summer of 2006 with a completion date of spring 2008.
9:18:33 AM
JIM MCMILLAN, Deputy Director, Credit and Business Development,
Alaska Industrial Development & Export Authority, Department of
Commerce, Community and Economic Development testified in Juneau
in support of the bill. Alaska Statute (AS) 44.88 would require
AIDEA to receive Legislative authority in order "to issue in
excess of ten million dollars worth of bonds". He clarified that
passage of this legislation "would not guarantee financing". It
would however, allow AIDEA to conduct the due diligence and
project feasibility analysis. This effort would allow AIDEA to
review technical, operational, and financial aspects of the
project and determine how "to mitigate" any risks found. Were
the project to be deemed feasible, "a finance plan will be the
presented to AIDEA's Board of Directors for approval".
Mr. McMillan reminded the Committee that AIDEA has been
associated with the efforts to develop Hatcher Pass for many
years. While numerous proposals had been discussed, none were
advanced. However, the conceptual plan being presented is
"worthy of our consideration", as AIDEA deems the timing, the
plan, and the private developer involved in the project with the
Mat-Su Borough as being the "right" mix of circumstances.
9:20:47 AM
Co-Chair Green pointed out that language in the Analysis section
of the Department of Commerce, Community and Economic
Development's fiscal note #1, specifies that this bond
authorization would have "no fiscal impact on AIDEA operations".
9:20:59 AM
Mr. McMillan affirmed the passage of this legislation would have
no fiscal impact on AIDEA. This legislation "is merely the
authorization to move forward with the feasibility work". Were
the Board to authorize the financing of the project, there
"would be additional receipts to AIDEA", which could be used to
support such things as operations and dividends.
Co-Chair Green observed that the bill would increase the level
of bonds that could be authorized by AIDEA.
Mr. McMillan concurred.
9:21:39 AM
Senator Olson asked the reason for increasing the bond
authorization from $15 million to $25 million.
Mr. McMillan responded that the original bill on the Hatcher
Pass project was passed in 1998. That proposal was limited to
the development of a $20 million alpine ski area. The project
now proposed is "much more expansive and comprehensive", with an
anticipated project cost of $42 million; thus, the need to
increase AIDEA's participation.
Co-Chair Green deemed the public and private sector partnership
being advanced in this project to differ from most other
projects presented to the Committee.
Co-Chair Wilken moved to report the bill from Committee with
individual recommendations and accompanying fiscal notes.
Without objection, HB 500 was REPORTED from Committee with
previous zero fiscal note #1 dated April 14, 2006 from the
Department of Commerce, Community and Economic Development.
AT EASE 9:23:30 AM / 9:25:00 AM
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