Legislature(2001 - 2002)
04/30/2002 03:08 PM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
GENERAL OBLIGATION BONDS
Co-Chair Mulder noted that there were $1.4 billion dollars
in general obligation (GO) bond requests. The attorneys
indicated that they could not be included in one ominous
bond bill. The intent was to use as few vehicles as possible
and identify consistent themes. He observed that HB 524
contains GO bonds for new schools and university
construction. House Bill 525 contains GO bonds for deferred
maintenance of public facilities. Bond debt reimbursement
was used for projects that did not fit into a GO bond
package, because they were previously leveraged [HB 528].
Representative Lancaster's energy bill [HB 175] was utilized
for the final component. House Bill 524 and HB 525 would
appear on the November general election ballot.
Co-Chair Mulder observed that projects were prioritized. The
priority lists were strictly used with one exception. In new
school construction, out of the first six schools: three
were in [Representative Kaspner's] district and three were
in Representative Foster's district. The proposed committee
substitute took the first two [in Representative Kaspner's
district] and the first two from Representative Foster's.
HOUSE BILL NO. 175
"An Act making an appropriation to the Alaska
Industrial Development and Export Authority for power
projects; and providing for an effective date."
Representative Lancaster MOVED to ADOPT Amendment 1:
Page 1, line 6, through page 3, line 28:
Delete all material and insert:
Section 1. ALASKA ENERGY AUTHORITY. (a) me unobligated
and unencumbered balance of the Railbelt energy fund
(AS 37.05.520) on the effective date of this Act is
appropriated to the Alaska Energy Authority for
investment by the authority to secure repayment of
bonds issued by the authority under AS 44.83 for the
following power and intertie projects:
(1) the sum of $20,300,000 is allocated to
upgrade and extend the Anchorage-Fairbanks power
transmission intertie to the Teeland substation;
(2) to make grants to the recipients named, for
the purposes described, and in the amounts set out
below:
Homer Electric Association replacement power
supply for Seldovia $2,000,000
Anchorage Municipal Light and Power Ekiutna
project transmission line upgrade 19,300,000
Golden Valley Electric Association line extension
872,000
Matanuska Electric Association line extension 500,000
(b) It is the intent of the legislature that, once the
bonds described in (a) of this section have been
repaid, the Alaska Industrial Development and Export
Authority will bring to the legislature a prioritized
list of energy projects that can be funded from the
revenue stream from the funds appropriated in (a) of
this section.
* Sec. 2. LAPSE OF APPROPRIATION. The appropriation
made by sec. 1(a) of this Act is to capitalize a fund
and does not lapse.
* Sec. 3. This Act takes effect immediately under AS
01.10.070(c)."
He explained that the amendment makes minor changes. He
observed that the amendment would also allow the Alaska
Industrial Development and Export Authority (AIDEA) to
compile a priority list for future consideration by the
legislature. The legislation would still be $43 million
dollars. The legislation utilizes the revenue stream from
the securitization of the Rail Belt Energy Fund, which would
no longer exist if the legislation were adopted.
Representative John Davies pointed out that the legislation
contains a smorgasbord of projects in terms of size and
duration of the debt repayment. He questioned if the intent
was to wait until the last project is repaid before the
revenue stream could be utilized again. Representative
Lancaster responded that it would be a function and a
request of AIDEA.
Representative John Davies MOVED to ADOPT an amendment on
page 2, line 2: insert "the."
Co-Chair Mulder explained that $73 million dollars would be
securitized; $43 million dollars would come off of the bonds
sales to pay for the projects. The interest off of the $73
million dollars pays for the bonds. The revenue stream is
driven from the interest on the bonds not the projects.
Representative John Davies questioned if some of the
projects would be paid off quicker than others. Co-Chair
Mulder stated that they would not. Representative John
Davies stressed that the intent is not to wait until the
last project is paid before there are new projects.
Representative Lancaster explained that funds would flow
immediately. The revenue stream, through AIDEA, from the
intertie fund would pay the bonds back. He observed that $43
million dollars would already be spent.
Representative Croft acknowledged that AIDEA will make the
decision, but expressed concern with the deletion of "with
the assistance of AREAC and the Denali Commission."
Co-Chair Mulder observed that the concern was that the focus
of the Denali Commission has been on economic development in
rural Alaska. He pointed out that the Rail Belt Energy Fund
centers on the rail belt energy grid. He felt that it was
not a compatible relationship. Representative Lancaster
agreed. Most projects are discussed through the Alaska
Industrial Development and Export Authority (AIDEA). It was
felt that it would be better to collect the bonds through
AIDEA.
Representative Hudson questioned what would happen to
communities like Cordova. Representative Lancaster explained
that Cordova is included in the debt reimbursement bond,
which would not require a vote.
Representative Lancaster MOVED to ADOPT Amendment 1. There
being NO OBJECTION, it was so ordered.
HB 175 was heard and HELD in Committee for further
consideration.
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