CS FOR SENATE BILL NO. 279(STA) "An Act authorizing and relating to the issuance of bonds by the Alaska Housing Finance Corporation for safe and clean water and hygienic sewage disposal facility capital projects and other capital projects; providing for the repayment of the bonds and bond costs; relating to the dividend paid to the state by the Alaska Housing Finance Corporation; and providing for an effective date." This was the second hearing for this bill in the Senate Finance Committee. Co-Chair Wilken explained that this legislation would authorize the Alaska Housing Finance Corporation to issue bonds in the amount of $25 million to fund capital projects; primarily village safe water projects. He noted that an amendment to increase the bond authorization by $20 million was adopted during the first hearing of the bill. He stated that the bill is accompanied by Department of Revenue fiscal note dated March 9, 2004. Co-Chair Wilken asked for a further explanation of the new March 9, 2004 Department of Revenue fiscal note as it is double the original fiscal note, rather than being increased "pro rata" with the adoption of the amendment that increased the bond authority from $25 million to $45 million. JOE DUBLER, Director of Finance, Alaska Housing Finance Corporation, Department of Revenue, testified via teleconference from Anchorage to explain that the fiscal note, dated February 9, 2004 was based on interest rates that were in effect when the program was being developed. Continuing he expressed that while the current interest rate is approximately 3.34 percent, this new fiscal note is "conservatively" calculated using an approximate five percent interest rate in order to more accurately reflect the ceiling level of anticipated debt service. Senator Bunde asked whether this legislation addresses concerns that were raised in a Legislative Budget and Audit report [copy not provided] regarding the proper use of funds for village safe water and wastewater programs. Senator Dyson responded that these [unspecified] issues have been addressed. He continued that assurance has been provided that the issue in question was "an anomaly and proper steps are being taken that it would never happen again." Co-Chair Wilken noted that, "this is more than a one year process." Continuing, he asked for further information as to how AHFC would monitor issues raised in the audit. BRIAN BUTCHER, Legislative Liaison, Alaska Housing Finance Corporation, Department of Revenue, testified via teleconference from Anchorage and explained that the decision as to where the bond proceeds as well as decisions regarding the AHFC dividend would be addressed by the Office of Management and Budget as they are responsible for the oversight of the projects in that "they make the decision as to where our money is spent." Co-Chair Green moved to report SB 279, Version "D" from Committee with individual recommendations and accompanying fiscal note. There being no objection, the bill was REPORTED from Committee. [NOTE: The action of reporting this bill from Committee was readdressed following the action on SB 274.] CS FOR SENATE BILL NO. 279(STA) "An Act authorizing and relating to the issuance of bonds by the Alaska Housing Finance Corporation for safe and clean water and hygienic sewage disposal facility capital projects and other capital projects; providing for the repayment of the bonds and bond costs; relating to the dividend paid to the state by the Alaska Housing Finance Corporation; and providing for an effective date." [NOTE: In order to correct this meeting's earlier Committee action on this bill, it was again brought before the Committee.] Co-Chair Wilken asked that the motion to report the bill from Committee be rescinded, as an amendment that had been adopted should have been reflected in the motion. Co-Chair Green offered a motion to RECIND her motion to REPORT the bill from Committee. There being no objection, the motion to report the bill from Committee was RESCINDED. Co-Chair Green moved to report the Version "D" committee substitute for SB 279, as amended, from Committee with individual recommendations and accompanying fiscal notes. There being no objection, CS SB 279 (FIN) was REPORTED from Committee with a new zero fiscal note, dated March 9, 2004, from the Department of Revenue.