04/27/2021 09:00 AM House FINANCE

HOUSE BILL NO. 92                                                                                                             
                                                                                                                                
     "An  Act  relating  to  borrowing  in  anticipation  of                                                                    
     revenues;  relating  to   revenue  anticipation  notes;                                                                    
     relating to  line of  credit agreements;  and providing                                                                    
     for an effective date."                                                                                                    
                                                                                                                                
11:16:15 AM                                                                                                                   
                                                                                                                                
Representative  LeBon  MOVED  to   ADOPT  Amendment  2,  32-                                                                    
GH1707\A.3 (Wallace, 4/23/21) (copy on file):                                                                                   
                                                                                                                                
     Page 3, following line 5:                                                                                                  
     Insert a new bill section to read:                                                                                         
     "*Sec.  7. AS  43.08.050  is amended  by  adding a  new                                                                    
     subsection to read:                                                                                                        
     (b) Within 30  days after an agreement  to borrow money                                                                    
     is executed under this  chapter, the commissioner shall                                                                    
     notify the Legislative Budget  and Audit Committee that                                                                    
     an agreement has been entered into and include                                                                             
          (1) the financial terms of the agreement; and                                                                         
          (2) an explanation for the determination that the                                                                     
          agreement was in the best financial interests of                                                                      
          the state."                                                                                                           
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
Representative Rasmussen OBJECTED for discussion.                                                                               
                                                                                                                                
Representative LeBon  explained the amendment  would require                                                                    
the Department  of Revenue (DOR)  report to  the Legislative                                                                    
Budget and Audit Committee on  the details of any agreements                                                                    
entered into related  to current asset financing,  a line of                                                                    
credit,  working  capital  loans  or  whatever  process  may                                                                    
follow.  He  explained  that the  notification  would  occur                                                                    
within  30  days  of  the  execution  of  an  agreement.  He                                                                    
detailed that  the report  should include  a summary  of the                                                                    
financial terms of the agreement  and an explanation for the                                                                    
determination  the  agreement  was  in  the  best  financial                                                                    
interest of the state.                                                                                                          
                                                                                                                                
11:17:32 AM                                                                                                                   
                                                                                                                                
Co-Chair  Merrick clarified  the  amendment  number was  32-                                                                    
GH1707\A.3.                                                                                                                     
                                                                                                                                
Representative Rasmussen WITHDREW her OBJECTION.                                                                                
                                                                                                                                
There being NO further OBJECTION, Amendment 2 was ADOPTED.                                                                      
                                                                                                                                
11:18:07 AM                                                                                                                   
                                                                                                                                
Representative   LeBon   MOVED   to   ADOPT   Amendment   1,                                                                    
32-GH1707\A.2 (Wallace, 4/22/21) (copy on file):                                                                                
                                                                                                                                
     Page 1, line 2:                                                                                                            
     Delete "line of credit agreements"                                                                                         
     Insert "short-term borrowing"                                                                                              
                                                                                                                                
     Page 1, line 12:                                                                                                           
     Delete "line of credit agreements"                                                                                         
     Insert "other forms of short-term borrowing"                                                                               
                                                                                                                                
Representative Rasmussen OBJECTED for discussion.                                                                               
                                                                                                                                
Representative  LeBon explained  that the  amendment cleaned                                                                    
up bill  language. He detailed  that page  1, line 2  of the                                                                    
amendment   would  delete   the  phrase   "line  of   credit                                                                    
agreements"  and insert  the phrase  "short-term borrowing."                                                                    
Additionally, page 1, line 12  would delete the phrase "line                                                                    
of credit agreements" and insert  the phrase "other forms of                                                                    
short-term borrowing."  He stated  the reason for  the clean                                                                    
up was the  legislature did not know  precisely what pathway                                                                    
the DOR would follow  to secure short-term financing options                                                                    
such  as  lines  of  credit or  other  short-term  borrowing                                                                    
agreements.                                                                                                                     
                                                                                                                                
Co-Chair  Merrick clarified  the  amendment  number was  32-                                                                    
GH1707\A.2.                                                                                                                     
                                                                                                                                
Representative  Rasmussen asked  for  verification that  the                                                                    
other  forms of  short-term  borrowing  would encompass  the                                                                    
line of credit agreements.                                                                                                      
                                                                                                                                
Representative   LeBon  replied   in  the   affirmative.  He                                                                    
explained  that  the  amendment broadened  the  options.  He                                                                    
detailed there were  a variety of municipal  market and bank                                                                    
options  for   short-term  borrowing   with  a   variety  of                                                                    
flexibility,  interest   rates,  and   the  ease   in  which                                                                    
temporary  financing was  secured  for  the state's  working                                                                    
capital needs. The  language change was to give  DOR as much                                                                    
flexibility as possible to achieve its goal.                                                                                    
                                                                                                                                
Representative  Rasmussen asked  for verification  that line                                                                    
of  credit agreements  would be  included under  one of  the                                                                    
other forms of short-term borrowing.                                                                                            
                                                                                                                                
Representative LeBon  replied affirmatively.  He interpreted                                                                    
the  phrase  short-term  borrowing  to be  broad  enough  to                                                                    
include a line of credit agreement.                                                                                             
                                                                                                                                
Representative Rasmussen WITHDREW her OBJECTION.                                                                                
                                                                                                                                
There being NO further OBJECTION, Amendment 1 was ADOPTED.                                                                      
                                                                                                                                
11:20:50 AM                                                                                                                   
                                                                                                                                
Representative Rasmussen appreciated  the amendments to make                                                                    
the legislation a bit stronger.  She thought the bill was an                                                                    
important  tool to  give  DOR  to enable  it  to manage  the                                                                    
financial interests of the state in the best way possible.                                                                      
                                                                                                                                
Co-Chair  Foster  MOVED  to  REPORT   CSHB  92(FIN)  out  of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal note.                                                                                                       
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
CSHB 92(FIN) was REPORTED out  of committee with a "do pass"                                                                    
recommendation and  with one  new indeterminate  fiscal note                                                                    
from the Department of Revenue.                                                                                                 
                                                                                                                                
11:21:36 AM                                                                                                                   
AT EASE                                                                                                                         
                                                                                                                                
11:24:47 AM                                                                                                                   
RECONVENED