Legislature(2007 - 2008)SENATE FINANCE 532

08/02/2008 09:00 AM FINANCE


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09:28:56 AM Start
09:29:01 AM SB4002
04:08:39 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Recessed to 3:00 p.m. --
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= SB4002 RESOURCE REBATE PROGRAM FOR RESIDENTS TELECONFERENCED
Moved CSSB 4002(FIN) Out of Committee
SENATE BILL NO. 4002                                                                                                          
                                                                                                                                
     "An Act establishing the Alaska resource rebate program                                                                    
     and relating to the program; and providing for an                                                                          
     effective date."                                                                                                           
                                                                                                                                
Co-Chair Stedman  reported that  the details  of SB  4002 and                                                                   
its companion  appropriation  bill remain  to be worked  out.                                                                   
He  said  that   Power  Cost  Equalization  (PCE)   would  be                                                                   
addressed within the bill.                                                                                                      
                                                                                                                                
9:31:31 AM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  CSSB  4002,  labeled  25-                                                                   
GS4057\T, Finley/Cook, 8/1/08.   There being NO OBJECTION, it                                                                   
was so ordered.                                                                                                                 
                                                                                                                                
9:32:06 AM                                                                                                                    
                                                                                                                                
DAVID TEAL, DIRECTOR, LEGISLATIVE  FINANCE DIVISION, referred                                                                   
to a handout  entitled "Power Cost Equalization  Program - FY                                                                   
09  Costs  under  Various Assumptions"  (copy  on  file.)  He                                                                   
explained that it  compares the House and Senate  versions of                                                                   
the bill.   The current  floor rate  for PCE is  12.83 cents,                                                                   
computed by using the average  rates of Anchorage, Fairbanks,                                                                   
and Juneau.  SB 4002, which provides  for a two-year program,                                                                   
sets the  floor rate for  PCE at 10 cents.   There is  also a                                                                   
subsidy for  costs that exceed  the floor, up to  the ceiling                                                                   
rate of $1.15.   The maximum subsidy available is  $1.05.  In                                                                   
addition,  there are utilities  which  would not qualify  for                                                                   
money under the  PCE program, but which would  qualify for an                                                                   
alternative  distribution -  at  a minimum  of 5  cents.   It                                                                   
assumes rates  in rural areas in  FY 09 would increase  by 50                                                                   
percent.   In  urban areas  the  assumed rate  increase is  5                                                                   
percent.                                                                                                                        
                                                                                                                                
9:35:50 AM                                                                                                                    
                                                                                                                                
Mr. Teal explained program costs.   The $64 million amount is                                                                   
for those utilities currently on the PCE program.                                                                               
                                                                                                                                
Senator Elton  asked about the  per kilowatt hour  payment to                                                                   
new  utilities.   He  wondered about  the  definition of  new                                                                   
utilities.                                                                                                                      
                                                                                                                                
Mr. Teal  referred to  page 6 which  lists the new  utilities                                                                   
that are  currently ineligible  because  they are too  large.                                                                   
There  is a  cutoff  for eligibility  of  7,500 megawatts  in                                                                   
production.   There is also a  clause which prohibits  a four                                                                   
dam  pool   utility.    The   bill  repeals  both   of  those                                                                   
eligibility  restrictions  and  makes all  utilities  in  the                                                                   
state eligible  for PCE.   Senator  Elton summarized  that it                                                                   
affects new  utilities that are  being added to  the program.                                                                   
Mr. Teal said that is correct.                                                                                                  
                                                                                                                                
9:37:37 AM                                                                                                                    
                                                                                                                                
Mr. Teal  related that virtually  all utilities would  pay 10                                                                   
cents.   Others would pay  16 cents,  even for the  first 500                                                                   
kilowatts.  The urban rate - for  newly qualified utilities -                                                                   
would  be 10  cents or  lower.   The current  program in  the                                                                   
rural area  would be for about  $270.  This program  drops it                                                                   
to $177.   In each case there  is a reduction.  In  the rural                                                                   
areas it could be more substantial.                                                                                             
                                                                                                                                
9:39:36 AM                                                                                                                    
                                                                                                                                
Mr. Teal referred to page 6 to  explain the 5 cent reduction.                                                                   
Under PCE the rate  would fall to 10 cents for  utilities not                                                                   
currently eligible  for PCE.   The "bottom line"  information                                                                   
is on  page one.   The $21  million for community  facilities                                                                   
complies  with  current  law   and  is  a  reduction  in  the                                                                   
community's electric bill.                                                                                                      
                                                                                                                                
Co-Chair  Stedman asked  what could  be included  as part  of                                                                   
"community facilities".   Mr. Teal said the city  hall or any                                                                   
community-owned facility could  qualify.  It does not include                                                                   
schools or commercial businesses.                                                                                               
                                                                                                                                
Co-Chair Stedman  requested an  explanation of the  dispersal                                                                   
of the  $21 million.  Mr.  Teal explained that  the community                                                                   
would receive  an electric  bill and then  get it  reduced by                                                                   
the utility.                                                                                                                    
                                                                                                                                
