Legislature(2017 - 2018)HOUSE FINANCE 519

03/06/2017 01:30 PM FINANCE

Note: the audio and video recordings are distinct records and are obtained from different sources. As such there may be key differences between the two. The audio recordings are captured by our records offices as the official record of the meeting and will have more accurate timestamps. Use the icons to switch between them.

Download Mp3. <- Right click and save file as
Download Video part 1. <- Right click and save file as

* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ HB 49 EXTEND BOARD OF DIRECT-ENTRY MIDWIVES TELECONFERENCED
Heard & Held
+ HB 56 COMMERCIAL FISHING LOANS TELECONFERENCED
Heard & Held
+ HB 81 AK ENERGY EFFICIENCY LOANS: ELIGIBILITY TELECONFERENCED
Heard & Held
+ HB 106 CIVIL LEGAL SERVICES FUND TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
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."                                                                                   
                                                                                                                                
2:24:21 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE JONATHAN  KREISS-TOMKINS, SPONSOR, introduced                                                                    
himself and  provided information about the  legislation. He                                                                    
believed  that  most  members  of  the  committee  had  seen                                                                    
previous iterations  of the legislation  over the  years. He                                                                    
offered a history of the topic of the bill:                                                                                     
                                                                                                                                
     This bill gives  nonprofit organizations and federally-                                                                    
     recognized  tribes the  power to  apply for  loans from                                                                    
     the  Alaska  Energy  Efficiency  Revolving  Loan  Fund.                                                                    
     Because AEERLF  is such  a god  awful acronym,  we call                                                                    
     this  bill  the  More Energy  Efficient  Buildings  Act                                                                    
     ("MEEBA").                                                                                                                 
                                                                                                                                
     The  AEERLF  was  created  by  the  Alaska  Sustainable                                                                    
     Energy Act  in 2010.  It authorized the  Alaska Housing                                                                    
     Finance  Corporation  to  make   $250  million  in  low                                                                    
     interest  loans for  energy efficiency  improvements to                                                                    
     public  entities,  namely   municipalities  and  school                                                                    
     districts.  One   loan  has   been  closed   since  the                                                                    
     program's creation in 2010.                                                                                                
                                                                                                                                
     Especially  given  our  new  and  more  austere  fiscal                                                                    
     climate  in which  legislative grants  are going  to be                                                                    
     rare to nonexistent, many  nonprofits are interested in                                                                    
     becoming more self-sufficient  and accessing loans from                                                                    
     the   revolving  loan   fund   to   invest  in   energy                                                                    
     efficiency.   Right  now,   nonprofits  such   as  soup                                                                    
     kitchens,  arts organizations,  American Legion  posts,                                                                    
     and  churches   are  not  eligible  to   apply  to  the                                                                    
     revolving loan fund.                                                                                                       
                                                                                                                                
     The  More  Energy  Efficient Buildings  Act  authorizes                                                                    
     Alaska Housing to  accept applications from non-profits                                                                    
     and federally  recognized tribes for  energy efficiency                                                                    
     improvements  to  their   buildings.  The  More  Energy                                                                    
     Efficient Buildings  Act improves energy  efficiency in                                                                    
     Alaska.  It  helps  Alaska  nonprofits,  churches,  and                                                                    
     veteran's  organizations  become more  self-sufficient.                                                                    
     And  it  helps create  a  public  benefit for  a  State                                                                    
     program that's presently under-used.                                                                                       
                                                                                                                                
Representative  Kreiss-Tompkins lamented  that his  previous                                                                    
attempts  to  pass similar  legislation  had  been met  with                                                                    
apathy and  disinterest. He  felt that  the apathy  had been                                                                    
nurtured  by  the  legislature,  which  had  offered  school                                                                    
districts and municipalities'  legislative grants to finance                                                                    
their energy expenses.                                                                                                          
                                                                                                                                
2:29:26 PM                                                                                                                    
                                                                                                                                
Representative  Kreiss-Tompkins  continued  to  address  the                                                                    
reasoning for  the development of  the legislation.  He felt                                                                    
that  the   bonding  authority   had  been   underused,  and                                                                    
suggested that  expanding the  eligibility to  the revolving                                                                    
loan  fund  to  non-profits and  organizations  that  needed                                                                    
access to capital in order to deliver services to Alaskans.                                                                     
                                                                                                                                
Co-Chair  Foster relayed  there  were individuals  available                                                                    
for questions.                                                                                                                  
                                                                                                                                
2:31:13 PM                                                                                                                    
                                                                                                                                
Representative  Grenn   queried  they  type   of  non-profit                                                                    
entities that would be eligible under the bill.                                                                                 
                                                                                                                                
