Legislature(2017 - 2018)SENATE FINANCE 532
05/08/2018 09:30 AM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB212 | |
| HB331 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 331 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 212 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
May 8, 2018
9:35 a.m.
9:35:09 AM
CALL TO ORDER
Co-Chair MacKinnon called the Senate Finance Committee
meeting to order at 9:40 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Anna MacKinnon, Co-Chair
Senator Click Bishop, Vice-Chair
Senator Peter Micciche
Senator Donny Olson
Senator Gary Stevens
Senator Natasha von Imhof
MEMBERS ABSENT
None
ALSO PRESENT
Tim Mearig, Facilities Manager, Department of Education and
Early Development; Representative Neal Foster, Sponsor;
Sheldon Fisher, Commissioner, Department of Revenue; Ken
Alper, Director, Tax Division, Department of Revenue; Deven
Mitchell, Executive Director, Alaska Municipal Bond Bank
Authority, Department of Revenue.
PRESENT VIA TELECONFERENCE
Douglas Goe, State Bond Council, Public Finance Department,
Orrick; Peter Clinton, ING Capital, New York City; Rebecca
Logan, The Alaska Support Industry Alliance, Anchorage;
Kara Moriarty, Alaska Oil and Gas Association, Anchorage.
SUMMARY
CSHB 212(RLS)
REAA & SMALL MUNI SCHOOL DISTRICT FUND
SCS CSHB 212(FIN) was REPORTED out of committee
with a "do pass" recommendation and with one new
fiscal impact note from the Department of
Education and Early Development.
CSHB 331(FIN)
TAX CREDIT CERT. BOND CORP; ROYALTIES
CSHB 331(FIN) was HEARD and HELD in committee for
further consideration.
CS FOR HOUSE BILL NO. 212(RLS)
"An Act relating to funding for school construction
and major maintenance; relating to the regional
educational attendance area and small municipal school
district fund; and providing for an effective date."
9:36:01 AM
Co-Chair MacKinnon read the title of the bill.
9:36:15 AM
AT EASE
9:36:40 AM
RECONVENED
Vice-Chair Bishop MOVED to ADOPT proposed committee
substitute for CSHB 212(FIN), Work Draft 30-LS0741\E
(Laffen, 5/7/18). There being NO OBJECTION, it was so
ordered.
Co-Chair MacKinnon noted that the Committee Substitute (CS)
included an amendment that had been proposed the previous
day.
Co-Chair MacKinnon directed attention to a new fiscal note
from the Department of Education and Early Development, OMB
Component 2737. The fiscal note showed an appropriation of
$323,000 in FY 19; $24,000 in FY 20; and $15,000 in FY 21
through FY 24. The fiscal note was in response to the
addition of standardization of energy components that were
discussed the previous day.
TIM MEARIG, FACILITIES MANAGER, DEPARTMENT OF EDUCATION AND
EARLY DEVELOPMENT, stated that the fiscal note identified
elements in the bill that had been worked on by the Bond
Reimbursement and Grant Review Committee and a report to
the legislature dated December 2017. He directed attention
to Section 4 of the bill, which reflected the cost for the
need for expertise for analysis and consulting pertaining
to energy and standards systems research. The cost totaled
$295,015; $1000 of which was an annual update.
Mr. Mearig continued, and noted that Sections 1 through 3
had costs associated with the implementation of elements
related to the re-use of school design. There would be
regulations associated with the model school standard. He
stated that travel costs for the review committee were
anticipated for two meetings in the first two years and
included in the fiscal note.
Vice-Chair Bishop commented that there could be cost
savings through inquiring about the University of Alaska
Fairbanks housing.
9:40:55 AM
REPRESENTATIVE NEAL FOSTER, SPONSOR, indicated he was
supportive of the changes to the bill. He reflected that
the changes would add major maintenance to the Regional
Educational Attendance Area School Construction Fund, in
addition to new school construction. He thought the bill
was a good way to keep costs down through preventative
maintenance.
