Legislature(2007 - 2008)HOUSE FINANCE 519

07/26/2008 10:00 AM House FINANCE


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10:09:10 AM Start
01:08:37 PM HB4003
03:28:28 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB4002 RESOURCE REBATE PROGRAM FOR RESIDENTS TELECONFERENCED
Heard & Held
1:00 pm - Public Testimony
Time limit may apply
+ HB4003 APPROP: ENERGY RELIEF/REBATE/FUEL TAX TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
HOUSE BILL NO. 4003                                                                                                           
                                                                                                                                
     "An  Act making  supplemental  appropriations to  the                                                                      
     Alaska Energy Authority for  power cost equalization;                                                                      
     making special  appropriations to  the Department  of                                                                      
     Revenue and  to the Department  of Health  and Social                                                                      
     Services for the Alaska resource rebate program; making                                                                    
     a special appropriation to the  Department of Revenue                                                                      
     for the payment  of certain shared taxes  relating to                                                                      
     aviation fuel; and providing for an effective date."                                                                       
                                                                                                                                
Ms. Rehfeld  explained the components  of the  bill, which                                                                      
include:                                                                                                                        
                                                                                                                                
  ·    $8.0 million for the one time payment for resource                                                                       
       rebate and associated administrative costs;                                                                              
  ·    $10.7 million for hold harmless provisions;                                                                              
  ·    Includes a request for supplemental funding for the                                                                      
          Power Cost Equalization (PCE) program of $9.6                                                                         
          million based on rates needing adjustment or                                                                          
       increase in the near future; and                                                                                         
  ·    A component concerning $150,000 to hold harmless, in                                                                     
          the event of  motor fuel tax suspension, for                                                                          
       communities that operate their own airports.                                                                             
                                                                                                                                
11:33:52 AM                                                                                                                   
                                                                                                                                
Vice-Chair Stoltze asked  if it equals  $7 per  person and                                                                      
would come out the original dividend.                                                                                           
                                                                                                                                
Mr. Burnett  clarified that under the original  bill $10.7                                                                      
million  dollars  of  hold harmless  was  a  general  fund                                                                      
appropriation that would not have come out of the dividend.                                                                     
                                                                                                                                
Vice-Chair Stoltze asked if there is a list of airports that                                                                    
would receive the funding for lost revenues.                                                                                    
                                                                                                                                
Mr.  Burnett   related  that  Juneau,   Ketchikan,  Kenai,                                                                      
Anchorage, Kodiak,  Soldotna, and Palmer  qualify for  the                                                                      
funding.                                                                                                                        
                                                                                                                                
11:36:03 AM                                                                                                                   
                                                                                                                                
 Co-Chair Chenault asked why these were the only ones                                                                           
 included.                                                                                                                      
                                                                                                                                
 Mr. Burnett reported that the bill addresses municipality-                                                                     
 owned airports, not state-owned airports.                                                                                      
                                                                                                                                
 11:36:57 AM                                                                                                                  
                                                                                                                                
 Representative Hawker requested the new fiscal note showing                                                                    
 $400,000 hold harmless.                                                                                                        
                                                                                                                                
 11:37:55 AM                                                                                                                  
                                                                                                                                
 Representative Gara mentioned the Renewable Energy Fund                                                                        
 adopted last year, with many new applications needing                                                                          
 review.  He asked about additional staff authorization.                                                                        
                                                                                                                                
 Co-Chair Meyer said that question would be answered on                                                                         
 Monday.                                                                                                                        
                                                                                                                                
 11:39:10 AM                                                                                                                  
                                                                                                                                
 HB 4003 was heard and HELD in Committee for further                                                                            
 consideration.                                                                                                                 
                                                                                                                                
