03/22/2004 09:05 AM Senate FIN

                                                                                                                                
     CS FOR SENATE BILL NO. 279(STA)                                                                                            
     "An Act  authorizing and relating  to the issuance of  bonds by                                                            
     the  Alaska  Housing Finance  Corporation  for  safe and  clean                                                            
     water  and hygienic sewage disposal  facility capital  projects                                                            
     and other capital  projects; providing for the repayment of the                                                            
     bonds  and bond  costs; relating  to the dividend  paid  to the                                                            
     state by the Alaska  Housing Finance Corporation; and providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
This was  the second  hearing for  this bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair Wilken explained  that this legislation would authorize the                                                            
Alaska Housing  Finance Corporation to issue bonds  in the amount of                                                            
$25 million to  fund capital projects; primarily village  safe water                                                            
projects.  He  noted   that  an  amendment  to  increase   the  bond                                                            
authorization  by $20 million was  adopted during the first  hearing                                                            
of the bill.  He stated that the bill  is accompanied by  Department                                                            
of Revenue fiscal note dated March 9, 2004.                                                                                     
                                                                                                                                
Co-Chair Wilken asked for  a further explanation of the new March 9,                                                            
2004 Department of Revenue  fiscal note as it is double the original                                                            
fiscal  note,  rather  than  being increased  "pro  rata"  with  the                                                            
adoption  of the amendment  that increased  the bond authority  from                                                            
$25 million to $45 million.                                                                                                     
                                                                                                                                
JOE   DUBLER,   Director  of   Finance,   Alaska   Housing   Finance                                                            
Corporation,  Department of  Revenue, testified  via teleconference                                                             
from Anchorage  to explain that the  fiscal note, dated February  9,                                                            
2004  was based  on interest  rates  that were  in  effect when  the                                                            
program was being developed.  Continuing he expressed that while the                                                            
current  interest  rate  is approximately  3.34  percent,  this  new                                                            
fiscal  note is  "conservatively"  calculated using  an approximate                                                             
five percent interest  rate in order to more accurately  reflect the                                                            
ceiling level of anticipated debt service.                                                                                      
                                                                                                                                
Senator  Bunde asked  whether this  legislation  addresses  concerns                                                            
that were raised in a Legislative  Budget and Audit report [copy not                                                            
provided] regarding  the proper use of funds for village  safe water                                                            
and wastewater programs.                                                                                                        
                                                                                                                                
Senator Dyson  responded that these  [unspecified] issues  have been                                                            
addressed.  He continued that assurance  has been provided  that the                                                            
issue in question  was "an anomaly and proper steps  are being taken                                                            
that it would never happen again."                                                                                              
                                                                                                                                
Co-Chair Wilken noted that,  "this is more than a one year process."                                                            
Continuing,  he asked for further  information as to how  AHFC would                                                            
monitor issues raised in the audit.                                                                                             
                                                                                                                                
BRIAN  BUTCHER,   Legislative   Liaison,   Alaska  Housing   Finance                                                            
Corporation,  Department of  Revenue, testified  via teleconference                                                             
from Anchorage and explained  that the decision as to where the bond                                                            
proceeds as well  as decisions regarding the AHFC  dividend would be                                                            
addressed  by  the Office  of  Management  and  Budget as  they  are                                                            
responsible  for the oversight  of the projects  in that "they  make                                                            
the decision as to where our money is spent."                                                                                   
                                                                                                                                
Co-Chair Green  moved to report SB  279, Version "D" from  Committee                                                            
with individual recommendations and accompanying fiscal note.                                                                   
                                                                                                                                
There being no objection, the bill was REPORTED from Committee.                                                                 
                                                                                                                                
[NOTE:  The  action  of  reporting  this  bill  from  Committee  was                                                            
readdressed following the action on SB 274.]                                                                                    
                                                                                                                                
                                                                                                                                
     CS FOR SENATE BILL NO. 279(STA)                                                                                            
     "An Act  authorizing and relating  to the issuance of  bonds by                                                            
     the  Alaska  Housing Finance  Corporation  for  safe and  clean                                                            
     water  and hygienic sewage disposal  facility capital  projects                                                            
     and other capital  projects; providing for the repayment of the                                                            
     bonds  and bond  costs; relating  to the dividend  paid  to the                                                            
     state by the Alaska  Housing Finance Corporation; and providing                                                            
     for an effective date."                                                                                                    
                                                                                                                                
                                                                                                                                
[NOTE: In order  to correct this meeting's earlier  Committee action                                                            
on this bill, it was again brought before the Committee.]                                                                       
                                                                                                                                
Co-Chair  Wilken  asked that  the  motion to  report  the bill  from                                                            
Committee  be  rescinded,  as an  amendment  that had  been  adopted                                                            
should have been reflected in the motion.                                                                                       
                                                                                                                                
Co-Chair Green  offered a motion to RECIND her motion  to REPORT the                                                            
bill from Committee.                                                                                                            
                                                                                                                                
There  being  no objection,  the  motion  to  report the  bill  from                                                            
Committee was RESCINDED.                                                                                                        
                                                                                                                                
Co-Chair Green moved to  report the Version "D" committee substitute                                                            
for   SB  279,   as  amended,   from   Committee   with   individual                                                            
recommendations and accompanying fiscal notes.                                                                                  
                                                                                                                                
There  being  no  objection,  CS SB  279  (FIN)  was  REPORTED  from                                                            
Committee  with a new zero  fiscal note, dated  March 9, 2004,  from                                                            
the Department of Revenue.