HB 471-AIDEA LOANS AND DIVIDEND    JESSICA MENENDEZ, staff to Representative Joe Green, introduced HB 471. It amends three important programs for Alaska Industrial Development & Export Authority (AIDEA), the AIDEA dividend calculation, the vote for the Bulk Fuel Revolving Loan Fund and the Rural Development Initiative Fund (RDIF). AIDEA is a self-supporting state authority that contributes an annual dividend. To date and including this year's dividend of over $20 million, they have contributed $129 million to the state's general fund. The competition for the dividend is between 25 and 50 percent of net income for that base fiscal year but it may not exceed AIDEA's unrestricted net income. Two changes by the Governmental Accounting Standards Boards (GASB) could change how AIDEA would calculate their dividend. In their audited financial statements they no longer include the term for net income so without that amount it doesn't give the Board a clear directive how to compute the annual dividend. They have also said that any intergovernmental transfers, capital contributions or grants would need to be listed as an expense. If listed as an expense, this would further reduce the dividend. The bill also increases the maximum amount from the Bulk Fuel Revolving Fund from $100,000.00 to $200,000.00. It is cheaper to buy fuel in larger amounts in rural communities in particular. They have the tank storage capacity for that and some communities can only get one barge load of fuel per year so doubling the maximum fills a demonstrated need. Finally, the bill more clearly defines the eligibility requirements for AIDEA's rural development initiative fund. This program was developed for rural communities that had no other funding options available to them. It defines those qualifying participants to be living in a community of less than 5,000 people, not connected by road or rail or 2,000 people who are connected by road and rail from Anchorage to Fairbanks. BOB POE, Executive Director of AEDIA, testified via teleconference. He said AIDEA has issued dividends since 1995 for a total of $129 million. The new GASB changes mean AIDEA must make sure that the dividend continues to work. [Tape indiscernible] The increased amount in the Bulk Fuel Revolving Loan Fund is to allow communities to buy in bulk. The USDA recently gave them a grant of $5 million to the revolving loan fund. [Tape indiscernible] Finally, the changes with respect to the Rural Development Initiative Fund are to make sure that the loan program works as intended. CHAIRMAN TORGERSON asked for the reasoning behind the exemption on road connected or not road connected and why he cared. MR. POE said he didn't care whether they were road connected or not, but they do care about the rural aspect. [Tape indiscernible] It was really intended for communities that have lodges in the wilderness or in truly rural communities. The group that came up with the definition did their best to define rural based on other definitions of rural. CHAIRMAN TORGERSON remarked that's Alaska Housing definition. He then asked what program they have for non-rural residents. MR. POE said they have the Loan Participation Program in AEDEA, which is an active program with a distribution that matches the population distribution of the state. This year they will do about $55 million in loan participation in conjunction with the commercial banking industry. Amounts range from $15,000 to $10 million with up to a 25 year term. CHAIRMAN TORGERSON then said he didn't see a definition of community in 29.71.800 even though it was cited. MR. POE asked whether there was anyone from the Department of Law available to answer the question, but there was no one. CHAIRMAN TORGERSON said he wouldn't hold the bill, but asked Mr. Poe to look at the issue between then and the hearing in the next committee of referral because he didn't think there was a definition of community in the statute. MR. POE agreed. There was no further testimony. SENATOR AUSTERMAN made a motion to move HB 471 and attached fiscal note from committee with individual recommendations. There being no objection, it was so ordered.