 RECESS:       11:39:45 AM                                                                                                    
                                                                                                                                
 RECONVENE:    1:08:37 PM                                                                                                     
                                                                                                                                
The following statewide testimony was taken in log note                                                                         
format.  Handouts will be on file with the House Finance                                                                        
Committee through the 25th Legislative Session, contact 465-                                                                    
6814. After the 25th Legislative Session they will be                                                                           
available through the Legislative Library at 465-3808.                                                                          
                                                                                                                                
 HB4002-RESOURCE REBATE PROGRAM FOR RESIDENTS                                                                                 
 HB4003-APPROP: ENERGY RELIEF/REBATE/FUEL TAX                                                                                 
                                                                                                                                
 TIME        SPEAKER        DISCUSSION                                                                                      
 1:08:37 PM JULIE    KITKA, Provided members with written testimony                                                           
             PRESIDENT,     (copy on file). She related that this                                                               
             ALASKA         is a very historic period due to                                                                    
             FEDERATION  OF financial problems in the U.S. economy,                                                             
             NATIVES        as well as to high energy costs.  The                                                               
                            state  has a  responsibility to provide                                                             
                            affordable  energy to  Alaskans and  to                                                             
                            provide  energy to the Lower  48. Every                                                             
                            major   institution   in   the   Native                                                             
                            community is concerned about the energy                                                             
                            problem.   The   Native  community   is                                                             
                            interested  in   having  the  solutions                                                           
                            accountable,      to       incentivize                                                              
                            communities, and  expand  the  private                                                              
                            sector. A new  shift in thinking needs                                                              
                            to take  place.   Energy  relief is  a                                                              
                            first step.  State resources must also                                                              
                            be  invested   for  the   future.  She                                                              
                            cautioned that actions that  are taken                                                              
                            do not create a backlash.  She spoke in                                                             
                            favor of  stabilizing energy  costs, a                                                              
                            cash rebate, and a multi-year approach                                                              
                            to energy  prices.  She  believed high                                                              
                            energy costs  are  here  to stay.  Ms.                                                              
                            Kitka looked  at  restructuring as  an                                                              
                            opportunity and  the  need  for  smart                                                              
                            investing   on    behalf   of    state                                                              
                            government.    She  stressed providing                                                              
                            immediate relief.   Ms.  Kitka pointed                                                              
                            out that all cost-of-living prices have                                                             
                            increased.   She spoke  in  support of                                                              
                            funding  for  Power  Cost Equalization                                                              
                            (PCE).  She   recommended  that  rural                                                              
                            utilities be stabilized.  She spoke in                                                              
                            behalf  of   the  Denali  Commission's                                                              
                            energy needs. She testified in support                                                              
                            of the family fuel subsidy and in favor                                                             
                            of funding alternative energy projects                                                              
                            in   order   to   encourage   economic                                                              
                            development.  She  also stated support                                                              
                            for    funding     higher    education                                                              
                            institutions so that  they can proceed                                                              
                            with research  on  energy  issues. She                                                              
                            thanked the committee for their work.                                                             
1:31:38 PM Co-Chair Meyer  Asked if those opinions were from the                                                              
                            Alaska Federation of Natives.                                                                     
1:32:24 PM Ms. Kitka        Explained where her statements came                                                               
                            from the Alaska  Federation of Natives                                                              
                            (AFN) energy group.                                                                               
1:32:46 PM Vice-Chair       Talked about the need for an early                                                                
            Stoltze         energy relief payment.                                                                            
1:33:49 PM JERRY BURNETT, Explained     the   recommendations  for                                                            
            DIRECTOR,       payment   of  the   rebate   and   the                                                              
            DIVISION    OF possibility for an earlier payment.                                                                
            ADMINISTRATIVE                                                                                                      
            SERVICES,                                                                                                           
            DEPARTMENT OF                                                                                                       
            REVENUE                                                                                                             
                                                                                                                                
