Legislature(2009 - 2010)

2009-01-28 House Journal

Full Journal pdf

2009-01-28                     House Journal                      Page 0095
HB 90                                                                                                                         
HOUSE BILL NO. 90 by the House Rules Committee by request of                                                                    
the Governor, entitled:                                                                                                         
     "An Act relating to bonding limitations and confidentiality of                                                             
     records and information of the Alaska Industrial Development and                                                           
     Export Authority; and providing for an effective date."                                                                    
was read the first time and referred to the Labor & Commerce and                                                                
Finance Committees.                                                                                                             
The following fiscal note(s) apply:                                                                                             
1.  Zero, Dept. of Commerce, Community, & Economic Development                                                                  
The Governor's transmittal letter dated January 23, 2009, follows:                                                              
"Dear Speaker Chenault:                                                                                                         
Under the authority of Article III, Section 18, of the Alaska                                                                   
Constitution, I am transmitting a bill relating to bonding limitations                                                          
and confidentiality of records and information of the Alaska Industrial                                                         
Development and Export Authority (AIDEA).                                                                                       
This bill would accomplish five things.  Section 1 of the bill would                                                            
exclude refunding and conduit revenue bonds from the 12-month bond                                                              
limit of the Authority.  AS 44.88.095(a) precludes AIDEA from                                                                   
issuing more than $400,000,000 of bonds during any 12-month period.                                                             
Enactment of the bill would ensure that the 12-month bond limit                                                                 
would never preclude AIDEA from issuing refunding bonds to                                                                      
refinance existing development finance project debt on more favorable                                                           
terms, or from issuing conduit revenue bonds for which AIDEA has no                                                             
financial obligation to pay.  Conduit revenue bonds are payable by the                                                          
project developer and related parties, primarily from revenue                                                                   
generated by the project.                                                                                                       
Section 2 of the bill would eliminate the sunset of the statutory ability                                                       
of AIDEA issuing bonds.  AS 44.88.095(g) severely limits the ability                                                            
of AIDEA to issue bonds.  Before the July 1, 2007 statutory sunset,                                                             
AS 44.88.095(g) authorized AIDEA to issue most bonds without                                                                    
further legislative approval; the sole exception being bonds in excess                                                          

2009-01-28                     House Journal                      Page 0096
of $10,000,000 to assist in the financing of a development project                                                              
under AS 44.88.172 - 44.88.177.  That authorization to issue bonds                                                              
ended on July 1, 2007, with the statutory sunset.  AIDEA currently                                                              
requires legislative approval to issue any bonds, excepting refunding                                                           
and conduit revenue bonds.  Section 2 of the bill would amend                                                                   
AS 44.88.095(g) to eliminate the sunset and enable AIDEA to again                                                               
issue most bonds without legislative approval.  AIDEA will still                                                                
require legislative approval to issue bonds in excess of $10,000,000 to                                                         
assist in the financing of development projects, excluding refunding                                                            
Section 2 of the bill would also expressly clarify in statute that AIDEA                                                        
may use proceeds from refunding bonds to finance certain costs and                                                              
expenses associated with issuing the refunding bonds.                                                                           
AS 44.88.095(g) empowers AIDEA to issue refunding bonds for                                                                     
development projects, but does not provide sufficient clarity required                                                          
by bond markets to enable proceeds from the refunding bonds to be                                                               
used to pay more than the outstanding balance of the existing bonds.                                                            
The bill, if enacted, would enable AIDEA to issue refunding bonds,                                                              
the proceeds from which can be used to pay both the outstanding                                                                 
balance of the existing bonds and the costs of refinancing, funding                                                             
reserves, and other costs related to issuing refunding bonds for                                                                
development projects.  The ability to use refunding bond proceeds to                                                            
pay these additional costs is anticipated to reduce the cost of financing,                                                      
which would provide a direct economic benefit to project developers.                                                            
Sections 3 and 4 of the bill would amend AS 44.88.215 to clarify                                                                
confidential records and information of AIDEA, and processes for                                                                
determining confidentiality.  AS 44.88.215 assists the mission of                                                               
AIDEA by assuring borrowers, applicants, and project developers that                                                            
certain records and information provided to AIDEA will be kept                                                                  
confidential.  AIDEA has heard complaints from borrowers,                                                                       
applicants, and project developers because AS 44.88.215 does not                                                                
clearly establish that AIDEA can retain the confidentiality of certain                                                          
types of documents.  Sections 5 and 6 of the bill attempt to address                                                            
these concerns by clarifying that certain types of records and                                                                  
information are confidential, defines "trade secrets" using the Alaska                                                          
Uniform Trade Secrets Act to clarify existing statutory language, and                                                           
establishes processes for the executive director of AIDEA to                                                                    
determine confidentiality of records and information.                                                                           

2009-01-28                     House Journal                      Page 0097
Finally, Section 8 of the bill would make the Act effective on July 1,                                                          
I urge your prompt and favorable action on this measure.                                                                        
                               Sarah Palin