Legislature(2017 - 2018)BELTZ 105 (TSBldg)
04/10/2017 09:00 AM Senate LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| SCR10 | |
| HB81 | |
| HB157 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SCR 10 | TELECONFERENCED | |
| + | HB 81 | TELECONFERENCED | |
| + | HB 157 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 81-AK ENERGY EFFICIENCY LOANS: ELIGIBILITY
9:12:10 AM
CHAIR COSTELLO announced the consideration of HB 81. She stated
that the intention is to hear the introduction, take questions,
open public testimony, and hold the bill for further
consideration. [CSHB 81(ENE) was before the committee.]
9:12:38 AM
JOHNATHON KREIS-THOMPSON, Alaska State Legislature, sponsor of
HB 81, introduced the legislation speaking to the following
sponsor statement:
This bill gives nonprofit organizations and federally-
recognized tribes the power to apply for loans from
the Alaska Energy Efficiency Revolving Loan Fund.
Because AEERLF is such a god-awful acronym, we call
this bill the More Energy Efficient Buildings Act
("MEEBA").
The AEERLF was created by the Alaska Sustainable
Energy Act in 2010. It authorized the Alaska Housing
Finance Corporation to make $250 million in low
interest loans for energy efficiency improvements to
public entities, namely municipalities and school
districts. Only one loan has been closed since the
program's creation in 2010, to the City of Galena for
$2.6 million.
Especially given our new and more austere fiscal
climate in which legislative grants are going to be
rare to nonexistent, many nonprofits are interested in
becoming more self-sufficient, and accessing loans
from the program to invest in energy efficiency. These
projects allow them to save money on energy costs,
make the state money in interest, create jobs, and
stimulates the economy. Recognizing these clear
benefits, the MEEBA authorizes Alaska Housing to
accept applications from non-profits, regional housing
authorities, and federally recognized tribes to invest
in energy efficiency.
The More Energy Efficient Buildings Act improves
energy efficiency in Alaska. It's an economic
stimulator, makes the state money, and helps create a
public benefit for a state program that's presently
underused.
9:14:55 AM
REPRESENTATIVE KREISS-TOMKINS noted that HB 81 passed the other
body by a 35:1 vote.
CHAIR COSTELLO asked Ms. Wilber to walk through a sectional
analysis for HB 81.
BERETT WILBER, Staff, Representative Kreiss-Tomkins, Alaska
State Legislature, delivered the following sectional analysis
for HB 81.
Section 1 requests the Alaska Housing Finance
Corporation to include a report of activities under
the Alaska Energy Efficiency Revolving Loan Fund in
their annual report.
Section 2 adds federally recognized tribes, regional
housing authorities, and non-profits to the list of
entities that can be offered loans through the Alaska
Energy Efficiency Revolving Loan Fund.
Section 3 is a conforming change to existing law which
adds tribes to the current loan enforcement terms.
Under this section, tribes would join the list of
entities which agree to waive a sovereign immunity
defense as such a defense could be applied to an
energy efficiency loan.
Section 4 adds tribes and nonprofits to the list of
those authorized to borrow from the loan program.
Section 5 is a conforming change which adds the newly
eligible entities to existing laws, which lay out the
financial responsibilities of loan recipients to the
State of Alaska if they default on a loan.
Section 6 includes definitions for the bill, including
definitions for federally recognized tribes, regional
housing authorities, and nonprofits. Under this bill,
nonprofits that are designated as 501(c)(3), (c)(4),
(c)(6), (c)(12) and (c)(19) can apply for loans under
the Alaska Energy Efficiency Revolving Loan Fund.
Section 7 adds a provision to the bill that requires
the loan program to preference originally eligible
entities, which are municipalities, schools, and state
buildings, or the newly eligible entities. It also
expressly forbids for-profit entities from receiving
loans from the fund.
9:17:28 AM
CHAIR COSTELLO asked where the language is broadened to include
schools.
MS. BARRETT advised that schools are already eligible to apply
for these energy loan funds. She directed attention to the
language on page 2, line 17, and said that while the language
doesn't specifically mention schools, Legislative Legal agrees
that they are included.
CHAIR COSTELLO listed the individuals available to answer
questions.
SENATOR MEYER asked if just one entity had taken advantage of
the loan program.
REPRESENTATIVE KREISS-TOMKINS said that's correct. "It's
dramatically underused."
SENATOR MEYER asked why that the case.
REPRESENTATIVE KREISS-TOMKINS said his anecdotal assessment is
that entities have been accustomed to looking for grants or
getting money through capital projects. Why would you assume a
loan when there's free money? He opined that thought processes
are changing as people look to be more self-sufficient in this
more austere environment.
9:21:21 AM
SENATOR MEYER commented that the last sizeable capital budget
was in 2013 so it's surprising that the loan fund is so
underused. He asked if he sees this program as competition to
banks.
