Legislature(2017 - 2018)CAPITOL 17
02/07/2017 10:15 AM House ENERGY
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| Audio | Topic |
|---|---|
| Start | |
| HB81 | |
| Presentation: Alaska Affordable Energy Strategy | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 81 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | TELECONFERENCED |
HB 81-AK ENERGY EFFICIENCY LOANS: ELIGIBILITY
10:21:53 AM
CHAIR WOOL announced that the first order of business would be
HOUSE BILL NO. 81, "An Act making an entity that is exempt from
federal taxation under 26 U.S.C. 501(c)(3), (4), (6), (12), or
(19) (Internal Revenue Code) and a federally recognized tribe
eligible for a loan from the Alaska energy efficiency revolving
loan fund; relating to loans from the Alaska energy efficiency
revolving loan fund; and relating to the annual report published
by the Alaska Housing Finance Corporation."
10:22:20 AM
REPRESENTATIVE SPOHNHOLZ moved to adopt Amendment A.4, labeled
30-LS0353\A.4, Nauman, 2/6/17, which read:
Page 1, line 1:
Delete "an entity that is"
Insert "certain entities that are"
Page 1, line 2:
Delete "a federally recognized tribe"
Insert "federally recognized tribes"
Page 5, line 8, following "Code)":
Insert ", but does not include an entity
organized with the primary purpose of owning,
operating, managing, or controlling a plant or system
for furnishing electric service by generation,
transmission, or distribution"
CHAIR WOOL objected for discussion.
10:22:57 AM
BERRETT WILBER, Staff, Representative Jonathan Kreiss-Tomkins,
Alaska State Legislature, explained that the proposed Amendment
A.4 resulted from discussions with the Alaska Housing Finance
Corporation (AHFC) and the Alaska Energy Authority (AEA). She
pointed out that 501(c)(12) non-profit organizations included
electric cooperatives. She reported that AHFC had expressed a
lack of expertise in its loan vetting process to offer energy
efficiency loans to power generators for the purpose of power
generation and distribution. She offered her belief that a
conceptual amendment could allow electric cooperatives to
receive efficiency loans for building envelope efficiencies, but
not allow for distribution to the power grid.
REPRESENTATIVE WESTLAKE asked for clarification that this was
specific to the efficiencies to each individual building.
MS. WILBER replied, "yes, that's correct in my estimation."
10:25:22 AM
REPRESENTATIVE WESTLAKE offered a conceptual amendment to the
proposed Amendment A.4, at the end of line 12, which read:
except when used for building end-use energy
efficiency improvements unrelated to the generation,
distribution or transmission of power or recovered
heat.
REPRESENTATIVE WOOL reiterated that the proposed conceptual
amendment to proposed Amendment A.4 would make funds available
for building envelope energy efficiencies, but not for power
generation.
REPRESENTATIVE WESTLAKE expressed his agreement and asked that
AEA further address the issue.
10:27:32 AM
CADY LISTER, Chief Economist, Alaska Energy Authority (AEA),
Department of Commerce, Community & Economic Development, stated
that AEA supported the proposed conceptual amendment. She
explained that AEA had the Power Project Loan Fund program which
offered financing for generation and transmission of energy
systems projects, as well as some efficiency measures. She
offered the belief that it was important to maintain lending to
the power generators, especially in Rural Alaska. She reported
that AEA staff had the technical capacity to assess and evaluate
the appropriateness and legality of a project. She explained
that there were many Environmental Protection Agency regulations
regarding the use of diesel fuel as prime power, that these
regulations changed often, and that the State of Alaska had
special waivers and exemptions.
CHAIR WOOL asked if AEA offered loans for building envelope
energy efficiency or simply for power distribution, generation,
and transmission. He opined that augmenting the AHFC loans for
efficiency would dovetail with the AEA program.
MS. LISTER offered her belief that it would dovetail.
REPRESENTATIVE SPOHNHOLZ asked for an at-ease for language
clarification to the proposed conceptual amendment in order to
avoid any unintended consequences.
10:30:39 AM
The committee took an at-ease from 10:30 a.m. to 10:33 a.m.
10:33:01 AM
CHAIR WOOL explained that the proposed conceptual amendment to
proposed Amendment A.4 stated that the loans could be used for
energy, building envelope, or consumption efficiency but not for
any power distribution, transmission, or generation.
REPRESENTATIVE SPOHNHOLZ reiterated the proposed conceptual
amendment, stating that it "does not include an entity organized
for the purpose of owning, operating, managing, or controlling a
plant or system for furnishing electric service by generation,
transmission, or service, except for the purposes of energy
efficiency of the building."
