Legislature(2013 - 2014)SENATE FINANCE 532
03/27/2014 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB266 || HB267 | |
| SB195 | |
| SB140 | |
| SB166 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 140 | TELECONFERENCED | |
| + | SB 166 | TELECONFERENCED | |
| + | HB 199 | TELECONFERENCED | |
| += | HB 266 | TELECONFERENCED | |
| += | HB 267 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| = | SB 195 | ||
SENATE BILL NO. 140
"An Act creating the Arctic infrastructure development
program and fund in the Alaska Industrial Development
and Export Authority."
10:30:53 AM
SENATOR LESIL MCGUIRE, introduced SB 140 and related that
the bill was a result of work that had been done by the
Alaska Arctic Policy Commission. She relayed some
background on the make-up and duties of the commission. She
shared that over the course of one year the commission had
compiled a preliminary report, which could be found at
akarctic.com. The bill would develop and contrive a funding
and implementation mechanism for constructing and
maintaining Arctic infrastructure and economic development.
She asserted that the Alaskan Arctic was one of the least
developed areas of the state, yet one of the most open and
ready for opportunity. The intent of the legislation was to
develop the vision statements, policy statement and
strategic recommendations of the Alaska Arctic Policy
Commission. She contended that Arctic policy was part of a
global discussion and that the state was behind the other
seven Arctic Nations when it came to infrastructure
development. She relayed that Alaska has the longest
coastline in the United States; Alaska's Arctic coastline
extends from the Northeastern Canadian border, west across
the Arctic Ocean, and south covering western Alaska, then
1500 miles down to the Aleutian Chain. She stated that
within the entire coastline the only deep draft port was in
Dutch Harbor. She lamented that the lack of infrastructure
in Unalaska limited any support for new traffic coming from
the Northwest Passage. She added that telecommunications,
emergency and spill response, search and rescue, national
defense and other critical needs were all addressed within
the legislation.
Senator McGuire proclaimed that Alaska was blessed with
untold natural resource wealth in the Arctic that would
provide opportunity for future generations, but nothing
could be done without sufficient infrastructure. She shared
that there was an estimated $100 billion in private funding
that was waiting to be invested in the Arctic, which was
considered to be one of the last great economic global
opportunities.
10:38:07 AM
Senator McGuire provided a further sponsor statement:
Globally, all eyes are on the Arctic. The World
Economic Forum has recently identified Arctic
Infrastructure development as one of the top Four (4)
challenges facing the regions. Alaska's future is in
the Arctic, and in order for Alaskans to capitalize on
the incredible opportunities and overcome the
significant challenges that this region presents, we
must begin to build infrastructure now.
Aside from a few areas in Norway and the Russian
Federation the Arctic as a whole remains vastly
underserved by transportation, ports, communication,
emergency response, defense and other critical
infrastructure. For further development to occur,
which Alaskans deserve, both public and private
interests must come together to boost the investment
in the Arctic.
For these reasons I have introduced Senate Bill 140,
Arctic Infrastructure Development Fund ("AIDF"). The
CS SB 140 (L&C) expands AIDEA's tool bag by extending
the same authority for loans, loan guarantees, bonds
and bond guarantees that it currently utilizes in the
energy sector via the SETS fund (AS 44.88.650- 690) in
order to develop Infrastructure in the Arctic. AIDEA
used SETS to facilitate the financing of the Interior
Energy Project. This tool helps to create the public-
private partnerships that are needed to encourage
large investment in capital intensive infrastructure.
CS SB 140 (L&C) extends AIDEA's existing power to
finance, or facilitate the financing of projects to
the realm of Arctic Infrastructure by granting the
Authority the ability to:
1. Insure project obligations and guarantee loans or
bonds for projects.
2. Defer principle payments and capitalize interest.
3. Offer financing terms of up to 40 years.
4. Enter into lease agreements, sales-lease-back
agreements, build-operate-transfer agreements and
other agreements to finance Arctic infrastructure
projects.
5. Finance certain aspects of Fisheries in the Arctic.
Many of these powers already provide flexible terms
that can reduce the ultimate cost of energy (via the
SETS program) to consumers, and if it can work in the
energy realm, it can work for infrastructure. However,
CSSB 140 (L&C) also requires legislative approval for
investments that are more than one-third of a
project's capital costs or if a loan guarantee exceeds
$20 Million. By subjecting certain investments to
legislative approval, CSSB 140 (L&C) maintains an
appropriate level of due diligence for projects.
By making financing available we can empower
communities and attract a global pool of investment
that is an alternative to the traditional grant model
that too often underfunds projects and leads to
delays. Relying on credit also ensures that sponsors
have some skin in the game and a stake in the
project's success. Most importantly, we expand the
arena of where Alaskan assets are working in order to
grow our own economy. Currently, many of Alaska's
savings accounts are invested in stocks and bonds that
drive economic activity outside of Alaska. CSSB
140(L&C) suggests instead that some of those savings
be invested here in Alaska through AIDEA, not as blank
checks for development, but as investments for our
future in Arctic Infrastructure.
For the purposes of this Act, I propose that this
program and fund focus infrastructure development in
the geographical definition of the Arctic as laid out
in Arctic Research and Policy Act (amended 1990). That
definition includes the area of the State of Alaska
north of the Arctic Circle, north and west of the
boundary formed by the Porcupine, Yukon, and Kuskokwim
Rivers, all contiguous seas, including the Arctic
Ocean, and the Beaufort, Bering, and Chukchi Seas, and
the Aleutian chain.
With AIDF I am proposing that the State expand AIDEA's
existing authority to finance, or facilitate the
financing of, Arctic Infrastructure.
10:43:01 AM
Senator McGuire asserted that it would be irresponsible to
ignore the obligation of the state to develop
infrastructure in the Arctic.
10:43:41 AM
Co-Chair Meyer requested that the sponsor list any
sideboards that had been written into the bill.
10:44:02 AM
JESSE LOGAN, STAFF, SENATOR LESIL MCGUIRE, offered a
sectional analysis (copy on file):
Section 1. AS 44.88.088(a) is amended
o This section establishes that the Alaska
Industrial Development and Export Authority
(AIDEA) shall adopt a policy for payment of a
dividend from the Arctic infrastructure
development fund (AS 44.88.810) to the state each
fiscal year.
o The dividend may not be less than 25% nor more
than 50% of the net income of the fund.
o This puts the AIDF in-line with AIDEA's
sustainable energy transmission and supply
development fund (SETS) (AS 44.88.660).
Section 2. AS 44.88.088(b)(2) is amended
o This section defines "net income" for the
purposes of this chapter.
o The definition now includes the AIDF.
Section 3. AS 44.88.088(b)(3) is amended