SENATE BILL NO. 261 "An Act relating to the Special Olympics World Winter Games to be held in Anchorage in the year 2001; establishing a reserve fund for the games; providing certain duties and authority for the Alaska Industrial Development and Export Authority regarding financing for those games; and providing for an effective date." MARY GORE, STAFF, SENATOR MILLER observed that she is also the Area Director, for the Special Olympics, Juneau. Ms. Gore noted that the Legislation is a result of hard work by a variety of people to guarantee that Anchorage would be awarded the Special Olympics World Winter Games in 2001. Ms. Gore observed that, several years ago, Jim Belamaci, Executive Director of Special Olympics Alaska, decided it would be a great thing to bring the World Winter Games to Anchorage. He enlisted the help of Senator Ted Stevens. An organizing committee was formed. Last summer the Anchorage organizing committee was told by the Special Olympics International (SOI) that in order to be awarded the bid, the state would need to be the financial guarantor. The Special Olympics International would not go in the hole as a result of any location being awarded the bid. She observed that the money does not need to be appropriated prior to the bid being awarded but state support must be demonstrated. Ms. Gore stressed that the State must be on the record as the obligor if the money is not raised by private sources. This legislation "morally obligates" the state to make up the difference, up to $4 million dollars if the organizing committee does not raise the funds. She maintained that the risk to the State is minimal. The total budget for the games is $8 million dollars, with $4 million dollars in cash and $4 million dollars in kind contributions. Thus far about $1 million dollars in cash has been raised. The organizing Committee has 3 years to raise the remainder. The legislation has a set of checks and balances. The Alaska Industrial Development and Export Authority will oversee fundraising and report to the legislature on January 2 of each year as to the status of their efforts. She maintained that in the event that the Committee falls behind, a gentle push from the legislature could put them back on track. Ms. Gore concluded that the legislation only "morally obligates" future legislatures. In the year 2001, the legislature would need to appropriate the funding and authorize expenditures for use if it were needed. Co-Chair Therriault expressed concern that the state of Alaska not be responsible for more than the initial $4 million dollars. Ms. Gore assured him that the state of Alaska's liability would not exceed that amount. Representative Martin questioned Ms. Gore in regards to housing. Ms. Gore clarified that the intention is to use housing available at Anchorage military bases. Athletes would be housed at Fort Richardson and the Elmendorf Air Force Base. She noted that Camp Carroll had been used in the past for Alaskan Special Olympic activities, but that the military bases were preferable. Athletes could be housed in a semblance of an Olympic village. Athletes want to be able to stay together. (Tape Change, HFC 98 -67, Side 2) Co-Chair Hanley observed that the Committee could raise more than $4 million dollars, and still spend more than they raised. He concluded that the state of Alaska could be liable for the amount that was spent beyond what was raised, even though the initial $4 million dollars was met. Ms. Gore emphasized that it is not the intent that the state of Alaska be responsible for more than the initial $4 million dollars. She observed that the budget was developed based on previous games. Co-Chair Hanley reiterated concerns that the State not be responsible for amounts over budget. He stressed that the legislation must clarify that the state of Alaska is not responsible for expenditures, if the Committee does not stick within their budget. KEITH LAUFER, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY, DEPARTMENT OF COMMERCE AND ECONOMIC DEVELOPMENT (AIDEA) testified in support of SB 261. He emphasized that the moral obligation guarantee makes sense. He observed that AIDEA would provide a finding of reasonable due diligence and work on a financial plan. The Alaska Industrial Development and Export Authority has had experience reviewing financial plans. He stressed that AIDEA will watch to make sure that the budget stays within the financial plan. Representative Martin clarified that an AIDEA representative would be at the financial meetings. In response to a question by Representative Martin, Ms. Gore stated that they did not know how many athletes would be competing. She estimated that there would be 6,000 to 7,000 thousand people participating. This includes athletes, trainers, coaches, families and press. Eight hundred to a thousand athletes are expected to participate. Representative Davies observed that the Legislature would be morally obligated to a cumulative total of $4 million dollars if there is insufficient money from the other sources to satisfy the finance plan. He pointed out that the finance plan is not limited to $4 million dollars in cash. Mr. Laufer observed that the International Special Olympics Committee sought a straight $4 million dollar guarantee by the state of Alaska. A $4 million dollar moral obligation was offered in place of a straight guarantee. Co-Chair Therriault questioned if the guarantee would be on the first $4 million dollars or on subsequent money. Mr. Laufer clarified that the guarantee would be on the last $4 million dollars needed for the game. He pointed out that the legislation requires the financial plan to minimize the cost to the State. The cost to the State would be after all other sources are insufficient. Ms. Gore stressed that if additional cash is raised that the intent is that they be able to spend the money. Co-Chair Therriault questioned if the state of Alaska would be responsible for money expenditures beyond $4 million dollars. Ms. Gore stated that the intent of the legislation is to exempt the state from obligation once the $4 million dollars is spent. Mr. Laufer referred to section 4(d). He noted that AIDEA has to find after reasonable due diligence that the plan minimizes the cost to the state of Alaska. The budget would only be increased after a finding that the burden of the state has been minimized to zero. Co-Chair Hanley suggested that the state of Alaska's guarantee should be up to the first $4 million dollars in cash. Representative Martin asked if transportation costs are paid for the athletes. Ms. Gore noted that athletes pay for their own transportation. Food is the major cost. Some venues will be free or at a reduced cost. She clarified that food, transportation and housing would be purchased at a reduced cost from the military. Co-Chair Therriault noted his intent to draft a committee substitute to clarify that the state of Alaska's would only guarantee the first $4 million dollars in cash. SB 261 was HELD in Committee for further consideration.