Legislature(2017 - 2018)CAPITOL 17
02/07/2017 10:15 AM ENERGY
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|Presentation: Alaska Affordable Energy Strategy|
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
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.
|AEA Presentation for HENE - 2.7.17.pdf||
HENE 2/7/2017 10:15:00 AM
HENE 2/7/2017 10:15:00 AM
HENE 2/7/2017 10:15:00 AM