CHAIR WOOL added "or buildings that they may own."
10:34:19 AM
REPRESENTATIVE KREISS-TOMKINS, in response to Representative
Westlake, expressed his support for the proposed conceptual
amendment and declared that it was consistent with the intent to
improve energy efficiency.
[There being no objection, the proposed conceptual amendment to
proposed Amendment A.4 was adopted.]
10:34:42 AM
CHAIR WOOL removed his objection to Amendment A.4. There being
no further objection, Amendment A.4, as amended, was adopted.
10:35:24 AM
REPRESENTATIVE RAUSCHER moved to adopt Amendment A.2, labeled
30-LS0353\A.2, Nauman, 2/1/17, which read:
Page 5, line 14, following "section,":
Insert "(1)"
Page 5, line 15, following "enterprise":
Insert ";
(2) the corporation may not make a loan
under this section to a tax exempt entity, federally
recognized tribe, or regional housing authority if, at
the time of making the loan, the total amount of
outstanding loans under this section to tax exempt
entities, federally recognized tribes, and regional
housing authorities exceeds 10 percent of the total
amount of bonds the corporation is authorized to issue
to secure loans under this section."
CHAIR WOOL objected for discussion.
REPRESENTATIVE RAUSCHER explained that proposed Amendment A.2
would add language to limit the loan funds available to tax-
exempt entities, federally recognized tribes, or regional
housing authorities. He allowed that although the proposed
amendment stated a limit of 10 percent of the total amount, he
acknowledged that there had been discussion to increase this
amount to 30 percent. He stated that the limit would preserve
the loan funds available for use by municipal governments, as
intended by the original legislation in 2010.
10:37:19 AM
REPRESENTATIVE CLAMAN questioned the intent of the proposed
amendment, as testimony indicated that the existing fund had
only issued one loan in four years. He asked why there should
be a restriction on loan amounts when there was not an existing
demand.
REPRESENTATIVE RAUSCHER explained that, although the purpose of
proposed HB 81 was to generate a source for newer loans, it
should allow funds for the original intent of the program. He
stated that "just because they weren't used, doesn't mean they
won't be." He suggested that opening up use could drain and
deplete the fund, so that there would no longer be money
available for its original intent.
REPRESENTATIVE SPOHNHOLZ opined that the original legislation
still allowed for a priority to the originally intended
beneficiaries. She stated that the proposed bill was "widening
the net" and not putting non-profits in a position "of
essentially trumping pubic agencies for the benefit of these
services." She declared that this was an attempt to reduce
energy costs across the state and be more efficient with our
resources, especially as many of the non-profits were funded
through state government. She suggested that proposed Amendment
A.2 was "a solution in search of a problem."
CHAIR WOOL asked for AHFC to address the issue.
10:40:27 AM
STACY SCHUBERT, Director, Governmental Affairs & Public
Relations, Alaska Housing Finance Corporation, Department of
Revenue, stated that AHFC would be able to implement proposed
Amendment A.2, but that AHFC was neutral and had no preference.
CHAIR WOOL reflected that, in the history of the program, there
had only been two applicants resulting in one loan, and asked if
it was foreseeable for an increase in applications by those
tribal entities and non-profits addressed through proposed HB
81, or an increase in applications from public entities as the
availability of grants had decreased.
MS. SCHUBERT relayed that the original legislation allowed for
$250 million in funding, and that, should there be greater
necessity for funds, AHFC could ask the Alaska State Legislature
for an increase to the availability of loan funds.
REPRESENTATIVE CLAMAN asked if any municipalities had complained
about a lack of ability to apply for these funds.
REPRESENTATIVE RAUSCHER replied, no.
REPRESENTATIVE CLAMAN asked if any municipality had contacted
Representative Rauscher with concerns for the availability of
loan funds.
REPRESENTATIVE RAUSCHER replied, no.
10:42:54 AM
REPRESENTATIVE JOHNSON, reflecting on her time working in
municipal government as a mayor, acknowledged that she was not
aware of this loan fund. She offered her belief that this lack
of awareness could be wide spread, and, as a municipal
representative, she would want "a chance at the pot of money."
She suggested that most people were not aware of this loan fund.
CHAIR WOOL offered his belief that $250 million of bonding
ability was a large amount of money that was currently
underutilized. He reminded the committee that AHFC had stated
that more money could be requested if all of the loan fund was
committed. He opined that loans to all the aforementioned
entities would be a good thing, as energy efficiency and less
fuel consumption was a goal. He acknowledged that use of the
entire fund could be a problem, but "maybe not such a bad
problem."