Senator Micciche reflected on the potential savings from
the bill, and thought it was a worthwhile investment, and
would hopefully be a model for school construction in the
future.
Vice-Chair Bishop MOVED to report SCS CSHB 212(FIN) out of
Committee with individual recommendations and the
accompanying fiscal note. There being NO OBJECTION, it was
so ordered.
SCS CSHB 212(FIN) was REPORTED out of committee with a "do
pass" recommendation and with one new fiscal impact note
from the Department of Education and Early Development.
9:42:45 AM
AT EASE
9:46:12 AM
RECONVENED
CS FOR HOUSE BILL NO. 331(FIN)
"An Act establishing the Alaska Tax Credit Certificate
Bond Corporation; relating to the issuance of bonds by
the Alaska Tax Credit Certificate Bond Corporation;
relating to purchases of tax credit certificates and
refunds and payments of tax credits; relating to the
oil and gas tax credit fund; relating to overriding
royalty interest agreements; providing for an
effective date by repealing the effective date of
secs. 2, 5, 8, 10, 31, 37, and 40, ch. 3, SSSLA 2017;
and providing for an effective date."
9:46:12 AM
Co-Chair MacKinnon directed attention to the bill.
SHELDON FISHER, COMMISSIONER, DEPARTMENT OF REVENUE, stated
he would present HB 331 and provide context. He mentioned
the companion bill that had been introduced by the
governor. He discussed the presentation "State of Alaska
Department of Revenue - HB331: Oil & Gas Tax Credit Bonds,"
(copy on file).
Commissioner Fisher showed slide 2, "Bill Objective #1:
Critical component to Governor's economic stimulus
package":
From 2015 2017, private sector jobs are down ~3.8%
(9,200 jobs.)
? Oil and Gas industry jobs are down ~30.8%
? For 2018, ISER forecasts year over year losses of an
additional 0.7%
This bill will both provide an initial boost of
funding and resolve the uncertainty surrounding these
payments.
? Provide $700 million or more economic stimulus in
2018 to the oil and gas sector
? Resolve the uncertainty hanging over this sector and
allow small producers to plan
? Seeks to unfreeze Alaska credit markets
? Seeks to incentivize new spending in Alaska
? This could mean substantial numbers of new jobs
9:49:17 AM
Commissioner Fisher turned to slide 3, "Bill is Structured
to Balance Competing Interests":
The Balance:
? The Credit holders to pay for the cost of the
borrowing
? Provides Small Producers certainty and cash they
need to invest
? Maintains the state's credibility by acknowledging
our part in creating this situation
State Fiscal Budget
?Forecasted FY 19 deficit of ~$300M after PF Draw
?Deficit increases $155M without this program
Maintain State Credibility Support Small Producers
The state encouraged investment based on promises of
support
Support Small Producers
Strategic interest in maintaining small producers
?Bank lending has essentially stopped
Commissioner Fisher noted that the credit program was
initiated in part by the legislature, in part to attract
smaller producers to the state to increase production and
competition. The slide also showed an excerpt of a
promotional brochure used by DOR at oil industry
conferences.
9:51:11 AM
Commissioner Fisher reviewed slide 4, "Oil & Gas Tax Credit
Background":
2003: First oil & gas tax credits created to
incentivize new exploration.
Credits could only offset the company's taxes
2006: Transferable tax credits introduced with
transition to profits-based tax
New credits for capital expenditures and operating
losses expanded incentives to include small field
developers
State repurchases authorized, with caps and limits
2007: Oil & Gas Tax Credit Fund established, with
statutory formula tied to production tax revenue.
Annual per-company caps eliminated
2010: Cook Inlet Recovery Act incentivized new
production to offset gas shortages in Southcentral.
New incentive tied to drilling costs
Because of minimal Cook Inlet taxes, credits were not
expected to be supported by new revenues
2013: SB 21 eliminated capital credit on North Slope,
replaced with per-barrel credit tied to price and
production
2016-17 HB247 and HB111 wind down cashable credit
programs
Commissioner Fisher summarized that the repurchase being
contemplated was based on addressing historical credits
that had been earned prior to 2017. He thought there was a
general consensus that the state owed the amounts, and the
bill was an intent to address the matter in a comprehensive
way that was beneficial to all parties.
