Legislature(2011 - 2012)BARNES 124
03/24/2011 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB196 | |
| HB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 196 | TELECONFERENCED | |
| *+ | HB 170 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 196-BULK FUEL LOANS/POWER PROJECT FUND
8:07:46 AM
CHAIR MUNOZ announced that the first order of business would be
HOUSE BILL NO. 196, "An Act relating to the power project fund
and to the bulk fuel revolving loan fund; establishing a bulk
fuel loan account and making the bulk fuel loan account and the
bulk fuel bridge loan account separate accounts in the bulk fuel
revolving loan fund; providing for technical assistance to rural
borrowers under the bulk fuel bridge loan program; relating to
the administration and investment of the bulk fuel revolving
loan fund by the division in the Department of Commerce,
Community, and Economic Development responsible for community
and regional affairs; and providing for an effective date."
8:07:53 AM
REPRESENTATIVE BRYCE EDGMON, Alaska State Legislature, sponsor
of HB 196, explained that HB 196 would [move the] Bulk Fuel
Revolving Loan Fund Program (BFRLF) to the Division of Community
& Regional Affairs (DCRA), which already houses the Bulk Fuel
Bridge Loan Program, in order to make it easier for applicants
to access the BFRLF. Currently, if an applicant is denied by
the BFRLF, the applicant would have to submit a separate
application for the Bulk Fuel Bridge Loan Program. However,
under the proposal in HB 196 both programs would be housed in
DCRA and an applicant could submit one application for both.
Furthermore, housing both programs with DCRA provides the
ability to use local government specialists that are scattered
throughout the state. Representative Edgmon pointed out that HB
196 does have a fiscal note, the detail for which he deferred to
staff.
8:10:26 AM
KATHIE WASSERMAN, Executive Director, Alaska Municipal League
(AML), related that AML is in favor of HB 196 as it has actually
experienced the problems HB 196 addresses. In fact, AML has
observed that much of the hindrance in getting fuel to some of
the communities was because of the gap in time between obtaining
information from the Alaska Energy Authority and getting it to
DCRA/DCCED, which resulted in fuel being shipped in via plane at
an increased cost. Ms. Wasserman mentioned that AML has a good
relationship with DCCED and is able to discuss municipalities,
but that same type of relationship doesn't exist with AEA.
Therefore, AML encourages the passage of HB 196 to make things
more efficient and effective for municipalities.
8:12:10 AM
DEL CONRAD, CEO, Rural Alaska Fuel Services (RAFS), provided the
following testimony:
I am here today to speak in favor of HB 196. Since
its inception in 2004 RAFS has managed the Bulk Fuel
Bridge Loan Program, helping roughly 30 communities
finance their annual fuel supplies. These borrowers
are in significant financial distress, and therefore
ineligible for loans from other sources. As part of
the program, we not only provide funding for fuel
purchases, we actively engage with the borrowers -
assisting them in setting appropriate pricing,
establishing credit and collection policies, and even
holding community meetings to explain fuel and power
costs to the residents. There are currently 11 loans
for about a total of $1.6 million outstanding in the
Bridge Loan Program. We believe that combining the
two state fuel loan programs will provide more
efficiency by reducing administrative costs and
complexity for both the loan program and the
borrowers. By combining the program [there would be]
one application and one review process instead of two
as we do now. Essentially, the Bridge Loan Program
would become similar to a work out group in a bank,
working with the distressed borrowers to improve their
pricing, collections, and cash flow. Equally
important, we believe, is the provision that allows
for the program administration to be outsourced. The
case for this was best made by the Institute for
Social and Economic Research (ISER) at the University
of Alaska in their report titled "Components of Alaska
Fuel Cost: An Analysis of the Market Factors and
Characteristics that Influence Rural Fuel Prices."
This report was prepared at the request of the Senate
Finance Committee and released in February of 2010.
