HOUSE BILL NO. 386 "An Act relating to the financing authority, programs, operations, and projects of the Alaska Industrial Development and Export Authority; and providing for an effective date." Co-Chair Therriault provided members with a proposed committee substitute for HB 386, Work Draft 0-GH2023\E, dated 3/3/98 (copy on file). KEITH LAUFER, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT reviewed the proposed committee substitute. He noted that the sunset date would be July 1, 2003. Minor wording changes occurred on page 5, line 11. Section 8 was replaced. The original legislation would have set up a procedure for AIDEA to create categories of confidential documents. Documents that could never be made confidential were identified. This provision was changed to set forth the specific items that can be made confidential on page 6, line 21 - page 7 line 2. Subsection (b) addresses concerns regarding information compiled by AIDEA that can also remain confidential if the information fits within one of the confidential categories. The definition of "political loss" was moved to section 10 by request of the drafter. "Shall" was changed to "must" on page 7, line 22. Other technical changes were made to conform to drafting recommendations. Section 23 is new. Section 23 is the legislative authorization to finance bonds for the DeLong Mountain transportation project at Red Dog mine and for the Nome port improvement project. The effective date was changed to clarify that only section 21 has a June 30, 1998 effective date. Representative Davies asked if legislative approvals in section 23 would follow the due diligence process. RANDY SIMMONS, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT clarify that the due diligence process would apply. The process would start in the following week. The Board of Directors must approve findings on the projects. Representative Grussendorf pointed out that "political loss" could refer to nationalization, confiscation, or destruction by military activities. Mr. Simmons agreed and noted that AIDEA used to require insurance on every export transaction regardless of the country of export. In response to a question by Representative Martin, Mr. Simmons noted that AIDEA could authorize bonds up to $400 million dollars a year. Bond covenants apply to certain coverage. (Tape Change, HFC 98 -49, Side 2) Mr. Simmons noted that AIDEA has $322 million dollars in loans outstanding. He clarified that the state of Alaska is not morally obligated on any of the bonds issued by AIDEA. JOHN KEY, GENERAL MANAGER, COMINCO ALASKA read his written testimony in support of HB 386 (copy on file). Mr. Simmons noted that there are 44 years left on the AIDEA loan to Red Dog. He explained that AIDEA owns the facilities on development projects they finance. The Alaska Industrial Development and Export Authority may receive payments to the State long after there are outstanding bonds. Red Dog would still be responsible for their financial commitments if the bonds were paid off. Representative Foster MOVED to ADOPT Work Draft 0-GH2023\E, dated 3/3/98. There being NO OBJECTION, it was so ordered. Representative Foster MOVED to report CSHB 386 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 386 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a zero fiscal note by the Department of Commerce and Economic Development.