Legislature(2003 - 2004)

03/16/2004 05:45 PM EDT

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= 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.                                                                            
                                                                                                                                

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