In their discussion of fuel financing programs, it
stated the following: "Consolidating the Bulk Fuel
Revolving Loan and RAFS bulk fuel program would
improve operational efficiency, which could free
administrative costs and be shifted to loan
capitalization." The Bulk Fuel Bridge Loan Program
appears to be both a more effective and efficient
program. It's more effective because of the condition
of receiving a state subsidized loan, the community,
borrower, receives fuel sales operations and
management training to help the community learn how to
collect sufficient revenues to purchase fuel without a
loan in the future. It appears to be more efficiently
administered through a contract with a not-for-profit
organization.
8:14:45 AM
REPRESENTATIVE SADDLER inquired as to what specific community or
situation this proposed change would help.
MR. CONRAD explained that currently, a community must file an
application for the BFRLF with AEA. If that applicant is
rejected by AEA, the applicant must file another application
with RAFS, the manager of the program, for review. Upon RAFS
forwarding the application to DCRA, it's approved and financed.
Therefore, both the state and borrower proceed through the
process twice and at times a considerable amount of time is
required. In further response to Representative Saddler, Mr.
Conrad said he wasn't aware of any circumstance in which fuel
had to be flown in because of the delay. However, he did recall
situations in which there was a rush to approve Bulk Fuel Bridge
Loans before the barge left.
8:16:42 AM
REPRESENTATIVE GARDNER related her understanding that using RAFS
to administer the program isn't anything new.
MR. CONRAD noted his agreement, and reiterated that RAFS has
managed the Bulk Fuel Bridge Loan Program since it began in
2004.
8:17:15 AM
REPRESENTATIVE CISSNA recalled that in 2008 Nikolai had to fly
in fuel due [to the delay in funding].
MR. CONRAD recalled that that the situation with Nikolai was
some time ago and that the community obtained funding from
elsewhere, [not from the BRLF].
8:18:25 AM
PATRICK PLETNIKOFF, Mayor, City of Saint George, related his
support for HB 196. The City of St. George has worked with the
RAFS program as the city and the surrounding community has
struggled to improve the city's position in terms of its
economic base. Although St. George sits in the middle of the
greatest fishery in the world, it doesn't have an economy.
Therefore, the city has to utilize programs that may be
difficult with which to work. He related support for the
proposed consolidation of the DCRA and RAFS programs because it
would simplify the process. Currently, the City of St. George
has to first go through the AEA process, which usually rejects
the city because of fiscal constraints or other issues. The
City of St. George then prepares another application to submit
to RAFS. If there's a delay, the city and its residents face a
hardship because they don't have the credits/or money available
to purchase the fuel to keep the city's power plant going. The
city has been working with RAFS and since 2010 the city has
attempted to correct its problems. He noted that although the
City of St. George hasn't participated in the power cost
equalization (PCE) program for some time, it's critical to the
community and its ability to purchase fuel for its power plant.
Mayor Pletnikoff related that there have been times when the
City of St. George had to have fuel flown in from Anchorage,
which ultimately costs $12-$14 per gallon. In conclusion, Mayor
Pletnikoff reiterated his support for HB 196 and pointed out
that utilizing a program such as RAFS would provide the
necessary flexibility to design financing packages and a program
that helps get the community on its "fiscal feet."
8:21:42 AM
CHAIR MUNOZ inquired as to the fuel storage capacity for St.
George and the length of time that capacity generates energy.
MAYOR PLETNIKOFF informed the committee that Delta fuels and the
village corporation in joint venture manage the fuel operations.
Although there is a million gallons of storage capacity
available, it was taken out of service and only about 120,000
gallons in capacity is available. The joint venture tries to
keep the capacity full. However, bad weather can be an obstacle
for delivery and can create a hardship.
8:22:53 AM
MEERA KOHLER, President & CEO, Alaska Village Electric
Corporation (AVEC), began by relating that AVEC is a utility
that serves 53 villages throughout Western Alaska and is an
energy partner with the Denali Commission. She further related
that in the last 10 years, AVEC has built energy infrastructure
totaling over $200 million in villages that AVEC serves. Ms.
