Legislature(2007 - 2008)SENATE FINANCE 532

08/06/2008 09:00 AM FINANCE


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09:28:53 AM Start
09:31:00 AM SB4001
05:42:58 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB4001 APPROP: SUPP/CAP/OTHER RELATED TO AGIA TELECONFERENCED
Heard & Held
+ HB4001 APPROP: SUPP/CAP/OTHER RELATED TO AGIA TELECONFERENCED
Scheduled But Not Heard
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  SENATE FINANCE COMMITTEE                                                                                      
                       August 6, 2008                                                                                           
                         9:28 a.m.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate Finance Committee meeting                                                                    
to order at 9:28:53 AM.                                                                                                       
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
Senator Fred Dyson                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Miles Baker, Staff, Co-Chair Stedman                                                                                            
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
None                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 4001   "An Act making supplemental appropriations,                                                                           
          capital   appropriations,   reappropriations,   and                                                                   
          other  appropriations;   making  appropriations  to                                                                   
          capitalize  a fund; and providing for  an effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSSB 4001(FIN) was heard and HELD in Committee for                                                                    
          further consideration.                                                                                                
                                                                                                                                
Senate Bill No. 4001                                                                                                          
                                                                                                                                
     "An  Act  making  supplemental  appropriations,  capital                                                                   
     appropriations,     reappropriations,      and     other                                                                   
     appropriations;  making appropriations  to capitalize  a                                                                   
     fund; and providing for an effective date."                                                                                
                                                                                                                                
Co-Chair Hoffman MOVED to ADOPT CSSB 4001, labeled 25-                                                                          
GS3056\O, Kane, 8/5/08, as the working document.                                                                                
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion purposes.                                                                              
                                                                                                                                
9:31:00 AM                                                                                                                    
                                                                                                                                
MILES BAKER,  STAFF, CO-CHAIR STEDMAN,  went over the  CS for                                                                   
SB  4001.   He cited  two worksheets  breaking  down the  new                                                                   
numbers  pertaining to  the bill: Senate  Home Energy  Rebate                                                                   
Analysis  (copy  on file),  and  the Senate  Finance  Working                                                                   
Numbers (copy on  file).  The CS contains the  Alaska Gasline                                                                   
Inducement Act  (AGIA) appropriations as well  as elements of                                                                   
SB 4003,  which was  the Governor's  appropriation bill  that                                                                   
dealt with  energy-related  items such  as the energy  rebate                                                                   
and  the  Power   Cost  Equalization  (PCE)   program.    The                                                                   
intention is to have one appropriation  bill that covers both                                                                   
areas.                                                                                                                          
                                                                                                                                
Mr.  Baker explained  that Section  1 of  the bill  is a  $30                                                                   
million  general  fund  appropriation  to  the  gas  pipeline                                                                   
development  fund, which was  part of SB  4002.   Language in                                                                   
Section 9 adds this fund to those  funds that, the balance of                                                                   
which,  are overseen  by  the  Legislative Budget  and  Audit                                                                   
Committee (LB&A).   Of the $30  million, $10 million  will be                                                                   
immediately transferred to the  AGIA reimbursement fund.  The                                                                   
testimony  from  Mr.  Palmer  from  TransCanada  included  an                                                                   
expectation  to expend $54  million through  the end  of June                                                                   
30, 2009.  Fifty percent of that  would be the state's share,                                                                   
which is $27  million.  The appropriation of  $10 million now                                                                   
will be  followed by  another appropriation  in FY 10.   LB&A                                                                   
has the ability  to release the remaining funds  prior to the                                                                   
end of the fiscal year.                                                                                                         
                                                                                                                                
9:33:56 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  asked how long the $30 million  would last,                                                                   
in months.   Co-Chair  Stedman explained  that it would  last                                                                   
for this November and December  and into the first quarter of                                                                   
the next calendar  year.  Co-Chair Hoffman concluded  that it                                                                   
would last  through March.   Co-Chair  Stedman reported  that                                                                   
the billings for April, May, and  June would be billed to the                                                                   
state  in July,  which  would provide  time  for the  regular                                                                   
budget appropriation cycle to fund the entire next year.                                                                        
                                                                                                                                
