State of Alaska
Fiscal Note
Bill Version: CSSB 125(CRA)
2018 Legislative Session
Fiscal Note Number: 1
(S) Publish Date: 1/31/2018
Identifier: SB125-DCCED-AIDEA-01-19-18 Department: Department of Commerce, Community and
Title: EXTEND BOND AUTH FOR INTERIOR ENERGY Economic Development
PROJ Appropriation: Alaska Industrial Development and Export
Sponsor: KELLY Authority
Requester: (S) Community and Regional Affairs Allocation: Alaska Industrial Development and Export
Authority
OMB Component Number: 1234
Expenditures/Revenues
Note: Amounts do not include inflation unless otherwise noted below. (Thousands of Dollars)
Included in
FY2019 Governor's
Appropriation FY2019 Out-Year Cost Estimates
Requested Request
OPERATING EXPENDITURES FY 2019 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024
Personal Services
Travel
Services
Commodities
Capital Outlay
Grants & Benefits
Miscellaneous
Total Operating 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Fund Source (Operating Only)
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Positions
Full-time
Part-time
Temporary
Change in Revenues
None
Total 0.0 0.0 0.0 0.0 0.0 0.0 0.0
Estimated SUPPLEMENTAL (FY2018) cost: 0.0 (separate supplemental appropriation required)
(discuss reasons and fund source(s) in analysis section)
Estimated CAPITAL (FY2019) cost: 0.0 (separate capital appropriation required)
(discuss reasons and fund source(s) in analysis section)
ASSOCIATED REGULATIONS
Does the bill direct, or will the bill result in, regulation changes adopted by your agency? No
If yes, by what date are the regulations to be adopted, amended or repealed? N/A
Why this fiscal note differs from previous version/comments:
Not applicable, initial version.
Prepared By: John Springsteen, Executive Director Phone: (907)771-3000
Division: Alaska Industrial Development and Export Authority Date: 01/19/2018
Approved By: Catherine Reardon, Director Date: 01/19/18
Agency: Division of Administrative Services, DCCED
Printed 1/31/2018 Page 1 of 2 Control Code: ePRna
 CSSB 125(CRA) - Fiscal Note 1
FISCAL NOTE ANALYSIS
STATE OF ALASKA BILL NO. SB125
2018 LEGISLATIVE SESSION
Analysis
The Alaska Industrial Development and Export Authority (AIDEA) does not anticipate fiscal impact from this legislation.
Legislation passed in 2013 under SB23 and amended in 2015 by HB105 authorizes AIDEA to provide financing for the
development, construction, and installation of, and the startup costs of operation and maintenance for, a liquefied
natural gas (LNG) production plant and system and affiliated infrastructure in the state that will provide natural gas to
Interior Alaska as a primary market and natural gas delivery and distribution systems and affiliated infrastructure that will
provide natural gas to Interior Alaska.
As part of this financing package the Authority was authorized to issue bonds under AS 44.88.090 that are secured by a
capital reserve fund (AS 44.88.105). Notwithstanding AS 44.88.105, in establishing a capital reserve fund for the bonds,
the Authority is not required to determine that the capital reserve fund is necessary to enhance the marketability of the
bonds. The Authority shall manage the capital reserve fund as provided in AS 44.88.105. The principal amount of the
bonds authorized may not exceed $150,000,000 plus the cost of capitalized interest, bond counsel fees, trustee fees,
rating fees, financial advisor fees, escrow costs, and other bond issuance costs that the authority considers reasonable and
appropriate. The bonding authorization provided with SB 23, as amended by HB105, expires on June 30, 2018.
Progress on a HB 105 compliant project plan to advance the Interior Energy Project (IEP) was delayed due to the length of
time it took to acquire a natural gas supply. When gas supply was secured, the AIDEA Board approved a project plan on
September 21, 2017. Adoption of the project plan allowed negotiations to proceed for consolidation of existing Fairbanks
Natural Gas supply, storage and distribution infrastructure with the Interior Gas Utility. Documents to perform this
consolidation were finalized, approved and signed in December 2017. On January 16, 2018 final regulatory authorization
was granted to start construction of a largescale LNG storage and regas facility in Fairbanks. Although expenditures to
date have not required the issuance of bonds under the existing AIDEA authorization, a decision to expand LNG production
capacity to serve anticipated customer demand is expected in 2018. This LNG plant expansion and longer term
distribution buildout will require access to bond financing.
An extension of the bonding authorization to June 30, 2023 would preserve an important component of the previously
approved financing package for the Interior Energy Project. Without enacting this proposed legislation, the capability for
AIDEA to assist the IEP would be curtailed. An extension of the bonding authorization would ensure the financing made
available for the Interior Energy Project would continue to be an available tool for this important project.
Passage of SB 125 will not change the amount, or restricted use, of the existing bond authorization for the IEP, but would
simply allow more time for the bonds to be used.
(Revised 9/26/17 OMB/LFD) Page 2 of 2
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