Kohler informed the committee that AVEC was instrumental in
establishing the Rural Alaska Fuel Services in 2003. The intent
of RAFS was to provide fuel tank farm services and support in
rural Alaska throughout the state. In May 2004, AVEC was
approached by the administration and established the original
Bulk Fuel Bridge Loan Program, primarily to deliver fuel to
those communities that had a week or two left in the season
otherwise the fuel would have to be flown in. At that point,
AVEC identified RAFS as its partner to administer the program.
Two years later, AVEC withdrew from the program, which allowed
RAFS to operate the program entirely. She noted that RAFS has
done a fine job administering the program. As a regional
organization that involves Western Alaska, she chaired a
committee reviewing the fuel supply situation for village
Alaska. Early on, the complex and laborious process communities
must follow in order to participate in the BFRLF Program was
targeted. As was mentioned earlier, there is a duplicative
process whereby a community has to apply to AEA first, although
it knows it will be rejected because it has an outstanding loan
balance or something of that nature. At that point, the same
process has to occur with RAFS. Therefore, it's sensible to
combine the two programs and streamline them such that a
community can file a single application. In conclusion, Ms.
Kohler related support for the intent of HB 196, and offered her
assistance with the process.
8:26:10 AM
REPRESENTATIVE SADDLER pointed out that the committee packet
includes materials relating that combining the two programs
would provide additional efficiencies and advantages.
Therefore, he asked if she would characterize HB 196 as a step
toward that.
MS. KOHLER answered that HB 196 is a good step in that direction
and would move toward streamlining operations, the process, and
make it easier for the communities. Ms. Kohler related her hope
that DCRA will ultimately take over both programs and contract
out [the administration of it] to an entity such as RAFS, an
entity that's definitely qualified to administer the program.
8:28:19 AM
DOUG IHLY, Tribal Administration, Chignik Lake Traditional
Council, Chignik Lake Village, informed the committee that
Chignik Lake has been working with RAFS for a couple of years
and it has been a pleasant experience. In fact, Mr. Conrad has
worked with the village to help determine the necessary charges
for fuel and gas as well as working on the electric utility.
He, too, agreed with the proposal to combine [programs] and
eliminate duplication. He recalled when Chignik Lake applied
with AEA for a loan, the village was fairly sure it wouldn't get
one. However, they knew it was necessary to do prior to
applying with RAFS. Still, it takes time. In fact, this last
year he was concerned that the process wouldn't be completed in
enough time to have the fuel delivered. Mr. Ihly explained that
the village has to wait for its commercial fishermen to finish
with the fishing season before fuel can be hauled in, which
results in a limited window between that time and when the river
freezes. Therefore, it's critical that the loan is in place and
the village is able to purchase the fuel necessary to sustain it
through the winter. He noted that recently the village was two
to three weeks away from having no fuel, but the river broke up
and the village was able to have fuel delivered.
8:31:36 AM
SCOTT RUBY, Director, Division Programs, Division of Community &
Regional Affairs, Department of Commerce, Community & Economic
Development (DCCED), reminded the committee that the division
currently administers the Bulk Fuel Bridge Loan Fund Program and
has since its inception. Furthermore, the division works
closely with AEA on the BFRLF. He explained that there were two
loan programs because in 2004 communities didn't qualify for the
BFRLF program and were in danger of not having fuel. At that
time, those communities that couldn't get fuel would be placed
in an emergency situation and thus the state would spend
resources in a more critical situation to provide for the health
and safety of the communities. The notion was to help these
communities normalize such that they receive the fuel and are
more responsible for having their own fuel. At that time,
rather than amending the BFRLF, funding was made available for
the Bulk Fuel Bridge Loan Program. The name, Bulk Fuel Bridge
Loan, was derived from the fact that the funding provided a
bridge such that a community's management capacity could be
built to qualify for the AEA loan or regular commercial loan
programs. The program operated that way for several years and
was funded through several grants, including grants from the
U.S. Department of Agriculture (USDA), the Denali Commission,
and the state. When the Bulk Fuel Bridge Loan Program began,
the administration of that program was contracted out to AVEC
and ultimately to RAFS. Therefore, the state approved all the
loans, while RAFS serviced all the loans. A couple of years
later, a legislative audit was performed that determined the
situation was unacceptable because state funds were being used,
but there were no state regulations for the program. In 2008,
there was a statutory change such that funds were brought into
the state system and regulations, similar to what AEA has for
BFRLF, were adopted. Furthermore, the state contracts with
RAFS, which provides the outreach and technical assistance such
as invoicing. The loan disbursements and tracking of the loan
balances is done by the Division of Economic Development. Mr.