9:42:22 AM                                                                                                                    
                                                                                                                                
DARWIN  PETERSON,  STAFF,  CO-CHAIR  STEDMAN,  explained  the                                                                   
changes  in the  new CS  to SB  4002.   He  related that  the                                                                   
energy  package  is  a three-legged  stool:    PCE,  resource                                                                   
rebate, and emergency energy relief  - a heating oil subsidy.                                                                   
                                                                                                                                
Co-Chair Hoffman pointed out that  the key factor is that the                                                                   
programs  are for  two years so  that Alaskans  can count  on                                                                   
energy relief and  so that the legislature can  work on long-                                                                   
term solutions.                                                                                                                 
                                                                                                                                
9:45:17 AM                                                                                                                    
                                                                                                                                
Mr. Peterson  added that  the resource  rebate is a  one-time                                                                   
payout.                                                                                                                         
                                                                                                                                
Mr.  Peterson referred  to page  4,  a change  in Section  7,                                                                   
which  deals  with  the  resource  rebate.    It  allows  for                                                                   
veterans  who don't  apply for  the  Permanent Fund  Dividend                                                                   
(PFD) to be eligible for the program.                                                                                           
                                                                                                                                
Mr. Peterson turned  to page 5, Section 8,  the energy relief                                                                   
portion  of  the  bill.    Lines  19-22  incorporate  Senator                                                                   
Elton's ideas about  the reimbursement of the  sales tax paid                                                                   
on heating oil.                                                                                                                 
                                                                                                                                
Mr.  Peterson  reported  that  page  6,  lines  3-8,  is  new                                                                   
language that requires landlords  to pass on the savings from                                                                   
the resource rebate to renters  on a pro rata basis.  Failure                                                                   
to  do so  is  a violation  of  AS  45.50.471,  which is  the                                                                   
Unlawful Trade Acts and Practices statute.                                                                                      
                                                                                                                                
9:47:01 AM                                                                                                                    
                                                                                                                                
Mr.  Peterson  moved  on  to  page  6,  line  25,  where  the                                                                   
requirement that a  business that sells fuel oil  has to be a                                                                   
qualified distributor was deleted.   He gave an example of an                                                                   
area in rural Alaska where this would apply.                                                                                    
                                                                                                                                
Mr. Peterson turned to page 6,  line 27, through page 7, line                                                                   
3,   to   describe   "anti-gouging"   language   to   prevent                                                                   
distributors from  artificially inflating prices  in response                                                                   
to the new program.                                                                                                             
                                                                                                                                
Mr.  Peterson detailed  on  page 9,  lines  2-4, a  technical                                                                   
change  in the  criminal  section.   It makes  it  a Class  A                                                                   
misdemeanor for someone to use  fuel that has been reimbursed                                                                   
for this program for purposes  other than a primary residence                                                                   
or for a building that is owned by a government entity.                                                                         
                                                                                                                                
9:48:47 AM                                                                                                                    
                                                                                                                                
Senator Dyson  assumed it was  inappropriate to use  fuel for                                                                   
boats or  vehicles.  Mr. Peterson  said that the  language is                                                                   
clear that fuel must be used for primary residences.                                                                            
                                                                                                                                
Co-Chair  Stedman  asked  about a  live-aboard's  ability  to                                                                   
access 600  gallons of fuel  for their  boat.  He  offered to                                                                   
check on that issue.                                                                                                            
                                                                                                                                
9:50:01 AM                                                                                                                    
                                                                                                                                
Co-Chair   Hoffman   thought   that   if   the   number   was                                                                   
substantially   higher  than   600  gallons,   it  could   be                                                                   
considered abuse.                                                                                                               
                                                                                                                                
Senator  Huggins wondered  where  the language  referring  to                                                                   
senior housing was.  Mr. Peterson  said there was no language                                                                   
specific to  that issue.  If  the housing is owned  by Alaska                                                                   
Housing Finance Corporation it would not qualify.                                                                               
                                                                                                                                
Senator Huggins noted that seniors  in his district need some                                                                   
benefit also.                                                                                                                   
                                                                                                                                
9:52:07 AM                                                                                                                    
                                                                                                                                
Senator Olson asked  about the resource rebate  as it applies                                                                   
to North Slope  Borough residents.  Mr. Peterson  agreed that                                                                   
those residents would not qualify.                                                                                              
                                                                                                                                
Senator  Olson  voiced  concern about  his  constituents  not                                                                   
benefitting by this legislation.                                                                                                
                                                                                                                                
Senator  Olson asked  if  there  are any  changes  in the  CS                                                                   
regarding Power Cost Equalization  as it relates to the North                                                                   
Slope Borough.  Mr. Peterson deferred to Ms. Fisher-Goad.                                                                       
                                                                                                                                
9:54:33 AM                                                                                                                    
                                                                                                                                
SARAH  FISHER-GOAD,  DEPUTY DIRECTOR  OF  OPERATIONS,  ALASKA                                                                   
INDUSTRIAL  DEVELOPMENT  AND   EXPORT  AUTHORITY  AND  ALASKA                                                                   
ENERGY  AUTHORITY,  DEPARTMENT  OF  COMMERCE,  COMMUNITY  AND                                                                   
ECONOMIC  DEVELOPMENT, said  the  North Slope  Borough has  a                                                                   
subsidized rate of 15 cents per  kilowatt hour, so they would                                                                   
qualify for the 10 cents per kilowatt hour rate.                                                                                
                                                                                                                                