1:35:04 PM Vice-Chair       Thought there might be a way to                                                                   
            Stoltze         facilitate an earlier payment.                                                                    
1:35:42 PM Mr. Burnett      Observed that it may be possible to                                                               
                            issue a separate resource rebate check                                                              
                            a few weeks  before the permanent fund                                                              
                            dividend is issued.                                                                               
 1:35:58 PM  Representative Thanked Ms. Kitka for her testimony and                                                           
             Gara           invited her to return often.                                                                      
 1:36:22 PM Ms. Kitka       Complimented the legislators for their                                                            
                            accessibility.                                                                                    
 1:37:05 PM  ROBERT  KEITH, Spoke   to  the   "urban/rural  divide"                                                           
             CHAIR,         comment. He recalled past use of that                                                               
             KAWERAK, INC., term.  He complimented  the legislature                                                             
             NOME           on   their   welcoming   attitude.   He                                                             
                            described  problems related  to  rising                                                             
                            costs in his Native village of Elim. He                                                             
                            noted  a   problem  with  the  economic                                                             
                            impact of  a $1200 rebate. He suggested                                                             
                            using  excess  funds to  mitigate  fuel                                                             
                            costs.  He described energy summits  in                                                             
                            his  area, wind  generators, the  SITCO                                                             
                            program, and federal grant programs. He                                                             
                            suggested  having a  technical clearing                                                             
                            house  for energy  issues. He spoke  in                                                             
                            favor of PCE.                                                                                     
 1:49:18 PM  Representative Inquired about the  use of solar panels                                                           
             Joule          in the region.                                                                                    
 1:49:57 PM Mr. Keith       Reported that Bering Strait Native                                                                
                            Corporation has installed a large solar                                                             
                            panel,    as    have   several    other                                                             
                            corporations.                                                                                     
 1:52:18 PM  BARB  NICKELS, Reported   that   the   Bering   Strait                                                           
             DIRECTOR,      Development Council supports SB 4002                                                                
             BERING  STRAIT and SB  4003.  She spoke of rising fuel                                                             
             DEVELOPMENT    costs in the Bering Strait region and                                                               
             COUNCIL        the    hardships   that   creates   for                                                             
             (ARDOR)        community members. She referred to the                                                              
                            relationship  between  fuel  costs  and                                                             
                            migration  out  of   villages  and  the                                                             
                            resulting  implications on  educational                                                             
                            systems. She spoke in  favor of a state                                                             
                            economic    development    plan.    She                                                             
                            concluded  that rural Alaskans want  to                                                             
                            help  themselves, yet need  the state's                                                             
                            immediate assistance.                                                                             
1:59:48 PM Representative Thanked Ms. Nickels for her testimony.                                                              
             Gara                                                                                                               
 2:00:23 PM  DAVID   PELTO, Testified   against   the   bills,   as                                                           
             PALMER         written.  He maintained that long-term                                                              
                            investments  are needed  and the  state                                                             
                            should  help  only  those in  need.  He                                                             
                            spoke against  the sense of entitlement                                                             
                            many Alaskans have.                                                                                 
                                                                                                                              