10:45:03 AM
REPRESENTATIVE CLAMAN stated that he opposed proposed Amendment
A.2. He expressed his agreement with Representative Spohnholz
that this was "a solution in search of a problem." He opined
that the original intent of the legislation was to resolve
energy efficiency issues with funding, and limiting access to
the funds was a disservice to the communities.
10:46:50 AM
REPRESENTATIVE JOHNSTON asked about negotiation to the
percentage of the total amount of the bonds available to the
aforementioned entities.
REPRESENTATIVE RAUSCHER in response, explained that his intent
was to ensure there was money for the original intent of the
fund, and "not to limit anybody's ability to make any kind of
efficiency loans."
REPRESENTATIVE JOHNSTON offered her support for proposed
Amendment A.2, as there was a changing environment, and that
many public buildings would require greater efforts and more
money. She suggested that an increase to 30 percent of the
total amount of bonds was "a rather large number" and that it
was a good compromise to allow for the intent of the original
language.
REPRESENTATIVE RAUSCHER offered to renegotiate the percentage.
CHAIR WOOL allowed that there could also be renegotiation if all
the funds were depleted.
REPRESENTATIVE JOHNSON offered her support for proposed
Amendment A.2, stating that these were public buildings in the
public trust, paid for with public monies, and the fund had been
originally intended for public monies to be borrowed and paid
back. She stated that the original intent was fulfilling the
public trust, and that the proposed changes were enhancing
buildings in the private, non-profit sector.
CHAIR WOOL offered his belief that the proposed amendment did
not address privately owned buildings, only tribal entities and
non-profits.
REPRESENTATIVE KREISS-TOMKINS, in response, stated that
technically non-profit organizations were private, although they
had to satisfy public benefit and a public good.
REPRESENTATIVE JOHNSON clarified that a non-profit organization
was a private entity.
10:50:36 AM
The committee took a brief at-ease.
10:52:50 AM
CHAIR WOOL brought the committee back to order. He declared
that the objection to proposed Amendment A.2 had been
maintained.
10:53:00 AM
REPRESENTATIVE RAUSCHER offered a conceptual amendment to
proposed Amendment A.2 which would change the percentage of the
total amount of bonds on line 10 from 10 percent to 30 percent.
10:53:44 AM
REPRESENTATIVE CLAMAN stated that, although he did not oppose
the proposed conceptual amendment, he maintained his objection
to proposed Amendment A.2.
10:54:09 AM
A roll call vote was taken. Representatives Rauscher, Johnson,
and Johnston voted in favor of Amendment A.2. Representatives
Claman, Spohnholz, and Wool voted against it. Therefore,
Amendment A.2 failed the House Special Committee on Energy by a
vote of 3 yeas - 3 nays.
10:55:02 AM
The committee took a brief at-ease.
10:55:41 AM
CHAIR WOOL stated that proposed Amendment A.2 did not pass.
10:55:52 AM
CHAIR WOOL asked if there was consensus for passage of proposed
HB 81, as amended, out of committee.
REPRESENTATIVE CLAMAN reiterated that the original intent of the
proposed bill was to get energy efficient loans into the
community, and it was never intended to be specific to any
particular group. He pointed out that the municipalities had
not applied for the loans. He offered his belief that proposed
HB 81, as amended, was "100 percent consistent with the original
goal and intent of the original legislation which is to get
funds available for energy efficiencies throughout Alaska." He
declared his support of the bill.
REPRESENTATIVE JOHNSON stated that she was not in favor of
passing the bill out of committee. She reiterated that the fund
was a large amount of public funds for the public trust and
administered by a public entity. She offered her belief that
the intent of the bill was to further allow public buildings and
municipalities to upgrade facilities, so it would save public
money.
REPRESENTATIVE RAUSCHER expressed his agreement with
Representative Johnson.
10:57:51 AM
CHAIR WOOL stated that AHFC was a state entity which loaned
money to private individuals to buy homes and that this money
was also bonded for public buildings. He said that the proposed
bill opened the funding up to other entities as the fund had
been barely used although, he acknowledged, many municipalities
may not have been aware of the fund. Chair Wool said that he
would hold over HB 81.
| Document Name | Date/Time | Subjects |
|---|---|---|
| AEA Presentation for HENE - 2.7.17.pdf |
HENE 2/7/2017 10:15:00 AM |
|
| A.2.pdf |
HENE 2/7/2017 10:15:00 AM |
HB 81 |
| A.4.pdf |
HENE 2/7/2017 10:15:00 AM |
HB 81 |