04/05/2024 01:00 PM House RESOURCES

            HB 388-COOK INLET RESERVE-BASED LENDING                                                                         
                                                                                                                                
4:20:35 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY  announced that the  next order of business  would be                                                               
HOUSE BILL NO.  388, "An Act relating to state  loans for oil and                                                               
gas projects  in the  Cook Inlet  sedimentary basin;  relating to                                                               
the Alaska  Energy Authority; relating  to the  Alaska Industrial                                                               
Development and Export Authority;  and providing for an effective                                                               
date."   [Before the  committee, adopted on  4/3/24 as  a working                                                               
document, was the  proposed committee substitute (CS)  for HB 388                                                               
Version 33-LS1237\R, Nauman, 3/30/24, ("Version R").]                                                                           
                                                                                                                                
4:21:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE moved  to  adopt Amendment  1  to HB  388,                                                               
Version R,  labeled 33-LS1237\R.1, Nauman, 4/4/24,  which read as                                                               
follows:                                                                                                                        
                                                                                                                                
     Page 1, line 2. following "to":                                                                                          
          Insert "the creation of subsidiaries by"                                                                            
                                                                                                                                
4:21:13 PM                                                                                                                    
                                                                                                                                
CHAIR MCKAY objected for the purpose of discussion.                                                                             
                                                                                                                                
4:21:18 PM                                                                                                                    
                                                                                                                                
TREVOR  JEPSEN, Staff,  Representative  Tom  McKay, Alaska  State                                                               
Legislature,  on  behalf  of the  sponsor,  the  House  Resources                                                               
Standing  Committee,  of  which Representative  McKay  served  as                                                               
chair, expressed  the opinion that  the language in  the proposed                                                               
legislation is too broad, and Amendment 1 would tighten this up.                                                                
                                                                                                                                
4:21:53 PM                                                                                                                    
                                                                                                                                
CHAIR  MCKAY  removed his  objection.    There being  no  further                                                               
objection, Amendment 1 was adopted.                                                                                             
                                                                                                                                
4:22:41 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 4:22 p.m. to 4:23 p.m.                                                                       
                                                                                                                                
4:23:10 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MCCABE  moved to  report  CSHB  388, Version  33-                                                               
LS1237\R,  Nauman, 3/30/24,  as  amended, out  of committee  with                                                               
individual  recommendations,   accompanying  fiscal   notes,  and                                                               
authority for  Legislative Legal  Services to make  technical and                                                               
conforming changes.                                                                                                             
                                                                                                                                
4:23:37 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  MEARS objected  for  the  purpose of  discussion.                                                               
She  expressed  support  for Alaska  Industrial  Development  and                                                               
Export   Authority  (AIDEA)   to  provide   loans  for   economic                                                               
development within the state, along  with natural gas development                                                               
in  Cook Inlet;  however, given  the  other scope  of AIDEA,  she                                                               
argued  that the  case has  not been  made for  why the  proposed                                                               
legislation would  be necessary.  She  expressed uncertainty that                                                               
the proposed legislation would provide  advantages to the program                                                               
already in existence.                                                                                                           
                                                                                                                                
REPRESENTATIVE MEARS removed her objection.                                                                                     
                                                                                                                                
4:24:32 PM                                                                                                                    
                                                                                                                                
MR.  JEPSEN  stated  that  currently  statute  does  not  address                                                               
reporting requirements.   He expressed the opinion  that AIDEA is                                                               
actively looking  at potential projects  in Cook Inlet,  and this                                                               
is an  important portion of  the proposed legislation.   He added                                                               
that  AIDEA also  would be  allowed to  set interest  rates below                                                               
market  value,  which  would  reinforce  that  the  projects  are                                                               
necessary for the state.                                                                                                        
                                                                                                                                
4:25:39 PM                                                                                                                    
                                                                                                                                
BRANDON   BREFCZYNSKI,   Deputy   Director,   Alaska   Industrial                                                               
Development and  Export Authority,  answered the question  of why                                                               
the proposed legislation is necessary.   He stated that AIDEA has                                                               
the ability to  finance projects in Cook Inlet,  but the proposed                                                               
legislation  would  add  another tool,  giving  AIDEA  additional                                                               
options  if  the  legislature  were to  appropriate  funds.    He                                                               
pointed out  that AIDEA would  be able  to issue loans  below the                                                               
normal  rate.   He  noted  that  AIDEA  supports the  piece  that                                                               
creates subsidiaries,  as currently AIDEA does  not have accounts                                                               
to do this.                                                                                                                     
                                                                                                                                
4:27:16 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER pointed out  that in reference to reserve-                                                               
based lending, the state has borrowed  money in the past based on                                                               
the oil  in the ground  after it was  discovered.  He  added that                                                               
this would  not be an appropriation,  but "an empty bucket."   He                                                               
said, "We may not need it, but we may be glad we have it."                                                                      
                                                                                                                                
4:28:17 PM                                                                                                                    
                                                                                                                                
CHAIR  MCKAY announced  that there  being  no further  objection,                                                               
CSHB 388(RES)  was reported out  of the House  Resources Standing                                                               
Committee.