9:52:24 AM
Commissioner Fisher showed slide 5, "Oil & Gas Tax Credit
Background":
Oil & Gas Tax Credits Have Helped Heat Alaskans' Homes
? Incentivized Hilcorp to take over aging Cook
Inlet assets and extend field life
? Brought new companies into Alaska, (Bluecrest,
Furie, etc.) to look for gas
? Southcentral gas supply shortage essentially
solved
? Threat of brown-outs gone
? Protected energy security of tens of thousands
of Alaskans
Oil & Gas Tax Credits Have Created Potential for More
Production
? New fields potentially mean new oil: Pikka,
Nuna
? Governor's economic stimulus goal
o More revenue from production equals
o New jobs, new royalties, new revenues for
schools and government services
o Economic ripple effect
9:53:20 AM
Commissioner Fisher discussed slide 6, "Oil & Gas Tax
Credit Background: The Challenge":
? Historically (FY08-15), the State paid tax credits
annually as presented
o FY16-FY18 state unable to pay all pending tax
credits
o FY2016 veto set total payment at $500 million
o FY2017-18 appropriations at statutory
calculation ($30 million & $77 million)
? The O&G Tax Credit Fund statute (AS 43.55.028) sets
out a formula for computing the appropriation to the
fund for cash payment of tax credits
o The formula is based on a percentage of the
profits tax calculation (AS 43.55.011) before
application of credits, based on the projected
oil price for the coming year
? At a projected price of $60 or higher, the statutory
formula is
10% of the tax calculation
? At a projected price of less than $60, the statutory
formula is
15% of the tax calculation
o Most recent FY19 forecast, per the Spring RSB
Update, is $63/bbl
Commissioner Fisher mentioned the nuance that the statutory
formula had a hinge at $60/bbl oil price. If the projected
price was above, //
9:55:11 AM
Commissioner Fisher displayed slide 7, "Oil & Gas Tax
Credit Background: The Challenge":
Annual statutory appropriation schedule per Spring forecast
Estimated Statutory
Payment ($mm)
FY19 FY20 FY21 FY22 FY23 FY24
$184 $168 $168 $167 $170 $89*
(note: based on credits held to-date, all will be paid by
FY2023; *final forecasted credits in FY2024)
? Impact of reducing payments to the Statutory Formula
o Exploration and development in some cases halted
o Some banks have frozen supply of further credit for
Alaska oil and gas exploration
? Reduction below this figure without passage of a
replacement program such as in this bill could further
depress development
9:57:05 AM
Commissioner Fisher reviewed slide 8, "Proposed Solution:
Issue Bonds and use proceeds to pay off Tax Credits -
Credit holders cover the cost of borrowing by accepting a
discount on credits":
Example: Assume Credit holder has $100M in Credits:
$50 million issued in 2016 + $50 million issued in
2017
Program offers two alternative discount rates
5.1% represents the State's cost of borrowing
? Estimated 3.6% Total Interest Cost +1.5%
? 10% is mid-point between State's cost of borrowing
and the credit holder's
Weighted Average Cost of Capital (WACC)
10% is the Base Rate. To qualify for the lower rate,
the Credit Holder must:
? Agree to an Overriding Royalty Interest (ORRI)
? Commit to reinvest the money in Alaska within 24
months
? Agree to early waiver of confidential seismic data,
or
? Have Refinery or Gas Storage Credits
The Discount is applied to each year of payments
starting in Year 2
Co-Chair MacKinnon handed the gavel to Co-Chair Hoffman.
10:00:26 AM
Senator von Imhof asked if the four bullet points on slide
8 were an "or" scenario rather than an "and" scenario.
Commissioner Fisher confirmed that the bullets were
alternatives.