Ms. Fisher-Goad  commented on  a previous question  regarding                                                                   
eligible   community  facilities.     Eligibility   would  be                                                                   
determined by  AEA.  Those  facilities would not  be eligible                                                                   
if they are  owned by federal or state entities.   City-owned                                                                   
facilities  would qualify  and  would share  in a  collective                                                                   
amount of kilowatt hours.                                                                                                       
                                                                                                                                
9:57:26 AM                                                                                                                    
                                                                                                                                
Senator  Huggins  questioned  categories  of  senior  housing                                                                   
program eligibility.   Ms.  Fisher-Goad said that  non-profit                                                                   
senior housing would  qualify.  She referred to  page 6, line                                                                   
3, to explain  that it if they are not  governmentally owned,                                                                   
they would qualify.                                                                                                             
                                                                                                                                
Senator  Huggins needed  a  definitive answer.    He gave  an                                                                   
example of ten seniors and questioned  if the residents would                                                                   
be eligible.   Ms.  Fisher-Goad thought that  each unit  in a                                                                   
multi-family  building  would  be  eligible  for  up  to  300                                                                   
gallons of fuel.  The owner could  pass on the savings to the                                                                   
tenants.                                                                                                                        
                                                                                                                                
Senator  Huggins  asked  for   location  of  the  300  gallon                                                                   
reference.  Ms. Fisher-Goad said page 5, line 25.                                                                               
                                                                                                                                
10:01:00 AM                                                                                                                   
                                                                                                                                
Senator  Dyson  appreciated  the  line of  questioning.    He                                                                   
assumed  that  non-profits would  also  qualify.   He  wanted                                                                   
assurance that those were intrinsic in the bill.                                                                                
                                                                                                                                
Mr. Peterson explained  that the legislation  now states that                                                                   
"a  person"  would  be  eligible.     That  definition  is  a                                                                   
corporation,   company,   partnership,   firm,   association,                                                                   
organization,  business,  trust, or  society,  as  well as  a                                                                   
natural  person.    A  non-profit  would  qualify;  a  purely                                                                   
government-owned building would not.                                                                                            
                                                                                                                                
10:03:32 AM                                                                                                                   
                                                                                                                                
Senator Huggins asked for the administration's view.                                                                            
                                                                                                                                
RANDALL  RUARO, SPECIAL  ASSISTANT, OFFICE  OF THE  GOVERNOR,                                                                   
could not state the administration's position on the bill.                                                                      
                                                                                                                                
Senator  Huggins thought  it was important  to work  together                                                                   
with the  administration on the  bill.  Mr. Ruaro  noted that                                                                   
the Department of Law has been working on the bill.                                                                             
                                                                                                                                
Co-Chair  Stedman  requested  that information  in  a  timely                                                                   
manner.                                                                                                                         
                                                                                                                                
10:05:23 AM                                                                                                                   
                                                                                                                                
Co-Chair Hoffman referred  to page 4 - the  resource rebate -                                                                   
and thought there  should be further dialogue  on that issue.                                                                   
He questioned what  the preferences of the Committee  and the                                                                   
legislature are,  and what the  expectations of  Alaskans are                                                                   
regarding the resource rebate.                                                                                                  
                                                                                                                                
Senator Huggins  asked for the total  cost of the bill.   Co-                                                                   
Chair Stedman said the staff is working on the fiscal note.                                                                     
                                                                                                                                
AT-EASE:       10:06:24 AM                                                                                                    
                                                                                                                                
RECONVENE:     10:11:02 AM                                                                                                    
                                                                                                                                
Co-Chair   Stedman   addressed  Senator   Huggins'   question                                                                   
referring to the  fiscal note.  The new fiscal  note is dated                                                                   
8/2/08, 9:30 AM.                                                                                                                
                                                                                                                                
Co-Chair  Hoffman noted  that  the $140  million is  directly                                                                   
related to the PCE program.                                                                                                     
                                                                                                                                
Co-Chair Stedman  added that  the home  heating cost  is $173                                                                   
million.  The addition  of the rebate to the  PFD costs about                                                                   
$155  million,  plus  $500,000  for  administering  the  hold                                                                   
harmless component.  The total is roughly $468 million.                                                                         
                                                                                                                                
Co-Chair Hoffman termed it "a good start".                                                                                      
                                                                                                                                
Co-Chair  Stedman summarized  that  total  cost was  slightly                                                                   
under $500 million.                                                                                                             
                                                                                                                                
