Legislature(2021 - 2022)ADAMS 519
05/09/2022 01:30 PM House FINANCE
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Audio | Topic |
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Start | |
SB243 | |
HB170 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
+ | SB 243 | TELECONFERENCED | |
+ | HB 5 | TELECONFERENCED | |
+ | TELECONFERENCED | ||
+= | HB 170 | TELECONFERENCED | |
HOUSE BILL NO. 170 "An Act establishing the Alaska energy independence program and the Alaska energy independence fund in the Alaska Industrial Development and Export Authority; and providing for an effective date." 2:29:12 PM Co-Chair Merrick indicated that the meeting marked the fifth hearing on HB 170. She announced that there was a new Fund Capitalization fiscal note. She explained that there had been an initial $10 million Fund Capitalization fiscal note by the administration (FN2 (Fund Cap). The amount had been increased to $30 million by the House Labor and Commerce Committee (HLC). The new fiscal note was for $20 million as a compromise between the two prior amounts. Representative Wool applauded the effort to meet in the middle between $10 million and $30 million. He thought an increase was good. He supported the fiscal note. Co-Chair Merrick asked for any further discussion on the fiscal note. The new fiscal note was adopted without objection. Representative Edgmon was of two minds on the bill. He provided his comments about the legislation. He related that the concept of a green bank appealed to him. He had concerns that the legislation was not properly vetted, and the banking community had not fully embraced the idea. He supported the provisions allowing use of fossil fuels but felt it was not aligned with the concept of a green bank. He did not like the terminology "independence" in the bill and thought that it was misleading. He discerned that energy independence meant that rural residents were not burdened under the staggering cost of diesel energy. He did not believe the bill was an ideal product. He had concerns about the program housed under the Alaska Industrial Development and Export Authority (AIDEA) and would prefer to see it under the Alaska Housing Finance Corporation (AHFC). He underscored that green bank meant green bank in other states, but they had to use the term energy independence in Alaska because it was not politically palatable. He believed green banks were the wave of the future. He speculated that the transition away from diesel in rural Alaska would be a long slow process. He did not support the bill. 2:33:08 PM Co-Chair Merrick noted there were representatives from AIDEA and AEA online. Representative Wool shared some of Representative Edgmon's concerns. He countered that something was better than nothing. He also had concerns about having the program under AIDEA and suggested that the committee might have investigated moving it to AHFC. He believed that the 1 megawatt limit was relatively small, and the bill was targeted for residential and commercial use. He hoped that it would help residents transition away from diesel use. He recalled Representative Josephsons amendment to call the bill the Green Bank bill. He pointed to adopted amendments that prioritized energy efficiency, renewable, and clean energy. He believed that the bill was a step in the right direction. 2:35:44 PM Representative LeBon shared concerns about the Alaska banking community buying into the program and wanting to participate. He asked AIDEA how they imagined the banking community participating in the program. MORGAN NEFF, CIO, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference), appreciated the question. He noted that the program could only survive if the banking community supported it. He emphasized that there was no way to circumvent the banking communities participation, since mobilizing private capital was an essential component of the bill that could only be accomplished via collaboration. He was focused on conversations with the banking community. 2:37:19 PM Representative LeBon referred to credit approval process. He asked if there was a vision in the approval process that required a banks participation at a certain dollar amount or whether theoretically, any amount could be funded by the green bank. Mr. Neff answered that the idea was to fully leverage private sector capital to produce the multiplier effect and offer more attractive financing and programs to all communities in the state. He delineated that through the green bank there were many tools that could be offered to private investors such as credit enhancement, co- investment, and technical expertise. He maintained that the program was designed to incentivize and mobilize private capital to get as much capital out to communities within the state. Representative LeBon asked if the green bank was independent in its credit underwriting process from AIDEA and AEA. Mr. Neff answered that would