 2:03:03 PM JUDITH          Testified against funds for individuals                                                           
             ANDEREGG,      in the form of an energy assistance                                                                 
             PALMER         rebate using PFD qualifications to                                                                  
                            determine residency.                                                                              
 2:07:24 PM  HOWARD DORSEY, Testified  in support  of the  resource                                                           
            KENAI           rebate program for residents. He spoke                                                              
                            of ways that he could benefit from the                                                              
                            rebate   in   home   improvements  and                                                              
                            weatherization.  He suggested that the                                                              
                            money be dispersed  sooner than later,                                                              
                            as the  fuel  barges leave  for remote                                                              
                            villages in near future.                                                                          
2:11:41 PM MARGARET         Discussed documents she submitted on                                                              
            MANOUSOFF,      behalf of Alaska Conservation Solutions                                                             
            ALASKA          (copy on file.) She testified in                                                                    
            CONSERVATION    opposition  to  the   resource  rebate                                                              
            SOLUTIONS,      program    for     several    reasons;                                                              
            ANCHORAGE       entitlement, tax, and equity issues,                                                                
                            and social consequences. She maintained                                                             
                            that common resources ought to be used                                                              
                            for  the  common  good. She  suggested                                                              
                            possible solutions to energy problems.                                                              
                            She  urged  the state  to  make  long-                                                              
                            lasting investments.                                                                              
2:21:50 PM  Representative  Asked for  more information  about Ms.                                                            
            Hawker          Manousoff's organization.                                                                         
2:22:53 PM  Ms. Manousoff   Explained  her  organization's history                                                            
                            and focus on education about causes of                                                              
                            global  warming,   including  possible                                                              
                           solutions.                                                                                         
2:24:02 PM JERRY            Suggested using the energy assistance                                                             
            MCCUTCHEON,     program qualifications (LIHEAP) to                                                                  
            ANCHORAGE       determine   eligibility   for   energy                                                              
                            relief.  He requested that the money be                                                             
                            paid to the individual rather than the                                                              
                            vendor.  He testified against fuel tax                                                              
                           suspension.                                                                                        
2:27:34 PM PAUL         D. Complimented Ms. Kitka's presentation.                                                             
            KENDALL,        Testified against the Resource Rebate                                                               
            ANCHORAGE       program for residents. He emphasized                                                                
                            the need to stay focused on the issues.                                                             
                            He suggested a daily television program                                                             
                            by  the  Alaska  Energy Authority.  He                                                              
                            stressed  the  need   for  clean  air,                                                              
                            alternative methods of electricity, and                                                             
                            transportation.                                                                                   
2:40:19 PM BI       JERREL, Testified in support of the Resource                                                              
            KENAI           Rebate program for residents.                                                                     
2:43:44 PM EUGENE           Testified in support of the Resource                                                              
            BOBLETT,        Rebate program for residents. He                                                                    
            SOLDOTNA        stressed   his    difficult   economic                                                              
                            situation as a  senior with the rising                                                              
                            cost of propane.                                                                                  
2:59:46 PM TOM LOKOSH       Questioned the nexus between the rebate                                                           
                            bill and the Governor's budget and how                                                              
                            funds are  allocated.  He  pointed out                                                              
                            that none of the rebates allow for the                                                              
                            person who rents. He  thought that the                                                            
                            LIHEAP   formula  should  be  used   to                                                             
                            determine qualification for the rebate.                                                             
                            He  suggested  finding  less  expensive                                                             
                            alternative energy sources  rather than                                                             
                            subsidizing in the form of PCE.                                                                   
 3:13:18 PM Representative Clarified a previous conversation with                                                             
             Nelson         Representative   Gara   regarding   the                                                             
                            resource rebate.                                                                                  
 3:14:40 PM Mr. Lakosh      Commented    on   dispersing    natural                                                           
                            resources in the state.                                                                           
 3:15:32 PM Representative Explained the purpose of the special                                                               
             Nelson         session and the allowable topics of                                                                 
                           discussion.                                                                                        
 3:16:28 PM GEORGIA         Shared her personal experience with                                                               
             WESTFALL       high fuel costs "off the grid". She                                                                 
                            testified in favor of the resource                                                                  
                            rebate.                                                                                           
 3:20:58 PM LAURA           Testified in favor of the resource                                                                
             SCHAEVITZ,     rebate. She spoke of the high cost of                                                               
             ANCHORAGE      living. She opposed using the rebate to                                                             
                            garnish wages.                                                                                    
 3:28:28 PM JUDITH MAGNUS, Shared her experiences with higher cost                                                            
             ANCHORAGE      of living expenses. She testified in                                                                
                            favor of the resource rebate.                                                                     
             ADJOURNMENT    The meeting was adjourned at 3:34 PM                                                              
                                                                                                                                

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