10:12:58 AM                                                                                                                   
                                                                                                                                
MILES   BAKER,   STAFF,  CO-CHAIR   STEDMAN,   directed   the                                                                   
Committee's  attention  to  three  fiscal notes.    The  most                                                                   
recent one  is for PCE changes  and is dated 8/2/08.   On all                                                                   
the fiscal notes, the appropriation  required column is blank                                                                   
because  they  are  funded  through  an  appropriation  bill.                                                                   
Based on proposed  changes, an additional  $140,775,000 would                                                                   
have to be appropriated into the  PCE fund.  There is already                                                                   
$28  million  in that  fund.    He reported  that  the  total                                                                   
program  cost  is  $168,800,000  as  reflected  in  the  2010                                                                   
column.    In 2011  the  amount  drops  back to  the  current                                                                   
funding level of  $32,603,000.  He explained  the fund source                                                                   
column, which contain AEA's projections.   The expectation is                                                                   
that $25.8 million can be pulled from the fund yearly.                                                                          
                                                                                                                                
10:15:53 AM                                                                                                                   
                                                                                                                                
Mr. Baker  explained the Department  of Revenue  fiscal note,                                                                   
dated 7/31/08, written to Version  L, for $155.1 million.  It                                                                   
is the cost of the $250 additional  payment added to the PFD.                                                                   
It is  based on 622,000  Alaskans receiving the  rebate, plus                                                                   
administrative costs.                                                                                                           
                                                                                                                                
Mr.  Baker explained  the Department  of Commerce,  Community                                                                   
and  Economic Development  fiscal note  for $172,889,000  for                                                                   
home fuel assistance for two years,  dated 7/31/08.  It is an                                                                   
estimated cost for providing the fuel rebate.                                                                                   
                                                                                                                                
Mr. Baker reported  that the total of the three  fiscal notes                                                                   
is just shy of $500 million.                                                                                                    
                                                                                                                                
10:18:13 AM                                                                                                                   
                                                                                                                                
Senator Elton noted that there  was a financial obligation of                                                                   
about $450 million for FY 2010.   Mr. Baker responded that it                                                                   
was  about $400  million.   Senator Elton  thought the  total                                                                   
cost of  the bill would be  about the same as  the Governor's                                                                   
bill.  Co-Chair  Hoffman reminded the Committee  that the new                                                                   
programs are for two years.                                                                                                     
                                                                                                                                
Co-Chair Stedman  pointed out  that more  work was  needed on                                                                   
the rebate.                                                                                                                     
                                                                                                                                
AT-EASE:       10:21:06 AM                                                                                                    
                                                                                                                                
RECONVENE:     3:28:10 PM                                                                                                     
                                                                                                                                
Co-Chair   Stedman   reported   that   there   were   several                                                                   
amendments.                                                                                                                     
                                                                                                                                
Senator Olson MOVED to ADOPT Amendment 6:                                                                                       
                                                                                                                                
     Page 4, line 15, following "persons":                                                                                      
     Insert "and municipalities"                                                                                                
                                                                                                                                
     Page 5, line 15, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
     Page 5, line 16, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
     Page 5, line 30, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
     Page 7, line 11, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
     Page 7, line 11, following "person's":                                                                                     
     Insert "or municipality's"                                                                                                 
                                                                                                                                
     Page 7, line 15, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
    Page 7, line 17, following "person" in both places:                                                                         
     Insert "or municipality" in both places                                                                                    
                                                                                                                                
     Page 7, line 18, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
     Page 8, line 25, following "person":                                                                                       
     Insert "or municipality"                                                                                                   
                                                                                                                                
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
Senator Olson  explained that  Amendment 6 inserts  the words                                                                   
"and municipalities"  in  a number of  places throughout  the                                                                   
bill.     He  explained  the   North  Slope  Borough's   fuel                                                                   
assistance program.   The amendment  takes that  into account                                                                   
and  makes  for  a  more  equitable  situation.    He  quoted                                                                   
statistics about  price versus oil  usage over the  past year                                                                   
in the borough.   He reported that there were  670 households                                                                   
in his borough and it would take  $1 million to include those                                                                   
people in the rebate.                                                                                                           
                                                                                                                                
3:31:58 PM                                                                                                                    
                                                                                                                                
Senator  Elton listed  three ways  to deal  with this  issue:                                                                   
accept the current version of  the bill, adopt the amendment,                                                                   
or for the Borough to end its subsidization program.                                                                            
                                                                                                                                
Senator Olson  said those  were theoretical  ways.   He spoke                                                                   
against dismantling  the subsidy program.  He  suggested that                                                                   
the most  considerate way to  deal with this  situation would                                                                   
be to adopt the amendment.                                                                                                      
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Dyson, Olson, Thomas                                                                                                  
OPPOSED: Elton, Huggins, Stedman                                                                                                
                                                                                                                                
Co-Chair Hoffman was absent for the vote.                                                                                       
                                                                                                                                
The motion failed 3-3.                                                                                                          
                                                                                                                                
3:33:41 PM                                                                                                                    
                                                                                                                                
Senator Thomas MOVED to ADOPT Amendment 9:                                                                                      
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
     Insert  "relating to  grants from  the renewable  energy                                                                 
     grant fund;"                                                                                                             
                                                                                                                                
