04/14/2012 03:15 PM House LABOR & COMMERCE

         SB 25-AIDEA: SUSTAINABLE ENERGY/ INTEREST RATE                                                                     
                                                                                                                                
3:44:06 PM                                                                                                                    
                                                                                                                                
CHAIR OLSON  announced that the  next order of business  would be                                                               
CS FOR  SPONSOR SUBSTITUTE FOR  SENATE BILL NO. 25(FIN),  "An Act                                                               
establishing  the  sustainable  energy  transmission  and  supply                                                               
development  program in  the  Alaska  Industrial Development  and                                                               
Export Authority;  relating to the  interest rates of  the Alaska                                                               
Industrial  Development and  Export  Authority;  and relating  to                                                               
taxes  paid  on  interests  in   property  owned  by  the  Alaska                                                               
Industrial  Development and  Export  Authority and  to the  local                                                               
contribution  for  public  education   funding  related  to  that                                                               
property."                                                                                                                      
                                                                                                                                
3:44:15 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  made  a  motion to  adopt  the  proposed                                                               
committee  substitute  (CS)  for   SB  25,  labeled  27-LS0290\L,                                                               
Kirsch, 4/14/12, as the working document.                                                                                       
                                                                                                                                
CHAIR OLSON  objection for purpose  of discussion [Version  L was                                                               
before the committee.]                                                                                                          
                                                                                                                                
3:45:18 PM                                                                                                                    
                                                                                                                                
TOM  WRIGHT, Staff,  Representative Mike  Chenault, Alaska  State                                                               
Legislature,   on  behalf   of   Representative  Mike   Chenault,                                                               
explained  the  changes in  Version  L,  which would  remove  the                                                               
property  tax  exemptions  of five  properties  owned  by  Alaska                                                               
Industrial  Development and  Export Authority  (AIDEA), including                                                               
the FedEx building in Anchorage,  the Ketchikan shipyard, part of                                                               
Red Dog.   He  explained Representative  Chenault thought  it was                                                               
best left to municipalities to  decide.  Additionally, the intent                                                               
language indicates  that the  legislature intends  to appropriate                                                               
during  fiscal years  2012 and  2014  a total  of $250,000,000  -                                                               
$125,000,000  this  year and  another  $125,000,000  in the  next                                                               
legislative session.   He offered it is up to  the legislature to                                                               
authorize any appropriations each year  so the intent language is                                                               
not necessary.  He said the  fiscal note is for $125,000,000 this                                                               
year  and   the  legislature  can   decide  to   appropriate  any                                                               
additional funds  if it  so desires next  session.   He explained                                                               
the third change exempts a  natural gas pipeline transporting gas                                                               
from the North  Slope to market.  He suggested  adding Cook Inlet                                                               
to market or any other field.   He clarified that way AIDEA would                                                               
not be financing or bonding  any major pipeline, but that doesn't                                                               
mean AIDEA  can't fund a  project for distribution lines  off the                                                               
main pipeline, just that they  won't be involved in the financing                                                               
of a main  transmission line from either Cook Inlet  or the North                                                               
Slope.                                                                                                                          
                                                                                                                                
3:47:30 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON  asked  for  clarification  on  the  page                                                               
reference.                                                                                                                      
                                                                                                                                
MR. WRIGHT referred to page 10, line 30 of SB 25.                                                                               
                                                                                                                                
3:48:07 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON moved to  adopt Conceptual Amendment 1, as                                                               
follows:  on page 10, line  30, following "North Slope to market"                                                               
insert, "or Cook Inlet."                                                                                                        
                                                                                                                                
3:48:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  SADDLER asked  whether  he wanted  it limited  to                                                               
those  two and  then acknowledged  it  should be  limited to  the                                                               
North Slope and Cook Inlet.                                                                                                     
                                                                                                                                
There  being no  further  objection, Conceptual  Amendment 1  was                                                               
adopted.                                                                                                                        
                                                                                                                                
3:49:08 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JOHNSON  asked for  the sponsor's comments  to the                                                               
amendments.                                                                                                                     
                                                                                                                                
3:49:20 PM                                                                                                                    
                                                                                                                                
MICHAEL  PAWLOWSKI, Staff,  Senator Lesil  McGuire, Alaska  State                                                               
Legislature, stated  that he understood the  committee's actions,                                                               
but pointed out the sponsor  supports the language which excluded                                                               
property owned by the AIDEA which  is exempt from city or borough                                                               
taxes.    He acknowledged  that  removal  of the  language  would                                                               
return the  fiscal note  to a  zero fiscal  note.   He reiterated                                                               
that as the  committee considers changes to note  the proposed CS                                                               
would substantively  reduce the fiscal  impact.  He  said Senator                                                               
McGuire was  fine with  the changes  in exclusion  of large-scale                                                               
natural gas  pipeline projects, and  was comfortable  with adding                                                               
the North Slope or Cook Inlet  language since the amount of money                                                               
in the fund is not enough  to get close to a large-scale project.                                                               
Additionally, funding  natural gas pipeline projects  would crowd                                                               
out other  projects this bill  is intended  to cover -  which are                                                               
the medium to smaller-scale projects around the state.                                                                          
                                                                                                                                
REPRESENTATIVE JOHNSON related he has answered his questions.                                                                   
                                                                                                                                
CHAIR OLSON removed his objection.                                                                                              
                                                                                                                                
3:51:06 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  JOHNSON moved  to report  the proposed  committee                                                               
substitute  (CS)   for  SB  25,  Version   27-LS-0290\L,  Kirsch,                                                               
4/14/12,   as  amended,   out   of   committee  with   individual                                                               
recommendations  and  the  accompanying fiscal  notes,  which  he                                                               
understood  would be  zero fiscal  notes in  the next  committee.                                                               
There  being  no further  objection,  the  HCSCSSS SB25(L&C)  was                                                               
reported from the House Labor and Commerce Standing Committee.