Legislature(2015 - 2016)SENATE FINANCE 532

04/12/2016 01:30 PM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 128 PERM. FUND:DEPOSITS;DIVIDEND;EARNINGS TELECONFERENCED
Heard & Held
+ HB 188 PERSON W/DISABILITY SAVINGS ACCOUNTS TELECONFERENCED
Heard & Held
+ HB 83 REPEAL COLLECTION OF CIVIL LITIG. INFO TELECONFERENCED
Heard & Held
+ HB 289 BOARD OF BARBERS AND HAIRDRESSERS TELECONFERENCED
Heard & Held
+ HB 231 EXTEND BOARD OF PAROLE TELECONFERENCED
Heard & Held
+ HB 268 AIDEA:DIVIDEND TO STATE;INCOME;VALUATION TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 268                                                                                                            
                                                                                                                                
     "An  Act  relating to  the  dividends  from the  Alaska                                                                    
     Industrial Development  and Export  Authority; relating                                                                    
     to  the meaning  of 'mark-to-market  fair value,'  'net                                                                    
     income,'  'project or  development,' and  'unrestricted                                                                    
     net  income'  for  purposes of  the  Alaska  Industrial                                                                    
     Development and Export Authority;  and providing for an                                                                    
     effective date."                                                                                                           
                                                                                                                                
Co-Chair MacKinnon OPENED public testimony.                                                                                     
                                                                                                                                
3:26:47 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon CLOSED public testimony.                                                                                     
                                                                                                                                
3:27:07 PM                                                                                                                    
                                                                                                                                
GENE  THERRIAULT, STAFF,  ALASKA INDUSTRIAL  DEVELOPMENT AND                                                                    
EXPORT AUTHORITY,  (AIDEA) testified that the  first problem                                                                    
that  the  legislation  aimed to  address  was  the  "market                                                                    
value" adjustment entries.  He said that in  order for AIDEA                                                                    
to  get  its  audited financial  statement,  new  accounting                                                                    
rules required that  different assets that were  held by the                                                                    
authority  be evaluated  and  mark-to-market adjustments  be                                                                    
made during  the fiscal year. Generally  Accepted Accounting                                                                    
Principles   (G.A.A.P)   kept   evolving,   which   required                                                                    
recording  of market  value adjusting  entries; essentially,                                                                    
act like  something happened that  did not happen,  and book                                                                    
it  as  though  it  did.  He  relayed  that  this  would  be                                                                    
considered a "non-cash" adjustment  to the accounts that was                                                                    
bringing  an   unnecessary  amount  of  volatility   to  the                                                                    
calculation  of  the  dividend to  the  state  treasury.  He                                                                    
pointed to  Page 1 of  the bill, which offered  a definition                                                                    
of mark-to-market fair value":                                                                                                  
                                                                                                                                
          (2) "mark-to-market fair value" means fixing the                                                                    
     value of an investment as its market value as of the                                                                     
     financial reporting date;                                                                                                
                                                                                                                                
Mr.  Therriault  directed  committee attention  to  Page  2,                                                                    
which showed  that the  legislature had  previously included                                                                    
and  exclusion  mechanism  in the  calculation  of  the  net                                                                    
income for the  purposes of AIDEA paying out  a dividend. He                                                                    
stated  that the  bill  proposed  adding the  mark-to-market                                                                    
evaluations   to  the   exclusion  so   that  the   non-cash                                                                    
adjustments would be  backed out and the  true-net income of                                                                    
the authority  would serve for calculating  the dividend. He                                                                    
continued  that the  second problem  the bill  would address                                                                    
was the "dividend penalty". When  the value of a project had                                                                    
been determined  to have been permanently  reduced, for some                                                                    
reason,  G.A.A.P  required  booking/recording  an  adjusting                                                                    
entry between the balance sheet  and the income statement to                                                                    
reduce or remove some  or all of the value of  an asset or a                                                                    
project from  AIDEA's balance.  The resulting  entry reduced                                                                    
net income. The consequence  (depending on the facts), could                                                                    
possibly either  reduce the state's dividend  from a project                                                                    
it had funded  due to an adjusting entry  reducing value, or                                                                    
have AIDEA  paying a  dividend on  top of  a project  it had                                                                    
funded due to an adjusting  entry reducing value. The result                                                                    
could be up  to a 25 percent to 50  percent dividend penalty                                                                    
from an  adjusting entry.  He noted  that on  Page 2  of the                                                                    
bill noncash  adjustments and the  write-off of  assets that                                                                    
were purchased with outside sources  of money had been added                                                                    
to the  exclusion clause that  had already  been established                                                                    
by the legislature.  This would base the  yearly dividend to                                                                    
the  state treasury  on  true net  income  and would  remove                                                                    
unnecessary   volatility  in   the   calculation  of   those                                                                    
dividends.                                                                                                                      
                                                                                                                                