Representative Kreiss-Tompkins replied  that the eligibility                                                                    
would be expanded  to the suite of  Internal Revenue Service                                                                    
(IRS) designated  non-profit organizations. He  thought that                                                                    
the  bottom line  was  that energy  efficiency  was good  no                                                                    
matter who was benefiting from  it; the more people who were                                                                    
able to make energy efficiency improvements, the better.                                                                        
                                                                                                                                
2:33:42 PM                                                                                                                    
                                                                                                                                
Representative  Kawasaki  requested further  description  of                                                                    
the IRS designated non-profit entities.                                                                                         
                                                                                                                                
Representative Kreiss-Tompkins answered  that 501c 4 related                                                                    
to  civic   leagues,  social   welfare  or   local  employee                                                                    
associations,  and  501c  6  related  to  business  leagues,                                                                    
chambers of  commerce, and industry  umbrella organizations.                                                                    
He furthered that 501c 12  related to mutual and cooperative                                                                    
associations, and  501c 19 related to  post-organizations of                                                                    
past and  present members of  the armed forces.  He deferred                                                                    
to staff for any further clarification.                                                                                         
                                                                                                                                
Representative   Kawasaki   asked    whether   a   political                                                                    
organization  such as  the Alaska  Democratic or  Republican                                                                    
Party Headquarters would qualify.                                                                                               
                                                                                                                                
Representative Kreiss-Tompkins replied that  he did not know                                                                    
and relayed that he would follow up with an answer.                                                                             
                                                                                                                                
Representative  Kawasaki expressed  concern for  fairness in                                                                    
the decision  making process  of who  would qualify  for the                                                                    
loans.  He   asked  about   the  constitutionality   of  the                                                                    
inclusion of churches and religious organizations.                                                                              
                                                                                                                                
BERETT  WILBER,   STAFF,  REPRESENTATIVE   JONATHAN  KREISS-                                                                    
TOMKINS, directed  committee attention to the  memo from the                                                                    
Division Legislative Legal provided  in member's packets and                                                                    
dated  January 23,  2017(copy on  file). She  explained that                                                                    
legislative legal  had determined that allowing  churches to                                                                    
apply for  loan funding under the  energy efficiency program                                                                    
was constitutional.                                                                                                             
                                                                                                                                
Representative  Kawasaki asked  if it  was because  everyone                                                                    
that applied had an equal chance of receiving the loan.                                                                         
                                                                                                                                
2:37:37 PM                                                                                                                    
                                                                                                                                
Ms. Wilber  replied she would  need to reread the  memo, but                                                                    
she believed he was correct.                                                                                                    
                                                                                                                                
Representative  Wilson  asked   about  prioritizing  schools                                                                    
first as recipients.                                                                                                            
                                                                                                                                
Ms. Wilber cited Section 7 of the legislation:                                                                                  
                                                                                                                                
     * Sec. 7. AS 18.56.855 is amended by adding new                                                                          
     subsections to read:                                                                                                       
          (k) In  considering applications and  making loans                                                                    
          from the  Alaska energy efficiency  revolving loan                                                                    
          fund,  the  corporation  shall  give  priority  to                                                                    
          energy efficiency improvements  to buildings owned                                                                    
          by  a regional  educational  attendance area,  the                                                                    
          University  of  Alaska,  a  municipality,  or  the                                                                    
         state over other applications and loans.                                                                               
          (l)   Notwithstanding   any  provision   of   this                                                                    
          section,  the recipient  of a  loan under  28 this                                                                    
          section   may  not   be   a  for-profit   business                                                                    
          enterprise.                                                                                                           
                                                                                                                                
Representative  Wilson thought  some  loans required  audits                                                                    
first.                                                                                                                          
                                                                                                                                
Ms. Wilber  answered that the loan  required a federal-grade                                                                    
audit that  would specify  the areas  a building  would save                                                                    
money with energy efficiency improvements.                                                                                      
                                                                                                                                
Representative Wilson  asked whether a  non-profits monetary                                                                    
holding  would  be  taken   into  account  when  determining                                                                    
interest and eligibility of the loans.                                                                                          
                                                                                                                                
2:40:08 PM                                                                                                                    
                                                                                                                                
Ms. Wilber  answered that there  would be no limit  to which                                                                    
non-profits could  apply for the  loans. She said  that AHFC                                                                    
would   set  the   interest  rate.   She  deferred   further                                                                    
explanation to AHFC.                                                                                                            
                                                                                                                                
STACEY SCHUBERT,  DIRECTOR, GOVERNMENTAL AFFAIRS  AND PUBLIC                                                                    
RELATIONS,  ALASKA  HOUSING FINANCE  CORPORATION,  ANCHORAGE                                                                    
(via  teleconference), explained  that the  current interest                                                                    
rate for a 15 year loan was 4.25 percent.                                                                                       
                                                                                                                                
