Legislature(2001 - 2002)
04/26/2001 08:43 PM FIN
* first hearing in first committee of referral
= bill was previously heard/scheduled
= bill was previously heard/scheduled
HOUSE BILL NO. 175 An Act making an appropriation to the Alaska Industrial Development and Export Authority for power projects; and providing for an effective date. HOUSE BILL NO. 238 An Act relating to the power transmission intertie fund of the Alaska Energy Authority. Members were provided with a proposed committee substitute, work draft for HB 175 22-LS0705\T, Cramer 4/26/01. Members were provided with proposed committee substitute for HB 238, work draft 22-LS0868\F, 4/26/01 (copy on file). MIKE TIBBLES, STAFF, REPRESENTATIVE WILLIAMS provided information on HB 175 and HB 238. He noted that there were previous discussions regarding where the funding source, payment mechanism and repayment. Vice-Chair Bunde MOVED to ADOPT proposed committee substitute, work draft for HB 175, 22-LS0705\T, Cramer 4/26/01. There being NO OBJECTION, it was so ordered. Mr. Tibbles explained that the proposed committee substitute splits into two separate appropriations the amount that would be a grant and the amount that would be a zero interest loan. House Bill 238 creates a new fund. The appropriation in HB 175, section 1 would be appropriated into the new fund created in HB 238. The problem with the previous version was that state of Alaska law required that loans from the Alaska Industrial Development and Export Authority (AIDEA) Revolving Loan Fund be repaid back into the fund. Money would be appropriated to the new Power Transmission Intertie Loan Fund and then be loaned on a zero interest basis. The repayments would be made to the Railbelt Energy Fund. Section 2 of HB 238 sets up the requirements for the loan program. Subsection (e) states that the authority shall deposit repayments of loans to the Railbelt Energy Fund. Representative John Davies questioned why the Railbelt Energy Fund would be appropriate. Co-Chair Mulder explained that when the natural gas pipeline is developed and there is gas power there would be a need for an intertie throughout South Central Alaska. The purpose is to assure that there are enough funds in the Railbelt Energy Fund to intertie the entire Railbelt. Mr. Tibbles referred to page 2, line 14 of HB 175. He explained that the appropriation of $2.5 million dollars to the Matanuska Electric Association, which is contained as a loan in section 1, should be included as a grant in section 2. Representative Harris MOVED to ADOPT Amendment 1: change "a no interest loan" on line 14, page 2 to "grant" and move lines 14 - 18 into section 2. He explained that it is a railbelt energy project and would qualify as a grant. Representative John Davies pointed out that the funding source is the Constitutional Budget Reserve. Mr. Tibbles explained that the project is consistent with the other grant projects. Representative Croft thought that it would make more sense to leave the project in section 1. Representative Lancaster explained that funds were requested from the Railbelt Energy Fund. The decision was made to take the funds from the Constitutional Budget Reserve and put into the Railbelt Energy Fund. Projects related to the Railbelt would be grants; others would be made as zero interest loans repaid to the Railbelt Energy Fund. He stressed that all those in receipt of funds are in support. Representative Hudson summarized that the funds from the Constitutional Budget Reserve to Alaska Industrial Development and Export Authority (AIDEA) would be appropriated as loans or grants and never be paid back to the CBR. Representative Croft acknowledged that it is a loan from the Constitutional Budget Reserve and pointed out that a debt is being created in two places. He stressed the difficulty of assessing which projects should be logically related to the Railbelt. Representative Lancaster explained that the grant to Copper Valley for $500 thousand dollars is a pay back for a study they completed for the Glennallen Intertie, which never came to fruition. Grants to Southeast Communities are for studies, not physical plants. Representative Whitaker summarized that there is $101 million dollars for power transmission projects: $32.5 million dollars for non-Railbelt areas; and $60.8 million dollars for the Railbelt. He stressed that there is $101 million dollars for power transmission projects: basic infrastructure. Some of the money would go back into the Railbelt Energy Fund for future use. He pointed out that 80 percent of the state's population is in the Railbelt, but only 60 percent of the funds go to the Railbelt. He felt that this discrepancy would be offset by building the fund for future need. He stressed the importance of funding basic infrastructure. Representative Lancaster pointed out that section 3 also funds the Power Cost Equalization FY02 shortfall. Representative Lancaster observed that section 6 of HB 175 refers to HB 238, which is the mechanism that allows AIDEA to receive the funding. Representative Foster MOVED to report CSHB 175 (FIN) out of Committee. There being NO OBJECTION, it was so ordered. CSHB 175 (FIN) was REPORTED out of Committee with a "do pass" recommendation. Representative Lancaster MOVED to report CSHB 238 (FIN) out of Committee with the accompanying fiscal note. There being NO OBJECTION, it was so ordered. CSHB 238 (FIN) was REPORTED out of Committee with a "do pass" recommendation and with a new zero fiscal note by the House Finance Committee for the Department of Community and Economic Development.