REPRESENTATIVE KREISS-TOMKINS said him thinks there will be
increased interest in the program going forward. The fact that
the first loan was taken out just last December supports the
notion that entities are realizing that free money is a thing of
the past and that the more austere fiscal environment is likely
here to stay. He explained that the loan program does not
compete with banks because the financing for the Alaska Energy
Efficiency Revolving Loan Fund is highly unique and banks don't
have an analog. The way the program works is that the structure
first needs an energy audit that identifies specific energy
efficiency improvements and the amount that the improvements
will save. The loan is based on the cost of the improvements.
SENATOR MEYER asked if he has an estimate of the number of
nonprofits and tribes that might apply for a loan.
REPRESENTATIVE KREISS-TOMKINS said he's speculating but a few
facts might inform what would happen if this becomes law. A
partnership in Fairbanks between the Denali Commission, Foraker
Group, Cold Climate Housing Research Center and others is
looking at energy efficiency improvements for nonprofits. That
pilot program was designed to look at the payback and cost
benefits of making these sorts of improvements. He said he knows
that those entities are interested in scaling this in the future
and have been involved in drafting and supporting the bill. He
pointed out that many of the nonprofits in Alaska have
relatively small budgets compared to a school district or
municipality and their loans would conceivably be just $20,000
to $50,000, but that size energy efficiency improvement would
proportionally make a big difference.
9:27:04 AM
SENATOR GARDNER asked if this applies to all nonprofits such as
churches and the Girl Scouts.
MS. WILBER clarified that the bill only applies to a specific
subsection of nonprofits. It specifically opens eligibility to
501(c)(3)s that include churches, religious, educational,
charitable, literary, and scientific groups; 501(c)(4)s that
include civic and social welfare organizations such as Lions and
Rotary Clubs; 501(c)(6)s that tend to be business leagues,
chambers of commerce, and industry umbrella organizations such
as the Alaska Pharmacist Association and the Alaska Truckers
Association; 501(c)(12)s that are mutuals and cooperative
associations like telephone and electrical cooperatives; and
501(c)(19)s that are organizations that have to do with past or
present members of the armed forces such as VFWs or American
Foreign Legions.
CHAIR COSTELLO asked Stacey Schubert to address the question why
schools and other nonprofits haven't taken advantage of the loan
fund.
9:29:29 AM
STACEY SCHUBERT, Director, Government Relations and Public
Affairs, Alaska Housing Finance Corporation (AHFC), Anchorage,
said she agrees with the sponsor's explanation. When the
legislation passed in 2010, authorizing AHFC to go to the market
and bond up to $250 million for the program, schools and other
public facilities had grant money available so they didn't need
to go to AHFC for a loan. As the fiscal climate has changed
there has been more interest in the program. For example, AHFC
worked with the Department of Transportation and Public
Facilities on projects they identified for public facilities,
but the department found less expensive funds from another
source. AHFC is participating with the Alaska Municipal League
and others to make sure they are aware of the program, she said.
9:30:36 AM
CHAIR COSTELLO opened public testimony on HB 81.
9:30:48 AM
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project
(REAP), stated that REAP supports HB 81. He said we are a
statewide nonprofit education advocacy group that has focused on
promoting renewable energy and energy efficiency for the last 13
years. HB 81 offers nonprofits and tribes an opportunity to take
advantage of this loan program. He said REAP estimates that
Alaskans collectively spend about $5 billion on heat,
transportation, and electricity each year. He estimated that
about 20 percent of the energy consumption could be saved
through energy efficiency. Keeping close to $1 billion in the
economy is a worthy goal. The nonprofits and tribes around the
state often reside in energy inefficient buildings. The
structure of the loans that AHFC is offering is something that
tribes and nonprofits could take advantage of. He urged the
committee to consider and move the bill forward.
9:32:42 AM
CHAIR COSTELLO closed public testimony on HB 81 and held the
bill in committee for further review.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 81 - Background Document - Memo Legal.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81 - Background Document - AEERLFP.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81 - Fiscal Note - DOR-AHFC.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81 - Sponsor Statement.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81 - Summary of Changes ver A to ver D.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81 - Support Letter - AAHA.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81 - Support Letters.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 81.PDF |
SL&C 4/10/2017 9:00:00 AM |
HB 81 |
| HB 157 - Fiscal Note.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |
| HB 157 - Sectional Analysis.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |
| HB 157 - Sponsor Statement.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |
| HB 157.PDF |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |
| SCR 10.PDF |
SL&C 4/10/2017 9:00:00 AM |
SCR 10 |
| SCR 10 - Fiscal Note.pdf |
SL&C 4/10/2017 9:00:00 AM |
SCR 10 |
| SCR 10 - Sponsor Statement.pdf |
SL&C 4/10/2017 9:00:00 AM |
SCR 10 |
| HB 157 - Support Letter - Div. of Insurance.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |
| HB 157 - Support Letter - AK Life & Health Guaranty Assoc..pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |
| HB 157 - Support Letter - ACLI.pdf |
SL&C 4/10/2017 9:00:00 AM |
HB 157 |