Senator von Imhof asked if the Commissioner Fisher had a
chance to discuss //
Department of Revenue considered that the department had
worked through the mechanics to address // He thought that
the majority //
10:02:00 AM
Commissioner Fisher showed slide 9, "Proposed Solution:
Issue Bonds and use proceeds to pay off Tax Credits -
Credit holders cover the cost of borrowing by accepting a
discount on credits":
COMPANY X Tax Credits: Potential Impact of HB331/SB176
REVISED April 2018 - appropriation schedule per Spring
forecast
Total certificates in "2016" basket $50,000,000
Total certificates in "2017" basket $50,000,000
Total conditional 2017 certificates $0
Total $100,000,000
At the forecasted oil price and resulting statutory
formula, this theoretical company would expect to
receive all their credit payments over five years.
Participating in the bond program would cost them
between 8.5% and 15.2% of face value.
The slide also showed a table entitled 'Anticipated
Prorated Payments and Estimated Discounted Value.'
Commissioner Fisher explained that slide 9 had showed a
fictitious company that // He drew attention to //
Commissioner Fisher noted that the greater amount of time
//
Co-Chair Hoffman handed the gavel back to Co-Chair
MacKinnon.
10:05:40 AM
Senator von Imhof thought slide 9 was helpful. She asked
about cash flow, and asked if the bill offered credit
holders a lump sum. //
Commissioner Fisher stated that the way the bill was
structured, it was an option to have a lump sum. He had
communicated a fair amount with credit-holders over the
previous 90 days, and had highlighted the options as well
as a personalized estimates of what the // He relayed that
no credit-holders had expressed an interest in not
participating in the proposed program.
Commissioner Fisher continued addressing Senator von
Imhof's question. He pondered the question of how much the
state should be appropriating. He believed the department
had aggressively asked companies, and ///
10:08:21 AM
Senator von Imhof asked if it was an option to take a lump
sum or payments over time. She wondered if the bonds were
sold //
Commissioner Fisher stated that subsequent slides and Mr.
Alper would delve in to the matter further. He explained
that the passage of the bill would result in the department
//
KEN ALPER, DIRECTOR, TAX DIVISION, DEPARTMENT OF REVENUE,
looked at the column on the left of slide 9, which was //
He informed that //
10:10:05 AM
Senator Micciche considered that the tax credit liability
was a zero-interest debt, and the bill would allow for //
He checked for understanding.
Commissioner Fisher thought the description was fair, but
stated that the cash-back would cover interest in the
future. He stated that the bill was not designed to benefit
the state monetarily, but did not // The program was
designed to keep the state control and allow companies to
//
Senator Micciche thought that the program provided pay-back
to companies at a lower rate than could be borrowed, and //
He wanted to clarify that the discount covered the
interest, and also //
Commissioner Fisher concurred.
10:12:36 AM
Commissioner Fisher showed slide 10, "What the Bill Does":
Five Essential Parts of HB331:
1. Creates the Alaska Tax Credit Certificate Bond
Corporation, with various powers and authorities
defined
2. Amends existing provisions of the tax credit fund,
AS 43.55.028, to conform the existing program with the
new bonding alternative
3. Creates new subsections in AS 43.55.028 to
establish the process for offering, valuing,
discounting, and purchasing credit certificates
4. Authorizes the Department of Natural Resources to
negotiate overriding royalty interests (ORRIs) as a
mechanism to obtain a reduced discount rate
5. Repeals the delayed sunset of the tax credit fund
itself, so as to avoid complex conforming language in
the future. This does not change the elimination of
new cashable tax credits
Commissioner Fisher stated that slide 10 was intended to be
a concise bill analysis.