     Page 1, following line 7:                                                                                                  
     Insert new bill sections to read:                                                                                          
     "*  Section 1. AS  42.45.045(e), as  enacted in  sec. 3,                                                                 
     ch. 31, SLA 2008, is amended to read:                                                                                      
          (e)  In consultation with the advisory committee                                                                      
     established in (i) of this  section, the authority shall                                                                   
     make  recommendations   to  the  legislature   regarding                                                                   
     eligible applicants'  projects that finance  feasibility                                                                   
     studies,   reconnaissance   studies,   energy   resource                                                                   
     monitoring,   and  construction   of  renewable   energy                                                                   
     projects,  alternative  energy   projects,  natural  gas                                                               
     projects,     or    transmission     or     distribution                                                                   
     infrastructure   located   in  Alaska   that  meet   the                                                                   
     requirements  of (f),  (g),  [OR] (h),  or  (m) of  this                                                               
     section, as  applicable, and  shall, at least  once each                                                                   
     year,  solicit  from  the   advisory  committee  funding                                                                   
     recommendations for all grants.                                                                                            
     * Sec.  2. AS 42.45.045(k),  as enacted  in sec.  3, ch.                                                                 
     31, SLA 2008, is amended to read:                                                                                          
          (k)  The legislature may appropriate money for                                                                        
     grants  from   the  renewable  energy  grant   fund  for                                                                   
     [RENEWABLE ENERGY] projects described in this section.                                                                     
     * Sec.  3. AS 42.45.045, as  enacted in sec. 3,  ch. 31,                                                                 
     SLA  2008, is  amended  by adding  a  new subsection  to                                                                   
     read:                                                                                                                      
          (m)  For an alternative energy project to qualify                                                                     
     for a  grant recommendation  under (e) of  this section,                                                                   
     the project must be a                                                                                                      
               (1) new project not in operation on the                                                                          
     effective date  of this bill  section or an  addition to                                                                   
     an  existing project  made after  the effective  date of                                                                   
     this bill section; and                                                                                                     
               (2) facility that generates energy or fuel                                                                       
     that is  less expensive, more  efficient, or has  a less                                                                   
     adverse  effect on  the environment  than the energy  or                                                                   
     fuel that was previously used by a community."                                                                             
                                                                                                                                
     Page 1, line 8:                                                                                                            
     Delete "Section 1"                                                                                                       
     Insert "Sec. 4"                                                                                                          
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 4:                                                                                                            
     Delete "sec. 1"                                                                                                            
     Insert "sec. 4"                                                                                                            
                                                                                                                                
     Page 3, line 20:                                                                                                           
     Delete "sec. 4"                                                                                                            
     Insert "sec. 7"                                                                                                            
                                                                                                                                
     Page 4, following line 9:                                                                                                  
     Insert new bill sections to read:                                                                                          
     "* Sec.  9. The  uncodified law of  the State  of Alaska                                                                 
     enacted in  sec. 1(b), ch.  31, SLA 2008, is  amended to                                                                   
     read:                                                                                                                      
          (b)  It is the intent of the legislature that each                                                                    
     year  for the  next five  years  $50,000,000 in  capital                                                                   
     funds be appropriated to  fund renewable energy projects                                                               
     recommended by the Alaska  Energy Authority as described                                                                   
     in  AS 42.45.045(f) and  sec. [SECS.  3 AND]  6 of  this                                                               
     Act.                                                                                                                       
     * Sec.  10. The  uncodified law of  the State  of Alaska                                                                 
     enacted  in sec.  6, ch.  31,  SLA 2008,  is amended  to                                                                   
     read:                                                                                                                      
          RENEWABLE ENERGY GRANTS DURING STATE FISCAL YEAR                                                                      
     2009.  (a) For  the fiscal  year  ending June 30,  2009,                                                                   
     from  an  appropriation  made  under  the  statement  of                                                                   
     intent  set out  in sec.  1(b) of this  Act, the  Alaska                                                                   
     Energy Authority  shall distribute grants  to applicants                                                                   
     determined by  the authority and that meet  the criteria                                                                   
     in AS 42.45.045(f)  - (h) and (m) [, ADDED  BY SEC. 3 OF                                                               
     THIS ACT,]  based on the  procedure described in  (b) of                                                                   
     this section.                                                                                                              
          (b)        For    administering     grants    under                                                                   
     AS 42.45.045(f)  - (h)  and (m)  [, ADDED  BY SEC.  3 OF                                                               
     THIS  ACT,] for the  fiscal year  ending June 30,  2009,                                                                   
     notwithstanding  AS 42.45.045(d),  (e), and  (i) -  (l),                                                                   
     added by sec. 3 of this Act,                                                                                               
               (1)  the Alaska Energy Authority shall submit                                                                    
     to  the  Legislative  Budget  and  Audit  Committee  for                                                                   
     review  a  revised  program  setting  out  the  proposed                                                                   
     grants;                                                                                                                    
               (2)  45 days shall elapse before commencement                                                                    
     of  expenditures under  the revised  program unless  the                                                                   
     Legislative   Budget   and   Audit   Committee   earlier                                                                   
     recommends otherwise;                                                                                                      
               (3)  should the Legislative Budget and Audit                                                                     
     Committee  recommend within the  45-day period  that the                                                                   
     Alaska Energy Authority not  award the grants as set out                                                                   
     in  the revised  program,  the Alaska  Energy  Authority                                                                   
     shall again  review the grant  applications and,  if the                                                                   
     Alaska  Energy  Authority  determines to  authorize  the                                                                   
     expenditures, the Alaska  Energy Authority shall provide                                                                   
     the  Legislative  Budget  and  Audit  Committee  with  a                                                                   
     statement  of  the  Alaska  Energy  Authority's  reasons                                                                   
     before commencement of expenditures  making the approved                                                                   
     grants."                                                                                                                   
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 14:                                                                                                           
     Delete "sec. 7"                                                                                                            
     Insert "sec. 12"                                                                                                           
                                                                                                                                
