House committee kills state-owned corporation’s plan to borrow up to $300 million

Members of the Alaska House have refused a request by the Alaska Industrial Development and Export Authority for permission to borrow up to $300 million for unspecified mining-related projects.

On Friday night, the House Finance Committee removed the requested bonding authority from House Bill 122, which was originally written to allow the Alaska Railroad to borrow money.

AIDEA’s request for up to $300 million in bonding authority was subsequently amended into the bill by the House Transportation Committee at the urging of Rep. Tom McKay, R-Anchorage, but the finance committee was critical of the idea.

Over the past two years, the conservation group SalmonState has funded a series of economic analyses that found AIDEA ineffective in terms of job creation and revenue generation.

AIDEA officials have disputed those findings and have commissioned an as-yet-unfinished alternative analysis, but the SalmonState-funded analyses have encouraged public skepticism of AIDEA actions, and lawmakers heard significant public testimony against AIDEA’s bonding request.

“AIDEA has definitely run into a public image problem,” said Rep. Neal Foster, D-Nome and co-chair of the House Finance Committee.

Contacted after the vote, AIDEA officials said they “supported the amendment as part of a strategy to be ready to leverage Department of Energy funds and loan guarantees for critical mineral projects under Title 17,” a federal program through which Congress authorized as much as $290 billion to finance energy and infrastructure projects nationally.

“AIDEA qualified as a State Energy Financing Institution or SEFI to gain easier access to these federal funds and a more advantageous matching rate which could run as high as 95% Fed to 5% SEFI,” AIDEA said in a statement provided by a spokesperson.

Some legislators, including Rep. Frank Tomaszewski, R-Fairbanks and author of HB 122, said they didn’t oppose the AIDEA amendment, but they were outvoted by members of the committee who said they needed more certainty about what the AIDEA money would buy.

The investment bank has not presented a plan to lawmakers that indicates which of the state’s many mining and mining-related projects might receive state funding.

“I get a little testy when, as a separate branch of government, we see our appropriation powers being taken from us, being abrogated,” said Rep. Bryce Edgmon, I-Dillingham. “And I have no idea what’s behind this. Three hundred million dollars! Wow. That is wild. No plan, nothing.”

The final vote to remove the AIDEA funding was 7-4, and HB 122 advanced to a vote of the full House with just the railroad’s request included.

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Originally published by the Alaska Beacon, an independent, nonpartisan news organization that covers Alaska state government.