3:31:49 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon  requested a  Sectional Analysis  for the                                                                    
legislation.                                                                                                                    
                                                                                                                                
Mr. Therriault noted that the Sectional Analysis reiterated                                                                     
the 2 problems that the bill would correct.                                                                                     
                                                                                                                                
3:32:31 PM                                                                                                                    
                                                                                                                                
Mr. Therriault warned that swings in the volatility of the                                                                      
dividend would become more pronounced without the passage                                                                       
of the legislation.                                                                                                             
                                                                                                                                
3:33:10 PM                                                                                                                    
                                                                                                                                
MICHAEL LAMB, CHIEF FINANCIAL OFFICER, AIDEA (via                                                                               
teleconference), echoed Mr. Therriault's remarks.                                                                               
                                                                                                                                
3:33:40 PM                                                                                                                    
                                                                                                                                
Co-Chair MacKinnon asked whether the legislation was in any                                                                     
way related to the purchase of a gas utility.                                                                                   
                                                                                                                                
Mr. Lamb replied in the negative.                                                                                               
                                                                                                                                
HB 268 was HEARD and HELD in committee for further                                                                              
consideration.                                                                                                                  
                                                                                                                                

Document Name Date/Time Subjects
HB188 Sectional Analysis for version G.pdf SFIN 4/12/2016 1:30:00 PM
HB 188
HB188 Sponsor Statement.pdf SFIN 4/12/2016 1:30:00 PM
HB 188
HB188 Summary of Changes - Version N (HL&C) to Version G (HFIN).pdf SFIN 4/12/2016 1:30:00 PM
HB 188
HB188 Supporting Documents-Letter from Alaska Autism Speaks.pdf SFIN 4/12/2016 1:30:00 PM
HB 188
HB188 Supporting Documents-Letter from GCDSE.pdf SFIN 4/12/2016 1:30:00 PM
HB 188
HB188 Supporting Documents-Letter of support Municipality of Anchorage HSS.pdf SFIN 4/12/2016 1:30:00 PM
HB 188
HB 83 Committee Report.PDF SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Letter of Support Ken Jacobus.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Letters of Support.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Sectional Analysis.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Sponsor Statement .pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Summary of Changes.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support AS 09.68.130.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support Civil Case Data.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support Civil Case Form.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support Civil Case Report 2001.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support Resolution of Support Anchorage Bar Association.pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support Rules of Appellate Procedure 511 (c) and (e).pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB 83 Support Rules of Civil Procedure Rule 41 (a) (3).pdf SFIN 4/12/2016 1:30:00 PM
HB 83
HB289 Supporting Documents-Presentation from Board of Barbers and Hairdressers.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents - Professional Boards Report.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Article Forbes 6-16-2014.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Article Forbes 10-11-2014.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Angela Stubbs 2-23-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Blake Quackenbush 2-26-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Board of Barbers and Hairdressers 2-29-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Grace Halsey 2-23-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Jeannine Jabaay 2-23-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Rachel Saldana 2-25-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB289 Supporting Documents-Letter Renee Scott 2-25-2016.pdf SFIN 4/12/2016 1:30:00 PM
HB 289
HB231 Additional Info from Auditor.pdf SFIN 4/12/2016 1:30:00 PM
HB 231
HB231 Legislative Audit.pdf SFIN 4/12/2016 1:30:00 PM
HB 231
HB231 Sponsor Statement.pdf SFIN 4/12/2016 1:30:00 PM
HB 231
HB231 Summary of Changes.pdf SFIN 4/12/2016 1:30:00 PM
HB 231
HB268 PowerPoint presentation.pdf SFIN 4/12/2016 1:30:00 PM
HB 268
HB268 Sectional Analysis.pdf SFIN 4/12/2016 1:30:00 PM
HB 268
HB268 Transmittal Letter.pdf SFIN 4/12/2016 1:30:00 PM
HB 268
SB 128 - Sectional Analysis - Version N.pdf SFIN 4/12/2016 1:30:00 PM
SB 128
SB 128 CSSB 128 work draft version N.pdf SFIN 4/12/2016 1:30:00 PM
SB 128
SB 128 CSSB 128 LFD Fiscal Model Status Quo 041216.pdf SFIN 4/12/2016 1:30:00 PM
SB 128
SB 128 CSSB 128 version N LFD Fiscal Model 4 12 16.pdf SFIN 4/12/2016 1:30:00 PM
SB 128
HB 231 Parole Board PS Detail FY2017.pdf SFIN 4/12/2016 1:30:00 PM
HB 231
SB 128 Letter Packet 3.pdf SFIN 4/12/2016 1:30:00 PM
SB 128
SB 128 Key Coalition Letter - Senate Finance 4-15-16.pdf SFIN 4/12/2016 1:30:00 PM
SB 128