Representative Wilson asked whether  the interest rate would                                                                    
be the same for a bank loan to the same applicant.                                                                              
                                                                                                                                
Ms.  Schubert replied  that  she did  not  know the  current                                                                    
interest rate for other institutions.                                                                                           
                                                                                                                                
Representative  Wilson asserted  that  she did  not want  to                                                                    
compete  with banks  or to  loan money  at a  lower interest                                                                    
rate  than financial  institutions. She  asked who  paid the                                                                    
bill if an organization defaulted on the loan.                                                                                  
Ms. Schubert deferred the question to a colleague.                                                                              
                                                                                                                                
MICHAEL  STRAND, CFO,  ALASKA  HOUSING FINANCE  CORPORATION,                                                                    
ANCHORAGE (via teleconference),  informed the committee that                                                                    
the money  would come from  the AHFC internal  resources. He                                                                    
said  that  if  the  total loan  amounts  reached  over  $50                                                                    
million then  AHFC would have  to go  to bond, the  costs of                                                                    
which  would be  absorbed by  the program  cost. He  relayed                                                                    
that  AHFC  would be  responsible  for  any defaults;  there                                                                    
would be no risk  to the state in the event  of a default on                                                                    
the loan.                                                                                                                       
                                                                                                                                
2:44:07 PM                                                                                                                    
                                                                                                                                
Representative   Guttenberg  referred   to  the   previously                                                                    
mentioned legal  memo. He believed that  the memo succinctly                                                                    
explained the entities  that were eligible for  the loan. He                                                                    
believed  that   the  memo   addressed  the   issues  raised                                                                    
Representative  Wilson. He  believed that  non-profits would                                                                    
take advantage of bank loans  if they could qualify for one,                                                                    
regardless of interest rates.                                                                                                   
                                                                                                                                
Representative  Kreiss-Tompkins responded  to Representative                                                                    
Wilson's questions.  He understood  that because of  the way                                                                    
the program  was structured, savings had  to be demonstrated                                                                    
through an  audit before an  entity could qualify.  He added                                                                    
that  the  energy  savings essentially  financed  the  debt,                                                                    
which was a  unique approach that was not used  by banks and                                                                    
traditional lending institutions.                                                                                               
                                                                                                                                
2:47:15 PM                                                                                                                    
                                                                                                                                
Co-Chair Foster OPENED and CLOSED public testimony.                                                                             
                                                                                                                                
HB  81  was   HEARD  and  HELD  in   committee  for  further                                                                    
consideration.                                                                                                                  

Document Name Date/Time Subjects
HB049 Sponsor Statement 1.30.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 49
HB049 Supporting Documents-Letters of Support 2.2.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 49
HB049 Supporting Documents-Full Sunset Audit 01.30.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 49
HB0056 Sponsor Statement 01.23.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB0056 Supporting Document-Constituent 01.24.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB0056 Sectional Analysis 01.23.17 .pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB056 Support SEAFA.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB056 Support USAG.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB056 Supporting Document - Decker 02.23.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB056 Supporting Document CED 2016 Annual State Loan Report.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB056 Supporting Document CED 2016 FE Term Ext Report.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
HB081 Additional Documents Guide AEERLFP 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Additional Documents Memo Legal 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Sectional Analysis 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Sponsor Statement 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Summary of Changes 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Support Document Letter AAHA 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Supporting Documents Letter CCS, Catholic Diocese of Juneau 1.27.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Supporting Documents Letter Denali Commission 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Supporting Documents Letter SFAC 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Supporting Documents Letter TCC 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB081 Supporting Documents Report Rural Retrofits 2.14.2017.pdf HFIN 3/6/2017 1:30:00 PM
HB 81
HB 106 Supporting Document - Letters ACOA-ACT 2.14.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Additional Document-2017 Civil Legal Services Fund Overview 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Additional Document-2017 Fact Sheet 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Additional Document-ALSC statement on Case Restrictions 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Additional Document-Civil Funds filing fee info 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Additional Document-FY2016 ALSC Fact Sheet 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Additional Document-FY2016 ALSC Pro Bono Program 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Sponsor Statement 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB106 Sectional Analysis ver A 2.8.17.pdf HFIN 3/6/2017 1:30:00 PM
HB 106
HB 49 Medicaid Cost Savings_CDMs 2015_word (002).pdf HFIN 3/6/2017 1:30:00 PM
HB 49
HB 49 Supporting Doc 2016 MID Fee Analysis.pdf HFIN 3/6/2017 1:30:00 PM
HB 49
HB56 Support UFA to HFin SB71 to SLC 030317.pdf HFIN 3/6/2017 1:30:00 PM
HB 56
SB 71
HB 56 Supporting Documents-letters.pdf HFIN 3/6/2017 1:30:00 PM
HB 56