Ruby highlighted that over the years AEA and DCRA have worked on
the two applications and they have reached a point at which they
are almost identical. In fact, applicants are told to make a
photo copy of the AEA application. The only difference between
the two applications is the promissory note and the fuel loan
agreement where the entity with which the community is making
the agreement is either AEA or DCRA. He acknowledged though
that there is redundancy since communities have to submit two
different applications to two different entities and it's
burdensome that the communities have to certify and the board
has to consider two different submissions of two different
applications. Therefore, HB 196 would address the
aforementioned such that there would be only one application
that's filed.
MR. RUBY informed the committee that a major point in previous
legislation was the interest rate. Under the BFRLF, AEA charges
an interest rate for its loans. He explained that AEA uses a
statutory formula with an indexed rate and those communities
with multi-year loans are given a discount. The Bulk Fuel
Bridge Loan, on the other hand, has a 0 percent interest rate.
The Bulk Fuel Bridge Loan is going to communities that are a bad
credit risk or are having management difficulties in financing
their loans. Therefore, the notion behind the Bulk Fuel Bridge
Loan was that the 0 percent loan would help such communities and
as the Bulk Fuel Bridge Loan Program built capacity, these
communities would qualify for other loans. Mr. Ruby noted that
there has been discussion that the 0 percent interest loan is a
disincentive to improve management. To address the
aforementioned, under HB 196 both loans would have an interest
rate such that a first-time borrower would have an interest rate
of 0 percent while a second-year borrower would have a 4 percent
interest rate. If the borrower has good credit in subsequent
years, the interest rate is reduced by 1 percent each year with
a floor of 2 percent, so long as the borrower remains in good
standing. Therefore, the legislation creates an incentive to
maintain good management. Mr. Ruby told the committee that
currently both programs fund their administration from the
general fund (GF), but HB 196 proposes to fund the
administration of the programs from the loan fund itself and
thus it's a self-supporting system. The interest rate was set
such that the interest from the repayment of the loans or from
the interest generated by the funds is more than enough to cover
the administrative costs.
MR. RUBY then turned to the earlier remarks regarding Nikolai.
He informed the committee that the earlier discussed situation
in Nikolai was one in which the barge couldn't get there because
the water level was too low. At the time, Nikolai had
management capacity issues as the community hadn't been holding
municipal elections for some time and thus hadn't qualified for
its community revenue sharing payments. The DCRA regional
office staff worked with Nikolai to complete an election, file
paperwork, and got the city's budget and financial statements
filed. The aforementioned resulted in the release of Nikolai's
community revenue sharing funds, which provided a way in which
to pay for the fuel since it had to be flown in. He emphasized
that the situation in Alaska is unique since the fuel is
delivered once a year by water or plane. Therefore, these
communities require very large capacity to store fuel, which
results in a large cost to fill up. He related that North Star
Fuel has been tracking fuel prices, which it reported as the
highest in the last three years. Mr. Ruby concluded by stating
that fuel loan programs for rural Alaska are critical in
maintaining their infrastructure.
8:42:00 AM
REPRESENTATIVE AUSTERMAN pointed out that AEA's fiscal note
relates a decrement of $53,000 and DCRA's fiscal note relates a
cost of $80,000, which results in a $30,000 increase in cost to
achieve the earlier discussed streamlining and efficiencies to
the loan programs.
MR. RUBY explained that currently DCRA receives $219,000 in GF
each year, although none of it is used by DCRA to administer the
program. Those funds are either provided through a reimbursable
services agreement (RSA) to the Division of Economic Development
for management servicing of the loans or it's contracted out to
RAFS to provide technical assistance. Therefore, the fiscal
note is misleading because DCRA staff time that is used to
administer the program is not reflected in the administrative
funds DCRA specifically receives to administer the program. He
deferred to AEA staff to explain its fiscal note and how the
program is administered. Mr. Ruby related that in actuality the
funds received from the GF to administer the program is less
than what is used by the agencies to administer the program
currently. He opined that the aforementioned is the difference.
