SB 73-AIDEA AUTHORITY TO ISSUE BONDS    CHAIR CON BUNDE announced SB 73 to be up for consideration. MR. RON MILLER, Executive Director, Alaska Industrial Export Development Authority (AIDEA), said SB 73 would extend AIDEA's general bonding authority until July 1, 2007. Without this extension, they would need legislative authorization to issue bonds for development projects under $10 million and would be restricted from issuing any bonds to finance the purchase of loan participations without legislative authorization. Examples of bond issues that would require legislative authorization after July 1, 2003 are in the handout he provided. He noted: The first was a series 1995 A revolving fund bond for just over $8 million that provided tax exempt funds for loan participation for Kodiak Fish Meal Company for a fish by-product processing plant. The other is a series 1991 A revolving fund bond for $7 million that provided tax exempt bonds for expansion improvement of the Unalaska Marine Center. That project also had legislative authorization. The following requirements are not affected by SB 73 - all development projects over $10 million for which bonds are to be issued do now require and still require legislative authorization prior to issuing the bonds. Prior to issuing bonds over $6 million, AIDEA is required to receive approval from the local government in which the project is to be located. All development projects for which bonds are to be issued require AIDEA to make findings that the project is economically and financially feasible. This legislation affects none of those requirements. Recently, we've only issued refunded and conduit revenue bonds, which are not affected by SB 73. If this bill doesn't pass, we'll continue to have the ability to issue refunding bonds and conduit revenue bonds. However, the sunset extension provides AIDEA the flexibility to assist in financing of key development projects. If the sunset is allowed to go forward, and depending on the timing of any potential project, AIDEA would have to wait for legislative authorization to issue bonds. Allowing this bond authority to sunset would eliminate a tool for AIDEA to use in economic development projects. SENATOR SEEKINS questioned whether the due diligence requirement of economic and financial feasibility would affected. MR. MILLER replied that SB 73 wouldn't affect that. SENATOR SEEKINS asked if the benefit is that AIDEA could offer it on a tax-exempt basis and thereby make a project even more economically feasible by potentially reducing the interest rate. MR. MILLER replied that AIDEA has that authority now. He explained that SB 73 would allow AIDEA to go forward with a project that it would otherwise have to hold in abeyance until the Legislature convenes. SENATOR HOLLIS FRENCH asked how many bonding projects AIDEA would take up in the next 12 months that are under $10-million. MS. SARAH FISHER-GOOD, financial analyst for AIDEA and AEA, explained that currently nothing is on AIDEA's docket that would require issuing bonds for under $10-million. SENATOR FRENCH asked the status of the two examples - the $8 million and $7 million bonding projects. MR. MILLER replied that, in the past, those projects were funded using this authorization. SENATOR FRENCH asked how much bonding AIDEA does each year. MS. FISHER-GOOD replied that the only bond AIDEA has issued recently was a Federal Express refunding bond. The other issues that are done are conduit revenue bonds. CHAIR BUNDE closed the committee discussion on SB 73. SENATOR RALPH SEEKINS moved to pass SB 73 from committee with individual recommendations. There were no objections and the roll was called. Senators Davis, French, Gary Stevens, Seekins and Bunde voted in favor and SB 73 moved from committee.