     Page 4, line 15:                                                                                                           
     Delete "sec. 8"                                                                                                            
     Insert "sec. 13"                                                                                                           
                                                                                                                                
     Page 9, line 13:                                                                                                           
     Delete "Sections 8(a), (b), (d) - (f), (i) - (o), and                                                                      
     (q)"                                                                                                                       
     Insert "Sections 13(a), (b), (d) - (f), (i) - (o), and                                                                     
     (q)"                                                                                                                       
                                                                                                                                
     Page 9, line 15:                                                                                                           
     Delete "Sections 2 and 5"                                                                                                  
     Insert "Sections 5 and 8"                                                                                                  
                                                                                                                                
     Page 9, line 16:                                                                                                           
     Delete "Sections 1, 3, 4, 9, and 10"                                                                                       
     Insert "Sections 4, 6, 7, 14, and 15"                                                                                      
                                                                                                                                
     Page 9, line 17:                                                                                                           
     Delete "Sections 6 - 8"                                                                                                    
     Insert "Sections 1 - 3 and 9 - 13"                                                                                         
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
Senator Thomas explained that  the amendment adds alternative                                                                   
fuel and power  projects to existing statute.   The intention                                                                   
is that  it would  require those projects  to go  through the                                                                   
same process as the renewable projects do.                                                                                      
                                                                                                                                
Senator Thomas reported that not  all areas of the state have                                                                   
access to  the same types  of power generation  and/or energy                                                                   
resources.    He  argued for  the  inclusion  of  alternative                                                                   
energy projects.                                                                                                                
                                                                                                                                
Senator Thomas  referred to  page 1, lines  10 and  11, which                                                                   
adds alternative energy projects to the list.                                                                                   
                                                                                                                                
Co-Chair Stedman MAINTAINED his OBJECTION.                                                                                      
                                                                                                                                
3:35:31 PM                                                                                                                    
                                                                                                                                
Senator Dyson  asked what is  included in alternative  energy                                                                   
projects.  He specifically inquired  about fish waste, lumber                                                                   
waste, and clean coal.                                                                                                          
                                                                                                                                
Senator  Thomas  explained  the   definition  of  alternative                                                                   
energy projects on  page 1, lines 20 - 23, and  page 2, lines                                                                   
1 - 4.  They include those projects  defined by AEA.  It does                                                                   
not  affect   the  $50   million  already  appropriated   for                                                                   
renewable energy projects; it  looks forward to future money.                                                                   
                                                                                                                                
Senator  Elton recalled  a  previous debate  where  renewable                                                                   
energy was  carefully defined.   It  did include biomass  and                                                                   
wood  and fish  waste.   The major  effect  of the  amendment                                                                   
would be  the addition of  coal.  He  said he was  opposed to                                                                   
voting on it  now because of a pending,  comprehensive energy                                                                   
plan.  He suggested waiting for that plan.                                                                                      
                                                                                                                                
3:38:50 PM                                                                                                                    
                                                                                                                                
Senator  Olson questioned  whether the  amendment requires  a                                                                   
fiscal  note.   Senator  Thomas explained  that  it does  not                                                                   
appropriate any money.                                                                                                          
                                                                                                                                
Senator Huggins echoed Senator Elton's comments.                                                                                
                                                                                                                                
Co-Chair Stedman shared the same view.                                                                                          
                                                                                                                                
Senator Thomas  said the  amendment was  just an addition  to                                                                   
the  language  to allow  the  consideration of  other  energy                                                                   
projects.                                                                                                                       
                                                                                                                                
3:40:52 PM                                                                                                                    
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Olson, Thomas, Dyson                                                                                                  
                                                                                                                                
OPPOSED: Elton, Huggins, Stedman, Hoffman                                                                                       
                                                                                                                                
The motion failed 3-4.                                                                                                          
                                                                                                                                
3:41:45 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman MOVED to ADOPT Amendment 7:                                                                                    
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
     Insert "amending the bulk fuel bridge loan fund;"                                                                        
                                                                                                                                
     Page 1, following line 7:                                                                                                  
     Insert a new bill section to read:                                                                                         
     "* Section 1. AS 29.60.660(c) is amended to read:                                                                      
          (c)  Loans made from the bulk fuel bridge loan                                                                        
     fund to one borrower in a fiscal year                                                                                      
               (1) may not exceed $750,000 [$500,000]; and                                                                  
               (2) shall be repaid within one year after the                                                                    
     date of the award."                                                                                                        
                                                                                                                                