Furthermore, all the funds are coming from the GF. He
reiterated that under HB 196 the program would be funded and
paid for from the loan fund and its interest, and thus there
would be a decrement of about $260,000 to the GF.
8:45:20 AM
REPRESENTATIVE CISSNA pointed out that the situation in Nikolai
reflects what is happening in many communities. She related her
understanding that the lowering of the water table has been
attributed to the reason the Kuskokwim River doesn't reach as
far as it once did, which has resulted in even the community of
McGrath experiencing problems with receiving barges.
MR. RUBY acknowledged that over the last two summers McGrath has
experienced problems receiving barges late in the season.
However, he said he didn't know to what to attribute that. He
noted that there have been some significant challenges receiving
barges in the Dillingham region, particularly to Ekwok.
REPRESENTATIVE CISSNA pointed out that why these changes are
happening isn't being reviewed. She also highlighted the
environmental and technical changes and the out migration from
villages that are occurring as well. There's enough change
occurring that the state needs to determine how to review the
entire fuel issue, she opined. Although the state helps with
these difficulties, the state does things that aren't
sustainable. For instance, to these communities the state sends
equipment that requires diesel fuel. The state isn't looking at
the long-term and being analytical about it, she charged.
Therefore, she inquired as to what is being done to understand
this situation.
MR. RUBY deferred to the energy experts to answer the question
regarding the efforts to supplant diesel. However, he related a
critical piece of that is the technical assistance that builds
management capacity, which doesn't discriminate based on the
type of energy being used. Whether it's diesel or wind energy,
there is turn over in technical staff with basic management
skills for those systems. Through DCRA and its local governance
specialist as well as through the contract with RAFS, technical
capacity is built so that the local [staff] know how to price
fuel properly, no matter the type of energy being used.
Therefore, [the program] includes building the technical
capacity in communities, which is transferrable to running any
energy source or a local government, for that matter.
8:51:28 AM
REPRESENTATIVE SADDLER referred to ISER's analysis of rural
Alaska's fuel markets. The analysis makes some recommendations,
including co-locating the BFRLF and the Bulk Fuel Bridge Loan
programs. He asked if the legislation includes the ISER
recommendation to make applications valid for three years. He
then asked if communities routinely have an application on file
for the program. The ISER analysis also recommends that
expansion of the RAFS training could avoid communities becoming
dependent on the loan programs. He asked if anything in HB 196
accomplishes the aforementioned. Representative Saddler then
inquired as to the effect of HB 196 removing the requirement of
the local governing body to endorse an application for the loan
programs.
MR. RUBY specified that HB 196 would require an annual
application. Since it's the same application year-after-year,
communities are encouraged to refer to the prior year's
application and they don't keep a copy on file. He informed the
committee that AEA deals with about 60 communities under its
loan program; communities that are more capable and credit
worthy and which no one hears about. The communities with
problems who have been referred to the Bulk Fuel Bridge Loan
Program vary from 11-18 communities. He noted that for a large
number of communities serviced under this program [the process]
is routine and there aren't issues. With regard to the
recommendation to expand RAFS training, Mr. Ruby anticipated the
continuation of the technical assistance program under HB 196.
Although the legislation doesn't specifically relate that the
training will be expanded, he related the potential of
expanding, particularly since DCRA is continually reviewing the
program to improve service. However, an expansion would be
dependent upon the resources available and the need. Speaking
to the removal of the requirement of the local governing body to
endorse an application for the programs, Mr. Ruby related his
understanding that it was removed because it was an extra step.
To his knowledge, there has been only one application that
wasn't approvable by AEA because the application didn't receive
the local governing body's endorsement. He said the removal of
the endorsement was part of the streamlining effort,
particularly since it was such an infrequent problem.
