Legislature(1999 - 2000)
03/28/2000 02:04 PM Senate L&C
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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SB 248-AIDEA: BONDS & RURAL DEVELOPMENT
MR. KEITH LAUFER, Financial Manager for the Alaska Industrial
Development & Export Authority (AIDEA), stated SB 248 has three
main elements that extend AIDEA's general bonding authority: it
transfers the Rural Development Initiative Fund Loan Program from
the Department of Community & Economic Development (DCED) to AIDEA;
and it makes technical changes to the provisions of existing laws
dealing with tax exemption and payment in lieu of tax agreements
related to AIDEA owned properties.
The bonding sunset date is one of several periodic sunsets the
legislature has put into AIDEA's bonding authority. The current
sunset would become effective July 1, 2000, and would prevent AIDEA
from issuing all bonds, other than refunding bonds, without
specific legislative approval. The sunset would prevent AIDEA from
issuing bonds under $10 million for developing finance projects.
Bonds over $10 million require legislative approval, and will
continue to do so. The sunset will also prevent AIDEA from issuing
conduit revenue bonds, these bonds AIDEA can issue for specific
private projects. They do not obligate the State's credit or
AIDEA's credit; these projects can obtain tax exempt financing
under the Internal Revenue Code. SB 248 would extend the sunset
provision until July 1, 2003, and makes clear the conduit revenue
bonds would not be subject to the future sunset.
The transfer of the Rural Development Initiative Fund Loan Program
to AIDEA was formerly with Department of Community & Regional
Affairs (DCRA) and now falls under the control of DCED. This
program makes loans available under $200,000 to businesses and
communities of less than 5000 people. AIDEA has supported this
program for many years in conjunction with AIDEA's loan guarantee
program. In 1993 and 1996, the legislature authorized AIDEA to
purchase loan portfolios from the State and use the proceeds from
those purchases to recapitalize the program. SB 248 would transfer
the program to AIDEA, and will allow the program to be self-
sustaining without the need for periodic legislative
appropriations.
SB 248 makes some technical changes to the tax exemption provisions
of existing law. Under existing law, local jurisdictions may
exempt users of AIDEA owned development projects from property tax,
or may enter into payment in lieu of tax agreements with the users
of those projects. However, existing law is not clear about the
mechanism that will be used to accomplish this.
SENATOR KELLY asked if there were any changes to the language on
page 4, section 9 regarding the Rural Development Initiative Fund.
MR. LAUFER stated SB 248 changes the name of the old fund within
the DCED and creates a new fund within AIDEA. An appropriation
piece of legislation will allow AIDEA to purchase the existing
portfolio from the State.
SENATOR KELLY asked what the previous name was.
MR. LAUFER replied the Rural Development Economic Initiative Fund.
SENATOR KELLY asked if there are any changes to the language on the
new Rural Development Initiative Fund from the old program.
MR. LAUFER stated no. Slight changes have been made in AS
44.88.600 to clarify how it resides within AIDEA, but no changes
have been made to the program.
CHAIRMAN MACKIE asked Mr. Laufer if he knew of opposition to SB
248.
MR. LAUFER stated no.
SENATOR LEMAN moved SB 248 with individual recommendations and
accompanying fiscal notes. Without objection, the motion carried.
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