SENATOR KELLY called  the Senate Labor and  Commerce meeting                 
  to order  at 1:40  p.m. and  announced SB  171 AIDEA  BONDS;                 
  BUSINESS ASSISTANCE PROG. to be up for consideration.                        
                                                                               
  SENATOR PEARCE said if enacted,  SB 171 would accomplish two                 
  key  objectives   for  the  Alaska   Industrial  Development                 
  Authority (AIDA).   Section 1 gives legislative  approval to                 
  AIDA to authorize the issuance of bonds up to $40 million to                 
  finance the acquisition, design,  and construction of public                 
  use   aircraft   fueling   facilities   at   the   Anchorage                 
  International Airport.                                                       
                                                                               
  Section 2  of the  bill extends  the sunset  date of  AIDA's                 
  business assistance fund to July 1, 1996.                                    
                                                                               
  SENATOR  PEARCE noted  there were  two proposed  amendments.                 
  The first tightens the Title and  the other deletes the word                 
  "revenue."                                                                   
                                                                               
  JOHN OLSON, Deputy Director of  Development, AIDA, supported                 
  SB 171 although  it originated  through the legislature  and                 
  not the Governor's office as is usual.                                       
                                                                               
  SENATOR RIEGER asked if these  bonds are payable by  statute                 
  solely  out  of the  revenue proceeds  of  the owner  of the                 
  project.   MR.  OLSON explained  they would use  the general                 
  obligation of the Authority as credit  for the bonds.  Under                 
  this program the  project would have  to cost less than  $10                 
  million.  The only way they  can issue revenue bonds greater                 
  than $10 million is if AIDA owns the project.                                
                                                                               
  Number 176                                                                   
                                                                               
  SENATOR  RIEGER said  he wanted to  be sure  the legislature                 
  could  issue,  if  they  choose,  revenue bonds  instead  of                 
  authorizing general obligation  bonds.   MR. OLSON said  the                 
  legislature  can authorize  revenue  bonds,  but AIDA  still                 
  wants the option to use the  g.o. capacity of the Authority,                 
  should it be necessary, to finance projects.                                 
                                                                               
                                                                               
  SENATOR KELLY asked  if he was  implying AIDEA might not  be                 
  able to sell revenue bonds based on these two projects?  MR.                 
  OLSON replied  they do  not know,  yet, about  the depth  of                 
  credit of either entity they are dealing with.                               
                                                                               
  SENATOR KELLY asked what  was the contribution of  MIDREX to                 
  the Point McKenzie project.  MR. OLSON explained the portion                 
  of the project AIDA  would finance is the dock  and load-off                 
  system.   The infra-structure  to the  port might need  some                 
  improvements, but that is to be done by the borough.                         
                                                                               
  ASHLEY REED, representing the Mat-Su Borough, said the roads                 
  and utility extensions are already in place.                                 
                                                                               
  SENATOR SHARP asked if Tesoro presently utilized the Port of                 
  Anchorage for  supplying fuel?   MR. OLSON  said he  thought                 
  Tesoro  supplied  fuel  by  pipeline,  although  fuel   will                 
  eventually  get  to the  new  system  through  the  Port  of                 
  Anchorage.                                                                   
                                                                               
  Number 249                                                                   
                                                                               
  MR.  REED explained  that  all the  refiners  have the  same                 
  ability to use the Anchorage Port  facilities and do so now.                 
  The fuel is off-loaded there and is piped to the airport.                    
                                                                               
  SENATOR SHARP said he saw an advantage being given to Tesoro                 
  if they have  a direct line  from their refinery right  into                 
  the tank farm partially financed by AIDA.                                    
                                                                               
  MR. OLSON said  this project is  supported by MAPCO, but  he                 
  would find out more about the operations of the pipeline.                    
                                                                               
  MR. OLSON said the $40 million was to be used at the airport                 
  on the west side of the north-south runway.                                  
                                                                               
  SENATOR RIEGER wanted  to know  what statute covered  AIDA's                 
  bonding  authority  and  SENATOR  KELLY  wanted  the Nikiski                 
  Pipeline question  answered.   SENATOR SALO  said she  would                 
  like to see the questions answered before the bill was moved                 
  to Finance.                                                                  
                                                                               
  SENATOR RIEGER stated  he had strong reservations  on adding                 
  to the state's ownership of projects.                                        
                                                                               
  SENATOR PEARCE said  she doubted if there  were any airlines                 
  who would cooperate in owning  the facility at the  airport.                 
  She noted that  the expansion at  the Anchorage Airport  can                 
  not  continue  until  the  fuel  tanks  are  moved  and  the                 
  environmental clean-up happens.                                              
                                                                               
  SENATOR  RIEGER moved  to  pass SB  171 from  committee with                 
  individual recommendations.  There were no objections and it                 
                                                                               
                                                                               
  was so ordered.