Legislature(2003 - 2004)
02/27/2003 01:35 PM Senate L&C
| Audio | Topic |
|---|
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 73-AIDEA AUTHORITY TO ISSUE BONDS
CHAIR CON BUNDE announced SB 73 to be up for consideration.
MR. RON MILLER, Executive Director, Alaska Industrial Export
Development Authority (AIDEA), said SB 73 would extend AIDEA's
general bonding authority until July 1, 2007. Without this
extension, they would need legislative authorization to issue
bonds for development projects under $10 million and would be
restricted from issuing any bonds to finance the purchase of
loan participations without legislative authorization. Examples
of bond issues that would require legislative authorization
after July 1, 2003 are in the handout he provided. He noted:
The first was a series 1995 A revolving fund bond for
just over $8 million that provided tax exempt funds
for loan participation for Kodiak Fish Meal Company
for a fish by-product processing plant. The other is a
series 1991 A revolving fund bond for $7 million that
provided tax exempt bonds for expansion improvement of
the Unalaska Marine Center. That project also had
legislative authorization.
The following requirements are not affected by SB 73 -
all development projects over $10 million for which
bonds are to be issued do now require and still
require legislative authorization prior to issuing the
bonds. Prior to issuing bonds over $6 million, AIDEA
is required to receive approval from the local
government in which the project is to be located. All
development projects for which bonds are to be issued
require AIDEA to make findings that the project is
economically and financially feasible. This
legislation affects none of those requirements.
Recently, we've only issued refunded and conduit
revenue bonds, which are not affected by SB 73. If
this bill doesn't pass, we'll continue to have the
ability to issue refunding bonds and conduit revenue
bonds. However, the sunset extension provides AIDEA
the flexibility to assist in financing of key
development projects. If the sunset is allowed to go
forward, and depending on the timing of any potential
project, AIDEA would have to wait for legislative
authorization to issue bonds. Allowing this bond
authority to sunset would eliminate a tool for AIDEA
to use in economic development projects.
SENATOR SEEKINS questioned whether the due diligence requirement
of economic and financial feasibility would affected.
MR. MILLER replied that SB 73 wouldn't affect that.
SENATOR SEEKINS asked if the benefit is that AIDEA could offer
it on a tax-exempt basis and thereby make a project even more
economically feasible by potentially reducing the interest rate.
MR. MILLER replied that AIDEA has that authority now. He
explained that SB 73 would allow AIDEA to go forward with a
project that it would otherwise have to hold in abeyance until
the Legislature convenes.
SENATOR HOLLIS FRENCH asked how many bonding projects AIDEA
would take up in the next 12 months that are under $10-million.
MS. SARAH FISHER-GOOD, financial analyst for AIDEA and AEA,
explained that currently nothing is on AIDEA's docket that would
require issuing bonds for under $10-million.
SENATOR FRENCH asked the status of the two examples - the $8
million and $7 million bonding projects.
MR. MILLER replied that, in the past, those projects were funded
using this authorization.
SENATOR FRENCH asked how much bonding AIDEA does each year.
MS. FISHER-GOOD replied that the only bond AIDEA has issued
recently was a Federal Express refunding bond. The other issues
that are done are conduit revenue bonds.
CHAIR BUNDE closed the committee discussion on SB 73.
SENATOR RALPH SEEKINS moved to pass SB 73 from committee with
individual recommendations. There were no objections and the
roll was called. Senators Davis, French, Gary Stevens, Seekins
and Bunde voted in favor and SB 73 moved from committee.
| Document Name | Date/Time | Subjects |
|---|