Mr. Alper stated that the slide was intended to be a
sectional analysis for the bill. // He used the example of
a // The bond payments were exempted //
Mr. Alper continued his remarks on slide
10:15:17 AM
Vice-Chair Bishop could not find a timeline // He wondered
//
Mr. Alper stated that the negotiation was not explicit in
the bill, and it was expected that //
Senator Micciche thought the different deals could be
negotiated //
Mr. Alper answered in the affirmative, and added that DOR
would be expected to calculate a risk factor //
Mr. Alper continued to address slide 10, and //
10:17:52 AM
Senator Micciche asked to go back to slide 9, and observed
the credits // He asked if there was value assumed to the
state //
Mr. Alper thought it was important that to the extent that
credits were sold to major producers, // The state would
continue to // The program would put a floor under the
value. A company distress //
Senator Micciche pointed out that the value to the state
was likely //
Commissioner Fisher agreed with Senator Micciche's
suggestion. He stated that one of the features of the bill
was that a credit-holder had to // There were a number of
features //
10:20:22 AM
Commissioner Fisher addressed slide 11, "Proposed Solution:
Issue Bonds and use proceeds to pay off Tax Credits -
Credit holders cover the cost of borrowing by accepting a
discount on credits":
?Step 1: Secure commitment from Credit Holders to
participate in Program.
? Provide definitive statement of proceeds available
under the program.
? Interested credit holders make irrevocable
commitment.
?Step 2: Issue Bonds
? First issuance (for existing certificates):
o Face Value: $807mm (for the purposes of this
analysis, we are assuming no credits will be sold to
major producers to offset taxes)
o Bond Issuance: $683mm-$738mm, could be issued as
soon as August 2018
? Future issuances, for anticipated certificates
o Face Value: $130-180mm (est.), issued in August
2019-August 2021
10:21:30 AM
Commissioner Fisher spoke to slide 12, "Proposed Solution:
Issue Bonds and use proceeds to pay off Tax Credits -
Credit holders cover the cost of borrowing by accepting a
discount on credits":
Step 3: Purchase Tax Certificates at Fair Discount
Rate
Two options: 10% discount rate or discount rate equal
to state cost of capital
(approx. 5.1%)
? Option 1: 10% rate no strings attached
o Balances State's and credit holders' interests
o Greater than State's cost of capital, less than tax
credit holders' cost of capital
o Covers State's costs of financing
? Option 2: 5.1% rate (approx.State's cost of
capital) strings attached
o Tax credit holder can get lower discount rate (less
discount from face value) in exchange for any one of
four options:
1. Overriding royalty of equivalent value
2. Investment commitment of equivalent value within 24
months
3. Waiver of seismic data confidentiality waiver, or
4. Refinery / gas storage credit
10:21:43 AM
Commissioner Fisher addressed slide 13, "Proposed Solution:
Issue Bonds and use proceeds to pay off Tax Credits -
Credit holders cover the cost of borrowing by accepting a
discount on credits":
Step 4: Discount Covers State's Bonding Costs
Bond terms are not described in bill, but current our
thinking is:
? 10 year term for each bond issue
? All-in Cost of Funds (estimated) is 3.6%
? Back-loaded debt service to match projected profile
of state revenues
? For initial bond issue, years 1-2 interest only;
years 3-5 year increasing debt service; years 6-10
flat payment to fully pay off debt
? For subsequent bond issues, years 1-9 interest only
with balloon payment in year 10. These will be
comparably smaller issues
? Objective with each purchase option is cost
equivalency:
Present Value (PV) of total debt service will be equal
to or less than PV of appropriations under the
statutory payment formula
Commissioner Fisher stated that the terms on the bottom of
the slide were not defined in the bill, but //
10:22:34 AM
Commissioner Fisher spoke to slide 14, "Major Changes Made
in the House":
? 45-day time limit for constitutional challenges to
the bond program
? Reduce calculation of future appropriations to the
tax credit fund, and expectation of future payments,
to companies who do not participate in the bond
program
? Additional conditions and information related to the
"reinvestment" provision as a mechanism to obtain the
lower discount rate
? Maximize Alaska hire and use of Alaska
contractors
? Move project towards production
?"Clawback" of incremental payment if investment
targets not met
? Repeal of delayed sunset of "028" fund and
conforming changes, which was by HB111 set to repeal
after the last credit is paid
? Stylistic rewrite due to first CS of governor's bill
(LAW to Leg Legal)
Commissioner Fisher //
Mr. Alper added that the intent of the //
10:26:45 AM
Commissioner Fisher presented slide 15, "Benefits of
Program: Move cost into periods where state revenues match
cash flow," which showed a table entitled 'State of Alaska
Debt Service as a Percentage of Unrestricted General Fund