8:55:48 AM
SARA FISHER-GOAD, Executive Director, Alaska Energy Authority
(AEA), Department of Commerce, Community & Economic Development,
explained that part of an employee's time is utilized to manage
this program, which is seasonal. The late summer and fall is
when the bulk of the applications for the program arrive. With
regard to AEA's fiscal note, she explained that AEA has had a
long-standing funding source for the BFRLF in the amount of
$53,000. The aforementioned funding would be reduced and no
longer be included in AEA's operating budget. The fiscal note
also reflects the proposal in HB 196 to remove the ability for
the loan program to have a fee structure associated with it.
Therefore, the $25 application fee and the loan origination fee
of the BRLF would no longer be part of the program. Ms. Fisher-
Goad then thanked the sponsor for working with AEA and Mr. Ruby
to develop a consolidated program, which was highlighted in the
governor's energy report as was the elimination of the
incongruent interest rates between the two programs.
8:58:33 AM
CHAIR MUNOZ asked then if what Ms. Fisher-Goad described
accounts for the $80,400 difference in the fiscal note.
MS. FISHER-GOAD said that she didn't believe that was quite the
connection. The AEA fiscal note merely reduces the funds AEA
would have available to it in its operating budget and the
[lack] of fees as well. With regard to interest rate estimates,
Ms. Fisher-Goad related that the intent is for the interest
earnings from the program to fund the program.
CHAIR MUNOZ related her understanding that AEA's fiscal note
shows a reduction in revenue in the amount of $53,000 and DCCED
shows an increase in revenue in the amount of $80,000 by 2013.
She inquired as to the difference.
8:59:49 AM
REPRESENTATIVE AUSTERMAN said that the $53,000 in AEA's fiscal
note is for services. Therefore, he inquired as to who is
paying the $53,000.
MS. FISHER-GOAD explained that the $53,000 is a BFRLF funding
source in AEA's operating budget, and thus the expenses pay for
staff time devoted to managing the program. The funding source
is the BFRLF.
9:00:47 AM
MS. FISHER-GOAD then pointed out that HB 196 references the
Power Project fund. She informed the committee that prior to
AEA receiving a significant capital appropriation to capitalize
the BFRLF structure, AEA was concerned that it would run out of
money to commit to loans. At the time, the Power Project Fund
had significantly more cash available than it would use.
Therefore, AEA structured a process by which the BFRLF could
borrow from the Power Project Fund if necessary. Shortly after
that, AEA received an injection of cash and thus there is no
need for the BFRLF to borrow from the Power Project Fund.
Therefore, HB 196 deletes that portion of statute as it's no
longer necessary.
9:02:04 AM
REPRESENTATIVE CISSNA pointed out that the state doesn't have a
long-term fiscal program and the state isn't looking at rural
areas in terms of the resources that could be developed in those
areas. She expressed interest in analyzing fuel cost increases
in terms of the health and social impacts to those in rural
Alaska. She asked if there are any efforts to address the long-
term problems [related to fuel costs and heating rural Alaska].
MS. FISHER-GOAD, regarding long-term programs, pointed out that
AEA manages the Renewable Energy Fund Program. That program and
AEA's effort on energy planning identifies where there are
available local resources that could be developed to provide an
alternative to the importation of diesel fuel. However, diesel
fuel is an important part of the energy resource for rural
Alaska, particularly in those areas with no other alternative.
For those communities that must use diesel, AEA ensures that the
powerhouses run as efficiently as possible and that the
communities have access to the BFRLF or the Bulk Fuel Bridge
Loan Program in order to ensure the communities have a long-term
supply of fuel. Ms. Fisher-Goad opined that although she didn't
believe 100 percent diesel displacement will be achieved in the
communities eligible for the bulk fuel programs, efforts are
being made to ensure there is less dependency on diesel fuel
where possible.
9:07:48 AM
CHAIR MUNOZ inquired as to how long it will take to make the
changes proposed in HB 196.
9:08:01 AM
ADAM BERG, Staff, Representative Bryce Edgmon, Alaska State
Legislature, pointed out that the transition provision in
Section 10 of HB 196 would allow DCRA to start adopting
regulations in order to meet the January 1, 2012, effective
date.