     Page 1, line 8:                                                                                                            
     Delete "Section 1"                                                                                                       
     Insert "Sec. 2"                                                                                                          
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 4:                                                                                                            
     Delete "sec. 1"                                                                                                            
     Insert "sec. 2"                                                                                                            
                                                                                                                                
     Page 3, line 20:                                                                                                           
     Delete "sec. 4"                                                                                                            
     Insert "sec. 5"                                                                                                            
                                                                                                                                
     Page 3, following line 9:                                                                                                  
     Insert a new bill section to read:                                                                                         
    "* Sec. 7. AS 42.45.250(e) is amended to read:                                                                          
          (e)  Loans made from the bulk fuel revolving loan                                                                     
     fund to one borrower in any fiscal year                                                                                    
               (1)  may not exceed $750,000 [$500,000], or,                                                                 
     if the  borrower is a cooperative  corporation organized                                                                   
     under  AS 10.15  or an  electric  cooperative  organized                                                                   
     under AS 10.25  and uses the loan to purchase  bulk fuel                                                                   
     on behalf  of more  than one  community, may not  exceed                                                                   
     the  lesser of  $750,000  [$500,000]  multiplied by  the                                                               
     number of communities  on whose behalf the  bulk fuel is                                                                   
     to be purchased, or $1,800,000;                                                                                            
               (2)  shall be repaid in one year or less; and                                                                    
               (3) may not exceed 90 percent of the                                                                             
     wholesale price of the fuel purchased."                                                                                    
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 14:                                                                                                           
     Delete "sec. 7"                                                                                                            
     Insert "sec. 9"                                                                                                            
                                                                                                                                
     Page 4, line 15:                                                                                                           
     Delete "sec. 8"                                                                                                            
     Insert "sec. 10"                                                                                                           
                                                                                                                                
     Page 9, line 13:                                                                                                           
     Delete "Sections  8(a), (b), (d)  - (f), (i) -  (o), and                                                                   
     (q)"                                                                                                                       
     Insert "Sections  10(a), (b), (d) - (f), (i)  - (o), and                                                                   
     (q)"                                                                                                                       
                                                                                                                                
     Page 9, line 15:                                                                                                           
     Delete "Sections 2 and 5"                                                                                                  
     Insert "Sections 3 and 6"                                                                                                  
                                                                                                                                
     Page 9, line 16:                                                                                                           
     Delete "Sections 1, 3, 4, 9, and 10"                                                                                       
     Insert "Sections 2, 4, 5, 11, and 12"                                                                                      
                                                                                                                                
     Page 9, line 17:                                                                                                           
     Delete "Sections 6 - 8"                                                                                                    
     Insert "Sections 1 and 7 - 10"                                                                                             
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
3:42:30 PM                                                                                                                    
                                                                                                                                
AMANDA   RYDER,   DIRECTOR   OF    ADMINISTRATIVE   SERVICES,                                                                   
DEPARTMENT OF  COMMERCE, COMMUNITY AND ECONOMIC  DEVELOPMENT,                                                                   
explained  the impact  of Amendment 7,  which would  increase                                                                   
the cap for the bulk fuel bridge  loan fund to $750,000.  The                                                                   
impact  will  add about  $2.5  million  to  the need  of  the                                                                   
program.                                                                                                                        
                                                                                                                                
AT-EASE:       3:43:31 PM                                                                                                     
                                                                                                                                
RECONVENE:     3:43:56 PM                                                                                                     
                                                                                                                                
Ms. Ryder continued to explain  Amendment 7.  The bridge loan                                                                   
fund has  zero percent  interest loans.   There are  about 16                                                                   
outstanding loans.   Inquiries for  six more loans  have been                                                                   
received and more are expected.                                                                                                 
                                                                                                                                
Senator  Dyson   asked  for  further  clarification   of  the                                                                   
amendment.                                                                                                                      
                                                                                                                                
Ms. Ryder  reported that the  amendment would  change statute                                                                   
and amend  two existing programs,  and it adds a  new section                                                                   
to version T of the bill.                                                                                                       
                                                                                                                                
Senator Dyson  asked if  the bill would  be renumbered.   Ms.                                                                   
Ryder clarified that the amendment  changes two existing loan                                                                   
funds and is not related to the PCE program.                                                                                    
                                                                                                                                
Co-Chair Stedman  added that the reason for  the amendment is                                                                   
to put a ceiling  on the loan program due to  rising costs of                                                                   
fuel.   Ms. Ryder stated  that more communities  are expected                                                                   
to need loans due  to the rising price of fuel.   Funding for                                                                   
the bridge loan fund can only  be received if the communities                                                                   
have been denied the bulk fuel loan fund by AEA.                                                                                
                                                                                                                                