Revenues.' He drew attention to // He pointed out the total
payment was $946 million. The total payment under the bill
would be a little over $1 billion, including //
Co-Chair MacKinnon referenced the // She observed that the
// She asked if the commissioner had run similar models //
Commissioner Fisher stated that the department had
considered a series of alternatives that it could show the
committee. He //
10:29:29 AM
Commissioner Fisher thought one of the benefits of the bill
was four or so years with moderate payments, during which
the state could work on the state's fiscal challenges. He
thought the // The bill also shifted payments into years
when there was an expectation of greater production. He
thought it was a greater like //
Co-Chair MacKinnon appreciated the commissioner's
explanation of timing of the payments. She noted that there
would also be a spike int eh actuarial //
10:30:56 AM
Senator von Imhof expressed concern that the 10-year
amortization seemed long. She thought that there was merit
to the // She thought paying more up front was more
fiscally prudent. SHe considered that shortening the term
by two or three years would //
Mr. Alper clarified that the structure of the bonds were
not hard-coded in the bill, but rather were structured //
He reminded that there needed to be control of the //
Vice-Chair Bishop stated that there was nothing in the bill
that prevents //
10:32:42 AM
Senator Micciche asked if the assumptions on slide //
Commissioner Fisher turned to slide 15, and stated that //
Mr. Alper noted that slide 15 [NOT SURE WHERE THESE 3 LINES
GO, THEY GOT MOVED INADVERTANTLY!:( ]
Commissioner Fisher jumped to slide 17, "Impact on debt
capacity and credit rating," which showed a table that
depicted debt capacity. He drew attention to the far left
// He referenced Co-Chair MacKinnon's comments on PERS and
TRS. He noted that all of the figures //
Commissioner Fisher continued to address slide 17, noting
that // Under the structure of the bill, there // He
emphasized that he would be amendable to changing the
structure of the bill depending upon the wishes of the
legislature. He asserted that the structure flattened the
obligation of the state, which was part of the logic behind
the structure of the bill. He would be pleased to receive
guidance from the legislature.
10:35:35 AM
Co-Chair MacKinnon observed that //
Vice-Chair Bishop thought the //
Co-Chair MacKinnon informed that CCS // with a POMV draw
had just passed from Conference Committee. She thought that
it would be nice to see the slide //
Co-Chair MacKinnon //
10:37:05 AM
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE, stated that the
policy of the Alaska Municipal Bond Bank Authority was that
//
Mr. Mitchell continued to address Co-Chair MacKinnon's
question. He suggested that the // He noted that the
department had been noting the debt affordability of
PERS/TRS in its analysis, but had not considered the debt
affordability of //
Mr. Mitchell stated that as the state considered using
other sources of revenue, it should provide more stability
to annual revenue. It had been his position that the // He
thought incorporating //
Co-Chair MacKinnon thought it was positive news that //
10:40:19 AM
Mr. Alper addressed slide 18, "Fiscal Note Discussion":
The Department of Revenue has three separate Fiscal
Note for HB331
? OMB Component 121: Appropriates annual agent fees of
$2,500 to the Treasury Division beginning in FY2020
(UGF)
? OMB Component 3211: Appropriates estimated FY2019
debt service payment for bond program ($27 million
UGF)
? OMB Component 123: Appropriates estimated FY2019
bond proceeds to the Commissioner of Revenue to
purchase outstanding tax credits at a discounted value
($737.9 million DGF; new fund code 1253)
? The numbers in the second and third Notes are based
on assumptions:
o All $807 million in certificates outstanding on
1/1/18 participate in the program
o All achieve the reduced discount rate of 5.1%,
maximizing the payout
? No expected regulations, no recurring staff or
operating costs
Mr. Alper //
10:41:59 AM
Commissioner Fisher showed slide 19, "Conclusion: Oil & Gas
Tax Credit Solution":
Governor's economic stimulus: We expect substantial
reinvestment in Alaskan projects
Support Small Producers - Unfreeze pending development
projects
? Current bank financing to fields generating tax credits
is frozen in some cases
? Need to pay off credits so projects under development can
be completed
? State has a strategic interest in maintaining viability
of small producers as it increases competition in the basin
Need to Re-establish Alaska as a Premier O&G E&P Basin
? Alaska has reputational issues re: oil and gas
exploration and development that need to be
addressed now
? Alaska is highly prospective
Alaska is a stable environment in which long-term
projects can be mutually successful
More Revenue from Production is the Goal
? Future royalties equals: jobs, funding for schools and
gov't services, economic growth
Move cost into periods that match cash flow
A healthy and growing Alaska economy benefits all Alaskans!