9:08:43 AM
REPRESENTATIVE GARDNER expressed concern with the elimination of
the requirement to receive an endorsement from the governing
body. If a utility can take on debt that impacts everyone in
the community, there should be a process by which the members of
the community would at least be made aware of it and participate
in the decision.
MR. BERG said that he doesn't disagree. That particular
language was suggested by DCCED. If the committee wishes to
change the provision, the sponsor wouldn't have a problem with
it, he said.
9:09:55 AM
REPRESENTATIVE CISSNA noted her agreement with Representative
Gardner. She then questioned if someone could discuss further
why the requirement was eliminated.
MR. RUBY informed the committee that originally the requirement
to have an endorsement from the governing body was included
because the BFRLF had limited funds. There was concern that
there would need to be prioritization, over which the local
government would have some influence. The requirement was also
adopted for the Bulk Fuel Bridge Loan Program because it
utilized the existing statutory language for the BFRLF. He
noted that not all of these loans are awarded to a governmental
entity; some loans are private entities. He recalled a
situation in which a private entity sought a loan, but the local
government refused to pass the resolution. Therefore, the
private entity wasn't eligible to receive the loan and had to
seek funding elsewhere. Mr. Ruby said that although DCCED isn't
necessarily opposed to the requirement to have an endorsement
from the governing body, one of the mandates was to streamline
the bulk fuel program.
9:12:25 AM
REPRESENTATIVE GARDNER inquired as to Representative Dick's
opinion on the elimination of the requirement of the utility to
have an endorsement of the governing body.
REPRESENTATIVE DICK said that it would be nice if the local
utility didn't have to work with the local government because
sometimes there is an impasse between the two.
REPRESENTATIVE GARDNER opined that an individual who objects to
the actions of the utility would have no recourse if there is no
governmental involvement.
REPRESENTATIVE CISSNA reminded the committee of the earlier
discussed situation in Nikolai when it had failed to hold an
election. She interpreted that as supporting the need to be
sure that communities have the democratic process so that there
is broad representation of the community. The state, she
emphasized, is pouring money into these communities such that
they can't make their own decisions.
REPRESENTATIVE DICK remarked that he is struggling because he
can see both sides. He agreed that it's important to have the
utility responsive to the community, but there are some
communities that have such dysfunction and the utility needs to
continue to function.
9:17:06 AM
CHAIR MUNOZ announced that HB 196 would be held over and public
testimony would remain open.
9:17:31 AM
REPRESENTATIVE CISSNA suggested that perhaps the legislation
could specify that a private entity would not have to have that
community buy-in. She then asked if the passage of HB 196 has
an element of timeliness.
9:18:16 AM
REPRESENTATIVE SADDLER recalled testimony in the House Special
Committee on Energy from the Denali Commission relating that
there are communities in the state with bulk fuel farms that are
operated by private enterprise as well as publicly supported.
He said he could see the inherent conflict the aforementioned
would raise.
9:18:34 AM
REPRESENTATIVE DICK said that he would call his communities.
9:18:45 AM
CHAIR MUNOZ announced that HB 196 would be held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB170-CCED-DCRA-03-18-11.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Fire Chiefs Assn Support Letter.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Girdwood Member Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| NFIB HB170.PDF |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Salcha Fire Rescue Support Letter.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Hollis Member Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Hanies Asst Chief Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
|
| HB196 repealer statutes.docx |
HCRA 3/24/2011 8:00:00 AM |
HB 196 |
| HB196repealstatutes.docx |
HCRA 3/24/2011 8:00:00 AM |
HB 196 |
| Haines Asst. Chief support HB 170.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Valdez Member Major Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| HB 170 Letter 3-23-11 CES.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Chena Member Solomon Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| CGFR-support-for-HB170.pdf |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Alaska Professional Volunteers Support Letter.txt |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |
| Alaska Firefighters Assn Support Letter.tif |
HCRA 3/24/2011 8:00:00 AM |
HB 170 |