Legislature(2003 - 2004)
03/16/2004 05:45 PM EDT
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HB 485-ENERGY PROGRAMS & FUNDS CHAIR HEINZE announced that the first order of business would be HOUSE BILL NO. 485, "An Act relating to the powers of the Alaska Energy Authority to make grants and loans and enter into contracts; relating to the bulk fuel revolving loan fund; relating to the Alaska Energy Authority's liability for the provision of technical assistance to rural utilities; relating to the Alaska Energy Authority's investment of the power development fund; repealing the electrical service extension fund; and providing for an effective date." Number 0076 BECKY GAY, Project Manager, Alaska Industrial Development & Export Authority (AIDEA) and Alaska Energy Authority (AEA), explained that HB 485 relates to the powers of AEA and amends the AEA program. She pointed out that the legislation impacts the power project fund, which provides loans to local utilities and governments or independent power producers for the development or upgrade of power projects. This legislation would amend AEA by expanding the definition of a power project to include energy efficiency projects because under the existing statutory definition of eligible projects, AEA has had to deny applications for worthwhile projects. Additionally, this legislation will repeal the loan committee that reviews and approves loans from this fund, and therefore AEA will use the same credit approval process that AIDEA has successfully utilized for its credit program. MS. GAY pointed out that HB 485 also impacts the bulk fuel revolving loan fund program, which provides short-term loans to assist small rural communities in purchasing annual bulk fuel supplies. This legislation would authorize loans from the program to other entities, such as corporations, cooperatives, and joint ventures. Recently, the Department of Law interpreted the current statutory eligible borrowers to be only communities and natural persons. The change encompassed in HB 485 won't expand the definition of eligible borrowers beyond the long- standing practice, which includes other entities such as corporations. MS. GAY noted that HB 485 also provides that AEA may invest in its development fund. With concurrence of the Department of Revenue, the power development fund has been invested by AEA since 1993. This legislation proposed to confirm the aforementioned by providing the statutory authority to invest the fund. She noted that AEA would continue to remit all earnings of the fund to the general fund (GF). Ms. Gay highlighted that the legislation proposes amending the general powers of AEA by clarifying that AEA has the authority to manage various projects by issuing grants and contracts. By acting as an agent for rural communities, AEA manages power projects, bulk fuel projects, and alternative energy projects. The legislature has authorized the aforementioned through the appropriation process by providing AEA authority to receive and extend federal funds from entities such as the Denali Commission and the U.S. Department of Energy. Moreover, HB 485 specifies that AEA's statutory mandate to provide technical assistance may not be used as an independent basis for tort liability against AEA, although AEA would continue to be liable for negligence if it failed to use reasonable care in failing to use technical assistance. Lastly, HB 485 would repeal the inactive electrical service extension fund. Ms. Gay thanked the committee for the ability to testify in support of HB 485, and urged the committee's favorable action on it. Number 456 JIM McMILLAN, Deputy Director, Credit, Alaska Industrial Development & Export Authority (AIDEA) and Alaska Energy Authority (AEA), in response to Representative Dahlstrom, said that he was satisfied [with the legislation]. In response to Chair Heinze, Mr. McMillan explained that AEA is a public corporation "with a separate legal existence" that's governed by a board of directors. The board of directors is the same board that governs AIDEA. Of the five-member board, two are public members, one is the commissioner of the Department of Revenue, one is the commissioner of the Department of Transportation & Public Facilities, and one - currently the commissioner of Department of Community & Economic Development - can be selected by the governor. Number 0590 REPRESENTATIVE KOHRING moved to report HB 485 out of committee with individual recommendations and the accompanying fiscal notes. There being no objection, it was so ordered.