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." Co-chair Sharp called SB 261. He noted that it had been held due to his absence and there had been concern regarding the financing plan or guarantees. Mary Gore, staff to Senate President Mike Miller, was invited to join the committee. She said what was before the committee today was changes to the original piece of legislation that would tighten up the concerns the committee noted last week. She said another changes had been discussed between herself and Senator Donley on page three, section 4(3). She said this change would make sure no money would be appropriated to the organizing committee prior to the year 2001. Senator Donley referred to page three, line twelve and said the organization desired financial assistance from the State. It has now been modified that the plan being submitted is a financial guarantee plan and not just a request for money. He would further like to see language added that would specifically say the local organizing committee would make a good faith effort to raise money on their own even when the financial plan is in place. He suggested that on line nineteen language could be added to ensure the local organizing committee uses it's best efforts to minimize cost to the State so there is an ongoing written responsibility by the local organizing committee to minimize the cost to the State to continue to raise money. Senator Adams said he agreed with the concept of the amendment but would like to see it in writing to make sure the sponsor does not mind and that it is on record. Co- chair Sharp concurred. Senator Donley said due diligence had been discussed and there had been several attempts to incorporate that concept, which he considered a good explanation of best effort. He noted the drafters had refused to put it into ... Ms. Gore said that was because it was not technical. Senator Phillips reminded her that due diligence inquiries is done in the oil and gas areas. Senator Donley concurred and said he was confused by their refusal. Senator Parnell said he had a procedural question and asked if the Co-chair would like him to move the work draft and have it adopted or would he rather they wait for Senator Donley's changes. Co-chair Sharp said the work draft should be adopted and then they could take up amendments if there were any. Senator Parnell MOVED work draft CSSB 261 (), "E" version, dated 23 February 1998. Senator Adams OBJECTION. He asked Ms. Gore regarding page three, line thirty, as to where the actual money would be coming from. Ms. Gore said it would be up to the Legislature in the year 2001 to make that determination. Senator Adams asked if the organization had designated any specific funding source? Ms. Gore indicated negative. Senator Adams advised Co-chair Sharp that he REMOVED his OBJECTION. Co-chair Sharp said WITHOUT OBJECTION the work draft had been ADOPTED. Senator Donley asked there be discussion regarding his suggested conceptual amendment on page three, line nineteen after the word "State" be added "and ensures local organized committee uses it's best efforts to minimize cost to the State". Would the committee prefer to say "and insures the local organizing committee uses due diligence to minimize the cost to the State."? Senator Parnell said they could certify the financial guarantee plan that they've used due diligence or best effort. He felt that might be another approach when the financial plan was submitted. Senator Donley referred to the original presentation of the plan to the State. Subsequently there is a series of semi- annual updates to the plan. It would be appropriate that when the semi-annual updates were made that the organization certified they used due diligence or good faith effort to raise as much money on their own as possible. That could probably be inserted under section (b). Senator Adams asked that comments be heard from AIDEA staff that was present. Keith Laufer, Financial and Legal Affairs Manager, AIDEA was invited to join the committee. Responding to Senator Donley he said he felt the due diligence responsibility was with AIDEA as opposed to the local committee. As he understood the bill, they would submit a finance plan to AIDEA, which by the amendment would have to minimize State assistance. Perhaps the way to handle the concerns would be under section (d), to amend it to read, "the finance plan and all updates are subject to the approval of the authority following reasonable due diligence." (pause on tape) Senator Donley said the problem still existed with what the committee wanted was not due diligence by AIDEA but that AIDEA used due diligence to confirm due diligence by the organizing committee. They did not want that once the guarantee was put in place everyone would figure they did not have to worry anymore because there was a financial guarantee. He further told Ms. Gore he knew this was a wonderful organization but they were also dealing with people's money and therefore they would have to be conservative and protect these monies. Senator Parnell suggested that at line 19, after the word "State" insert "and ensures the local sponsor organization undertakes to acquire funds through private sources" ... "the finance plan must include a method of financing the games that minimizes the cost to the State and ensures the local sponsor organization undertakes to acquire funds through private sources." Ms. Gore asked that it not be limited to private sources because if the Government of Sri Lanka wanted to give money to us... Senator Parnell continued with "non-State of Alaska sources". Or "sources other than the State of Alaska". (Miscellaneous conversation among members at the table followed regarding the correct wording of an amendment.) Senator Phillips referred to the Arctic Winter Games that were held in Eagle River in 1996. In order to start this off the Municipality of Anchorage set it up with $100,000, with an agreement that the organizing committee would pay that money back. Granted he didn't think the City ever expected the money back, but the community and the organized committee did pay it back. The language in their agreement might be looked at for suggestions. Senator Phillips said he could call the City and get a copy of said agreement. Senator Torgerson asked if there was a time line by which to get this bill heard. Ms. Gore indicated that the international committee had wanted it as soon possible. The letter sent by Senate President Mike Miller and House Speaker Gail Phillips last fall was basically buying time at this point. The sooner it could be gotten to them as passed legislation the better. For the record, she said the City of Anchorage wants to bid on the big winter game. Private industry in Anchorage is basically behind this. They are not going to let this guarantee be used because if they intend to go after the big games they cannot have this as a black eye on their record that they did not come up with the money for the Special Olympic Winter Games. They are committed to raising the money. Three million dollars of the eight million dollars has been raised to date and they are continuing to raise money. Senator Donley MOVED amendment #1 regarding lines 19 and 24. Due to greater discussion by the members regarding the amendment there was NO OBJECTION and it was ADOPTED. Senator Torgerson posed a delayed objection so the sponsor could read the amendment. (pause on record) He then removed his objection. Senator Parnell MOVED CSSB 261 FIN) as amended with individual recommendations and accompanying zero fiscal note and WITHOUT OBJECTION it was REPORTED OUT with individual recommendations and accompanying zero fiscal note from Department of Commerce and Economic Development/AIDEA. Co-chair Sharp reviewed the afternoon schedule commencing at 4:30 p.m. with scheduled budget meeting to be chaired by Senator Pearce. Thursday morning SB 273 would be on the calendar and Thursday evening at 6:00 p.m. public testimony would be taken Statewide on SB 36. The co-chair further noted that the amendments to SB 273 Charitable Gaming had been rolled into a new CS for presentation to the committee. ADJOURNMENT There being nothing further to come before the committee Co- chair Sharp recessed at approximately 10:23 a.m. SFC-98 -17- 2/24/98