ultimately be established by regulation. He envisioned that there would be a standalone committee and process driven by the private investors to leverage their capital by the ratio of $7 to $8 dollars to $1 dollar. Representative LeBon asked who would write the credit policy for the green bank. 2:39:33 PM Mr. Neff answered that the policy would be written in collaboration with the advisory committee. He expected that the financial institutions would play a large role in the committee. Representative LeBon encouraged Mr. Neff to ensure the banking community was at the table when drafting the credit policy. Representative Carpenter opined that the bill was not ready for passage or consideration by the House. He deemed that there was some risk and some value. He thought there was enough uncertainty that the committee should do its due diligence before passing the bill out of committee. 2:40:55 PM AT EASE 2:41:57 PM RECONVENED Representative Carpenter voiced that his biggest concern was creating a program and setting aside state money without any idea that the banking community was supportive of the program. He thought the bill was premature. Representative Wool guessed that if the program was set up to attract banks and offer credit enhancement products, he hoped it would entice lenders and borrowers to take loans out for energy efficiency or renewable energy. He stated that if the concept was not attempted the outcome would remain unknown. He characterized the green bank as offering risk reduction to the banking community. He recounted that the other green banks testified to the extremely low default rate. He recognized the bill was not perfect. He strongly believed that the bill would help move the needle away from diesel use and that it was worth a try. He recounted that the committee included an amendment that $7 million would be set aside to underwrite projects in rural Alaska. Representative LeBon stated they had just heard from AIDEA that it would reach out to the banking community and collaborate while the program was developing. He deduced that if the banks had a say in how the credit policy was written the program could be designed to win the banks on board and achieve success. 2:45:14 PM Representative Wool noted that green bank programs had been done successfully in other states where there was a lot of banking involvement. He reminded the committee that the committee removed the potential for large fossil fuel involvement. Representative Josephson added that he supported moving the bill out of committee, but he would not be disappointed if it did not move forward. He thought that the type of institution would happen invariably. He did not think AIDEA was the best place to house the new program. He noted that the Renewable Energy Program supported the bill, and it had his great respect, which mattered to him. 2:47:03 PM Representative Edgmon noted there was $18.5 million in weatherization funds in the capital budget through federal funds. He thought it would be interesting to know whether some of the Infrastructure Investment and Jobs Act (IIJA) funding could be available for residents without a loan to repay. He stood behind his earlier comments stating his skepticism that the program would not do much for rural Alaska. He opined that some aspects of the bill were beneficial but restated his reservations regarding the bill. He reiterated his opposition to the bill. 2:48:50 PM Co-Chair Foster MOVED to REPORT CSHB 170(FIN) out of committee with individual recommendations and the accompanying fiscal notes. Representative Edgmon OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Josephson, LeBon, Ortiz, Rasmussen, Thompson, Wool, Merrick OPPOSED: Carpenter, Edgmon, Foster The MOTION PASSED (7/3). There being NO OBJECTION, CSHB 170(FIN) was REPORTED out of committee with one "do pass" recommendation, two "do not pass" recommendations, four "no recommendation" recommendations, and three "amend" recommendations and with one new fiscal impact note by the House Finance Committee for the Department of Commerce, Community and Economic Development; one new fiscal impact note by the Department of Commerce, Community and Economic Development; and one new fiscal impact note by the House Finance Committee for Fund Capitalization.
Document Name | Date/Time | Subjects |
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SB 243 AEA Response to Question HFIN 050922.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
SB 243 Response toQ HFIN PCEAnalysis-LegReq-IncFrom500To750.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
CSSB 243 Fin sectional.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
SB 243 Supporting Document - AEA PCE Analysis from 500 to750.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
HB 170 Public Testimony Rec'd by 050922.pdf |
HFIN 5/9/2022 1:30:00 PM |
HB 170 |
HB 61 Public Testimony Rec'd by 050922.pdf |
HFIN 5/9/2022 1:30:00 PM |
HB 61 |