3:47:01 PM                                                                                                                    
                                                                                                                                
Senator  Huggins asked  how  often the  bridge  loan fund  is                                                                   
exercised  and what  the delinquency  record is.   Ms.  Ryder                                                                   
reported that there has been no  delinquency on the 16 loans.                                                                   
Senator  Huggins   asked  if  she  was  in   support  of  the                                                                   
amendment.  Ms. Ryder related  that she has had communication                                                                   
with  the director  of Community  and  Regional Affairs,  who                                                                   
supports the idea of obtaining additional funds.                                                                                
                                                                                                                                
Senator Olson  asked if the  16 outstanding loans  were under                                                                   
the bridge loan fund.  Ms. Ryder said yes.                                                                                      
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.   There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
3:49:30 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT  Amendment 8 and OBJECTED for                                                                   
discussion purposes:                                                                                                            
                                                                                                                                
     Page 6, lines 3-8                                                                                                          
     Delete all material                                                                                                        
     Insert:                                                                                                                    
          "(c)A landlord or lessor that receives a payment                                                                      
     under  this  section  must  pass  on a  benefit  to  its                                                                   
     tenants  by lowering the  amount of  rent by the  amount                                                                   
     attributable to the tenant's  unit. A landlord or lessor                                                                   
     may retain up  to 10 percent of the payment  required to                                                                   
     be passed on to tenants,  to cover administrative costs.                                                                   
     Failure to  comply with this requirement  is a violation                                                                   
     of AS 45.50.471.  The authority may audit  the books and                                                                   
     records  of a  landlord or  lessor  for compliance  with                                                                   
     this subsection."                                                                                                          
                                                                                                                                
Mr. Baker explained that the amendment  would help to rectify                                                                   
concerns about apartment complexes  and multi-dwellings.  The                                                                   
amendment  does  not  provide   for  heating  assistance  for                                                                   
commercial properties, but would  assist renters.  He related                                                                   
how the payment  would be passed  on to the renter.   He said                                                                   
that  the   landlord  is   able  to   take  10  percent   for                                                                   
administrative costs.                                                                                                           
                                                                                                                                
3:54:15 PM                                                                                                                    
                                                                                                                                
Senator Dyson  appreciated the amendment.  He  wondered about                                                                   
the fairness of  the timing.  Mr. Baker stated  that previous                                                                   
drafts dealt with this issue and  the amendment clarifies the                                                                   
details and provides for an audit.                                                                                              
                                                                                                                                
Senator Huggins  said that it  appears that the  tenant could                                                                   
be commercial.   He  asked how  much 10  percent would  be in                                                                   
dollars.   Mr. Baker said 10  percent of the rebate  could be                                                                   
used for  administrative costs and  10 percent would  go back                                                                   
to the tenant.                                                                                                                  
                                                                                                                                
3:58:54 PM                                                                                                                    
                                                                                                                                
Senator Elton  said the  number of  units is another  factor.                                                                   
Mr. Baker  said the  5-unit complex would  be eligible  for 5                                                                   
times 300 gallons  during the 7 month window.   Senator Elton                                                                   
did the math to calculate the administrative fee.                                                                               
                                                                                                                                
Senator  Thomas asked  if  a landlord  could  justify a  rent                                                                   
increase without  factoring in  fuel costs.   He wondered  if                                                                   
this overrides a lease.  Mr. Baker  said his understanding is                                                                   
that  the landlord  who  receives  a rebate  must  pass on  a                                                                   
benefit to  the tenant.  He said  an attempt was made  to try                                                                   
to attribute the benefit to the fuel costs.                                                                                     
                                                                                                                                
4:03:26 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION to Amendment 8.                                                                         
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to ADOPT  conceptual Amendment  10 to                                                                   
change the amount of $250 on page  4, line 21, and throughout                                                                   
the  bill, to  $500.   There being  NO OBJECTION,  it was  so                                                                   
ordered.                                                                                                                        
                                                                                                                                
Co-Chair Stedman MOVED to ADOPT conceptual amendment 11:                                                                        
                                                                                                                                
     Page 7, lines 6-7                                                                                                          
     Delete "on its billing statement"                                                                                          
     Insert "in a manner prescribed by AEA"                                                                                     
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion purposes.                                                                              
                                                                                                                                
4:06:46 PM                                                                                                                    
                                                                                                                                
Ms.  Fisher-Goad  explained  the   amendment  is  to  provide                                                                   
flexibility  to  AEA  to  work   with  the  distributors  and                                                                   
residential customers to implement  the program.  She did not                                                                   
have objections to the amendment.                                                                                               
                                                                                                                                
Senator  Elton   suggested  a   friendly  amendment   to  use                                                                   
"authority" instead of AEA.                                                                                                     
                                                                                                                                
Ms. Fisher-Goad agreed.                                                                                                         
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.   There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
4:08:39 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  MOVED to REPORT CSSB 4002  out of committee                                                                   
with individual  recommendations and the  accompanying fiscal                                                                   
notes.  There being NO OBJECTION, it was so ordered.                                                                            
                                                                                                                                
CSSB 4002  (FIN) was  REPORTED  out of Committee  with  a "do                                                                   
pass"  recommendation  and  with  three  new  Senate  Finance                                                                   
Committee fiscal notes.                                                                                                         

Document Name Date/Time Subjects