Legislature(1997 - 1998)
02/24/1998 08:40 AM Senate FIN
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* first hearing in first committee of referral
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= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
SENATE BILL NO. 261
"An Act relating to the Special Olympics World Winter
Games to be held in Anchorage in the year 2001;
establishing a reserve fund for the games; providing
certain duties and authority for the Alaska Industrial
Development and Export Authority regarding financing
for those games; and providing for an effective date."
Co-chair Sharp called SB 261. He noted that it had been
held due to his absence and there had been concern regarding
the financing plan or guarantees.
Mary Gore, staff to Senate President Mike Miller, was
invited to join the committee. She said what was before the
committee today was changes to the original piece of
legislation that would tighten up the concerns the committee
noted last week. She said another changes had been
discussed between herself and Senator Donley on page three,
section 4(3). She said this change would make sure no money
would be appropriated to the organizing committee prior to
the year 2001.
Senator Donley referred to page three, line twelve and said
the organization desired financial assistance from the
State. It has now been modified that the plan being
submitted is a financial guarantee plan and not just a
request for money. He would further like to see language
added that would specifically say the local organizing
committee would make a good faith effort to raise money on
their own even when the financial plan is in place. He
suggested that on line nineteen language could be added to
ensure the local organizing committee uses it's best efforts
to minimize cost to the State so there is an ongoing written
responsibility by the local organizing committee to minimize
the cost to the State to continue to raise money.
Senator Adams said he agreed with the concept of the
amendment but would like to see it in writing to make sure
the sponsor does not mind and that it is on record. Co-
chair Sharp concurred.
Senator Donley said due diligence had been discussed and
there had been several attempts to incorporate that concept,
which he considered a good explanation of best effort. He
noted the drafters had refused to put it into ... Ms. Gore
said that was because it was not technical. Senator
Phillips reminded her that due diligence inquiries is done
in the oil and gas areas. Senator Donley concurred and said
he was confused by their refusal.
Senator Parnell said he had a procedural question and asked
if the Co-chair would like him to move the work draft and
have it adopted or would he rather they wait for Senator
Donley's changes. Co-chair Sharp said the work draft should
be adopted and then they could take up amendments if there
were any.
Senator Parnell MOVED work draft CSSB 261 (), "E" version,
dated 23 February 1998. Senator Adams OBJECTION. He asked
Ms. Gore regarding page three, line thirty, as to where the
actual money would be coming from. Ms. Gore said it would
be up to the Legislature in the year 2001 to make that
determination. Senator Adams asked if the organization had
designated any specific funding source? Ms. Gore indicated
negative. Senator Adams advised Co-chair Sharp that he
REMOVED his OBJECTION.
Co-chair Sharp said WITHOUT OBJECTION the work draft had
been ADOPTED.
Senator Donley asked there be discussion regarding his
suggested conceptual amendment on page three, line nineteen
after the word "State" be added "and ensures local organized
committee uses it's best efforts to minimize cost to the
State". Would the committee prefer to say "and insures the
local organizing committee uses due diligence to minimize
the cost to the State."?
Senator Parnell said they could certify the financial
guarantee plan that they've used due diligence or best
effort. He felt that might be another approach when the
financial plan was submitted.
Senator Donley referred to the original presentation of the
plan to the State. Subsequently there is a series of semi-
annual updates to the plan. It would be appropriate that
when the semi-annual updates were made that the organization
certified they used due diligence or good faith effort to
raise as much money on their own as possible. That could
probably be inserted under section (b).
Senator Adams asked that comments be heard from AIDEA staff
that was present.
Keith Laufer, Financial and Legal Affairs Manager, AIDEA was
invited to join the committee. Responding to Senator Donley
he said he felt the due diligence responsibility was with
AIDEA as opposed to the local committee. As he understood
the bill, they would submit a finance plan to AIDEA, which
by the amendment would have to minimize State assistance.
Perhaps the way to handle the concerns would be under
section (d), to amend it to read, "the finance plan and all
updates are subject to the approval of the authority
following reasonable due diligence." (pause on tape)
Senator Donley said the problem still existed with what the
committee wanted was not due diligence by AIDEA but that
AIDEA used due diligence to confirm due diligence by the
organizing committee. They did not want that once the
guarantee was put in place everyone would figure they did
not have to worry anymore because there was a financial
guarantee. He further told Ms. Gore he knew this was a
wonderful organization but they were also dealing with
people's money and therefore they would have to be
conservative and protect these monies.
Senator Parnell suggested that at line 19, after the word
"State" insert "and ensures the local sponsor organization
undertakes to acquire funds through private sources" ...
"the finance plan must include a method of financing the
games that minimizes the cost to the State and ensures the
local sponsor organization undertakes to acquire funds
through private sources."
Ms. Gore asked that it not be limited to private sources
because if the Government of Sri Lanka wanted to give money
to us...
Senator Parnell continued with "non-State of Alaska
sources". Or "sources other than the State of Alaska".
(Miscellaneous conversation among members at the table
followed regarding the correct wording of an amendment.)
Senator Phillips referred to the Arctic Winter Games that
were held in Eagle River in 1996. In order to start this
off the Municipality of Anchorage set it up with $100,000,
with an agreement that the organizing committee would pay
that money back. Granted he didn't think the City ever
expected the money back, but the community and the organized
committee did pay it back. The language in their agreement
might be looked at for suggestions. Senator Phillips said
he could call the City and get a copy of said agreement.
Senator Torgerson asked if there was a time line by which to
get this bill heard. Ms. Gore indicated that the
international committee had wanted it as soon possible. The
letter sent by Senate President Mike Miller and House
Speaker Gail Phillips last fall was basically buying time at
this point. The sooner it could be gotten to them as passed
legislation the better. For the record, she said the City
of Anchorage wants to bid on the big winter game. Private
industry in Anchorage is basically behind this. They are
not going to let this guarantee be used because if they
intend to go after the big games they cannot have this as a
black eye on their record that they did not come up with the
money for the Special Olympic Winter Games. They are
committed to raising the money. Three million dollars of
the eight million dollars has been raised to date and they
are continuing to raise money.
Senator Donley MOVED amendment #1 regarding lines 19 and 24.
Due to greater discussion by the members regarding the
amendment there was NO OBJECTION and it was ADOPTED.
Senator Torgerson posed a delayed objection so the sponsor
could read the amendment. (pause on record) He then
removed his objection.
Senator Parnell MOVED CSSB 261 FIN) as amended with
individual recommendations and accompanying zero fiscal note
and WITHOUT OBJECTION it was REPORTED OUT with individual
recommendations and accompanying zero fiscal note from
Department of Commerce and Economic Development/AIDEA.
Co-chair Sharp reviewed the afternoon schedule commencing at
4:30 p.m. with scheduled budget meeting to be chaired by
Senator Pearce. Thursday morning SB 273 would be on the
calendar and Thursday evening at 6:00 p.m. public testimony
would be taken Statewide on SB 36.
The co-chair further noted that the amendments to SB 273
Charitable Gaming had been rolled into a new CS for
presentation to the committee.
ADJOURNMENT
There being nothing further to come before the committee Co-
chair Sharp recessed at approximately 10:23 a.m.
SFC-98 -17- 2/24/98
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