| What is AIDEA? |
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The Alaska Industrial Development and Export Authority, aka AIDEA, is a public corporation of the State of Alaska, constituting a political subdivision under the laws of the State. It was created by the Alaska Legislature to "promote, develop and advance the general prosperity and economic welfare of the people of Alaska, to relieve problems of unemployment, and to create additional employment" AIDEA accomplishes this through its Credit Programs and Development Finance Programs.
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| Why did the Legislature create AIDEA? |
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The short answer to this question is that the Legislature created AIDEA to provide financing for Alaskan businesses to expand the economy of the state and provide jobs for Alaska.
The long version of this question is that when AIDEA was created in 1967, it was envisioned to be a pass through conduit agency providing Alaskan businesses with lower interest rates offered by tax-exempt financing by having AIDEA issue a bond which was then purchased by others. Changes to the tax laws in the mid 1980’s dramatically changed the types of projects that are eligible for tax-exempt financing, however the Tax-Exempt Revenue Bond Program continues to help finance certain facilities at lower rates, based on the credit strength of the developer.
In 1979 and 1980, oil wealth began flowing into state coffers simultaneously with a downturn in the economy following the completion of the Trans-Alaska Pipeline System (TAPS). Legislation was enacted to expand the powers and financial capabilities of AIDEA to assist smaller businesses. The mechanism used to accomplish this was a capitalization of AIDEA with an existing loan portfolio (held by the Department of Revenue in the general fund) valued at approximately $166 million and $15 million in cash. Utilizing this newfound financial strength, AIDEA launched the Umbrella Bond Program (which is now the Loan Participation Program).
AIDEA’s Development Finance Program got its start in the mid-1980’s, when Cominco, in conjunction with NANA Regional Corporation, approached the state seeking assistance to develop the Red Dog Mine deposit. An approximately $128 million economic development loan portfolio held in the General Fund, was appropriated to AIDEA for this effort and the financial structure of the transaction resulted in the creation of AIDEA’s Development Finance Program.
Through the years, AIDEA’s mission has remained the same – encourage economic growth and diversification in Alaska by providing various means of financing and assistance to Alaska businesses. The programs, however, have changed based on the economy and the financing needs of businesses in Alaska.
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| Does AIDEA provide a dividend to the state? |
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Pursuant to Alaska statutes the AIDEA board is require to annually determine the amount of a dividend to be made available for appropriation by the legislature. The dividend made available by the board is to be not less that 25% and not more than 50% of AIDEA’s audited “net income” as defined by statute, for the fiscal year two years before the fiscal year in which the dividend is to be made. The dividend may not exceed unrestricted “net income.”
Since the dividend program began, AIDEA has made available over $178.1 million in dividends to the state general fund.
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Can I get a grant through AIDEA for my business? |
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AIDEA does not provide grants. All projects financed through AIDEA programs must be commercially viable and able to produce revenues to cover costs.
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| How are AIDEA and AEA related? |
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Pursuant to legislation enacted in 1993, the members of the board of directors of AIDEA also serve as the board of directors of the Alaska Energy Authority (AEA). AIDEA provides personnel services for AEA; however, AEA continues to exist as a separate legal entity. There is no commingling of funds, assets, or liabilities between AIDEA and AEA and there is no responsibility of one for the debts or the obligations of the other.
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| What is an OREO? |
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OREO stands for "other real estate owned"; It refers to real estate that AIDEA has in our portfolio due to a loan default. Individual properties in AIDEA OREO portfolio are available for sale to interested and qualified buyers.
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| How many people serve on AIDEAs board of directors? |
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AIDEA’s Board is made up of five people: two members of the public and three State Commissioners. The Governor appoints the members of the public to serve two year terms. The Commissioners of the Department of Revenue and the Department of Community and Economic Development make up two of the three Cabinet appointments, and the Governor appoints the additional Commissioner at his discretion. Currently, the Commissioner of the Department of Transportation and Public Facilities fills the discretionary Commissioner position.
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| Can AIDEA help me finance my business? |
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| AIDEA has a number of programs that provide financial assistance to Alaska’s business community.
Loan Participation Program AIDEA can provide up to 90% participation in a bank originated loan up to $20 million. The Loan Participation Program provides Alaskans with long-term financing for new or existing projects, or for the refinancing of existing loans.
Business and Export Assistance Program, AIDEA can guarantee up to 80% of a business loan originated through a commercial lender, not to exceed $1 million on the principal of the loan. Guarantees issued for export transactions guarantee both commercial and political risk.
Conduit Revenue Bond Program Program, AIDEA acts as a conduit for the issuance of either taxable or tax-exempt bonds to finance a project.
Rural Development Initiative Fund and Small Business Economic Development Program. The goal of these programs is to provide private sector employment by financing the start-up and expansion of businesses that will create significant long-term employment Both of these programs are administered by the Department of Commerce, Community and Economic Development, Division of Investments.
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