10:43:16 AM
Co-Chair MacKinnon stated that there had been a questions
as to the constitutionality of the bill //
DOUGLAS GOE, STATE BOND COUNCIL, PUBLIC FINANCE DEPARTMENT,
ORRICK (via teleconference), offered that his office // He
referenced the // He considered that as the court had
considered constitutional debt. The majority of the cases
were very clear, and Alaska's case was //
Mr. Goe informed that there were two cases that // He
considered if the debt was subject to the legislature to
appropriate the debt. He // The vast majority of Supreme
Courts // A second category was often referred to as
revenue debt or // If the debt was payable from a
particular revenue source and there was otherwise no
recourse to the GF of the state, it was an exception.
Mr. Goe opined that the bill was carefully crafted and
constitutional. // He was prepared to say that if the bill
was adopted by the legislature //
10:48:47 AM
Mr. Goe considered the element in the bill that put a 45-
day period on any challenges to the bill. He thought it was
important for the state to be able to manage its fiscal
affairs and //
10:49:48 AM
PETER CLINTON, ING CAPITAL, NEW YORK CITY (via
teleconference), stated that ING Capital had been a
financier of many tax credits over the //
Mr. Clinton thought the bill to a certain extent was very
consistent with // He stated that ING Capital had several
large corporate relationships in Alaska, and //
10:52:36 AM
Mr. Clinton continued his remarks, and thought it was not
unusual to //
Mr. Clinton added that // He thought it was a preferable
outcome to //
10:56:22 AM
Mr. Clinton wanted to make it clear that the process was a
professional approach to the problem that he had seen many
times in the industry. //
10:57:20 AM
REBECCA LOGAN, THE ALASKA SUPPORT INDUSTRY ALLIANCE,
ANCHORAGE (via teleconference), testified // She read from
a letter authored by the AHTNA Corporation, and from //
(copy on file ????) //
10:59:53 AM
KARA MORIARTY, ALASKA OIL AND GAS ASSOCIATION, ANCHORAGE
(via teleconference), testified in support of the bill. She
noted that the association was // She stated that her
comments were reflective of the entire membership // She
thought there had been negative impacts // She believed the
state should honor all outstanding tax credits // She
thought the bill was an innovative approach to repaying
credits through a bonding mechanism. She thought the bill
would provide a level of certainty for members and //
11:02:44 AM
Co-Chair MacKinnon discussed the schedule for the
afternoon.
11:03:30 AM
Commissioner Fisher expressed appreciation for the
committee and the legislature for its consideration of the
bill. He thought the bill was //
Co-Chair MacKinnon stated that the Senate had followed the
progress of the bill in the other body.
CSHB 331(FIN) was HEARD and HELD in committee for further
consideration.
//
ADJOURNMENT
11:04:45 AM
The meeting was adjourned at 11:04 a.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 331 (FIN) Sectional SFIN CS-O.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB331 Credit Bonds for SFIN 5-8-18.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Schoffmann.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Logan.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| Hb 331 Support Nason.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Duxbury - Copy.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Duxbury.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Christensen.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Droop.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Kissee.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Stokes.msg |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Support Meyrs.msg |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |
| HB 331 Public Testimony Clemenz.pdf |
SFIN 5/8/2018 9:30:00 AM |
HB 331 |