Legislature(2005 - 2006)HOUSE FINANCE 519
02/09/2005 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB46 | |
| HB76 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 76 | TELECONFERENCED | |
| HB 61 | |||
| = | HB 46 | ||
HOUSE BILL NO. 46
An Act permitting grants to certain regulated public
utilities for water quality enhancement projects and
water supply and wastewater systems.
Representative Foster MOVED to ADOPT work draft 24-LS0313\Y,
Craver, 2/8/05, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
Co-Chair Meyer pointed out that two amendments had been
incorporated into the draft. The first clarifies that
utilities are owned and operated by a political subdivision
of the State. That language was amended in the Senate
Resource Committee. He noted that Representative Croft
presented Amendment #2, which addresses privately, owned
utilities not receiving capital gains.
TOM WRIGHT, STAFF, SPEAKER JOHN HARRIS, stated that the
Speaker has no objections to either amendment or the new
language in the version currently before Committee members.
Vice-Chair Stoltze inquired if language on Page 2, Lines 26-
28 was new. Mr. Wright advised that language resulted from
Representative Croft's amendment, however, was slightly
modified.
Representative Hawker understood that the intent was to
regulate a State or public investment in a utility,
regulated by the Regulatory Commission of Alaska (RCA).
The language implies that a public utility sold within ten
years of receiving a grant, ceases to be regulated and then
that grant has to be repaid. He thought that 10-years would
be too long of a window, understanding the number was not an
issue point. Representative Hawker recommended that the
number be changed to 5-years.
Representative Kelly agreed and supported the change. He
thought it would benefit the public by using matching
grants.
Representative Hawker MOVED a change to the committee
substitute, Page 2, Line 24, deleting "10" and replacing it
with "5" years. Co-Chair Meyer OBJECTED for discussion
purposes.
Representative Croft, (Testifying via Teleconference), asked
for an explanation of the proposed change. Representative
Hawker repeated that the language provides assurance that
public money benefiting a public utility is subject to
regulated rates. He questioned if 10-years provides an
appropriate restriction, assuming that the grants are to
benefit the public. He recommended 5-years.
Representative Croft agreed. The number was not determined
through any type of study. He commented that there could be
practical difficulty keeping it on the books too long. He
added that he did not want to see it become a State grant
that moved quickly for individual or private gain.
Representative Weyhrauch asked what would happen if the
public utility was sold to a non-regulated utility within
the 5 years. Representative Hawker explained that it would
only be affected if a non-regulated utility were sold.
Representative Weyhrauch inquired historic precedence for
that.
JIM STRANDBERG, (TESTIFIED VIA TELECONFERENCE),
COMMISSIONER, REGULATORY COMMISSION OF ALASKA, ANCHORAGE,
responded to the question. He indicated that in the six
years that he had been with RCA, they had processed many
ownership changes, however, he could not provide specific
data. Mr. Strandberg stated that certificate transfers
almost always come before the RCA if it is a public utility.
The RCA regulation is a separate concern and they do monitor
the current ownership of certificated utilities.
1:55:44 PM
Representative Weyhrauch spoke to the transferee and RCA's
payment involvement. Mr. Strandberg advised that RCA wants
to maintain ownership that is "fit, willing and able", which
is the statute definition. For utilities not regulated by
the RCA, the rates are not set. He summarized that an
acquisition adjustment could only be assured under the
utilities economically regulated by the RCA.
Representative Croft voiced concern that State grants might
end up being solely for private benefit. He addressed RCA's
current restrictions, which could prevent that from
happening. A private buyer will only pay so much because of
regulations by RCA. He questioned if the amendment language
would assure that. Mr. Strandberg believed it could be
accomplished incorporating that language.
Representative Croft suggested that it could affect
economics in a limited situation. Mr. Strandberg reflected
that the amendment prevents private enrichment as a result
of that grant.
Vice-Chair Stoltze asked if there is any interest in
limiting the utility to State owned rather than foreign
owned businesses. Mr. Strandberg replied that he would
check the statute for that information. He did not believe
that there are utilities foreign owned. Mr. Wright advised
that all of the utilities receiving the grants are under the
RCA regulations whether they are foreign or not.
2:04:23 PM
Mr. Strandberg commented that any private owned investor
utility would be subject to current regulations. Unless the
Legislature changes that, the likelihood of an investor
owned utility going into an unregulated status is unlikely.
Vice-Chair Stoltze pointed out that last year, there was
legislation that would have removed the utility regulation.
He asked the protections in place. Mr. Strandberg explained
that bill was a deregulation of a municipality owned utility
and was a special case of a large, municipally owned
utility. He knew of no other actions to deregulate.
Mr. Wright interjected that it was not the intent of Speaker
Harris to get HB 46 involved in that legislation and would
object to it. Vice-Chair Stoltze appreciated that.
Representative Holm thought that the payback provision could
have unintended consequences. He offered that the benefits
incurred could bail out a municipality. Resulting from
that, if the pay back provisions were huge, there could be
unintended consequences. He believed that if a municipality
were getting money through a program, everyone in the
municipality would be benefiting.
2:07:53 PM
Co-Chair Meyer WITHDREW his OBJECTION to Amendment #1.
There being NO further OBJECTION, the change from "10" to
"5" years was adopted.
Co-Chair Meyer pointed out that the fiscal note for the
Department of Environmental Conservation had been zeroed
out. He asked for comments regarding that change.
2:08:53 PM
DAN EASTON, DIRECTOR, DIVISION OF WATER, DEPARTMENT OF
ENVIRONMENTAL CONSERVATION, explained that there had been an
increased workload in developing a small number of grants to
the larger amount and that was the base for the fiscal note.
The Department of Environmental Conservation anticipates a
workload impact and will attempt to do the work with a zero
note.
Co-Chair Chenault commented on the fiscal note. He pointed
out that in the FY03 budget, the Department had 33 matching
grants; in FY04, 12 matching grants; and in FY05, 7 matching
grants. He pointed out that the number of employees in the
Division staffing those projects had not changed. He
supported the fiscal note being zeroed out.
Representative Foster MOVED to report CS HB 46 (FIN) out of
Committee with individual recommendations and with the zero
fiscal notes. There being NO OBJECTION, it was so ordered.
CS HB 46 (FIN) was reported out of Committee with a "do
pass" recommendation and with zero note #1 by the Department
of Community & Economic Development and a new zero note by
the House Finance Committee for the Department of
Environmental Conservation.
2:12:26 PM
AT EASE: 2:12 P.M.
RECONVENE: 2:18 P.M.
2:18:21 PM
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