Mr. Baker  moved  on to Section  2 of  the bill,  or the  PCE                                                                   
section.  The   administration  had  asked  for   a  $600,000                                                                   
supplemental  for PCE payments  for FY 08,  and a  $9 million                                                                   
supplemental  for FY  09, prior  to changes  made to the  PCE                                                                   
program.  Legislative  Finance estimated that  the $9 million                                                                   
request was potentially  $5 million low.  This  bill provides                                                                   
for a supplemental  appropriation in subsections  (a) and (b)                                                                   
for the current PCE program for  FY 08 and FY 09.  Subsection                                                                   
(c) on  page 2  is the  FY 09 appropriation  if the  Senate's                                                                   
proposed  PCE changes  are adopted.   Subsection  (a) is  not                                                                   
contingent  upon  legislation   passing;  subsection  (c)  is                                                                   
contingent on the passage of SB 4002.                                                                                           
                                                                                                                                
Mr. Baker then  moved on to Section 3 - the  appropriation to                                                                   
the   Department    of   Revenue    for   distribution    and                                                                   
administration of  the $500 per  person resource rebate.   It                                                                   
is estimated to be $310,100,000.                                                                                                
                                                                                                                                
Mr.  Baker  related  that  Section  4  is  the  $2.1  million                                                                   
appropriation  to   the  Department  of  Health   and  Social                                                                   
Services  for the hold  harmless provisions  of the  resource                                                                   
rebate  and also the  amount of  money that  would allow  the                                                                   
veterans' who have  not applied for the PFD to  apply for the                                                                   
rebate.                                                                                                                         
                                                                                                                                
Mr.  Baker  explained  that  Section  5  is  a  $360  million                                                                   
appropriation  to   the  Alaska  Energy  Authority   to  make                                                                   
emergency  energy  relief  payments and  administer  the  new                                                                   
program.   The breakout  of that  amount is  depicted on  the                                                                   
spreadsheet entitled "Senate Home Energy Rebate Analysis".                                                                      
                                                                                                                                
Mr.  Baker highlighted  Section  6, which  is  a $50  million                                                                   
supplemental  appropriation to  the Alaska Housing  Financing                                                                   
Corporation  (AHFC)  for  the Alaska  energy  efficient  home                                                                   
grant fund.                                                                                                                     
                                                                                                                                
9:40:09 AM                                                                                                                    
                                                                                                                                
Mr.  Baker  continued  to  explain   that  Section  7  is  an                                                                   
appropriation for the ceiling  changes that the Committee and                                                                   
Senate passed  in SB  4002 for the  bulk fuel revolving  loan                                                                   
program and the  bulk fuel bridge loan program.   He detailed                                                                   
the subsections of Section 7.                                                                                                   
                                                                                                                                
Mr.  Baker  related  that  Section   8  includes  a  $147,600                                                                   
appropriation  to the Department  of Commerce, Community  and                                                                   
Economic  Development to  recalculate PCE  levels for  FY 09,                                                                   
and $1,550,000  to the Department of Commerce,  Community and                                                                   
Economic Development to offset  the cost of fuel to the North                                                                   
Slope Borough for FY 09.                                                                                                        
                                                                                                                                
Mr. Baker detailed  Section 9, which is the  language section                                                                   
required to add  the Alaska gas pipeline development  fund to                                                                   
the program receipts reviewed by LB&A.                                                                                          
                                                                                                                                
Mr.   Baker  described   Section   10   as   a  $50   million                                                                   
appropriation to the renewable  energy grant fund as a result                                                                   
of an amendment made to SB 4002.                                                                                                
                                                                                                                                
Senator  Elton  asked  if  Section   10  would  increase  the                                                                   
renewable energy fund by $50 million  for alternative energy.                                                                   
He concluded  that it would simply  increase the fund  by $50                                                                   
million, not  necessarily designated for  alternative energy.                                                                   
Mr. Baker said that was correct.                                                                                                
                                                                                                                                
9:45:03 AM                                                                                                                    
                                                                                                                                
Mr.  Baker  related  that Section  11  ensures  that  certain                                                                   
appropriations  do  not lapse.    Section  12 refers  to  the                                                                   
$600,000  PCE supplemental  for  FY 08.   Section  13 is  the                                                                   
contingency  language  that states  that  all  appropriations                                                                   
related to the energy relief program  are contingent upon the                                                                   
passage  of  HB   4002.    It  also  ensures   that  the  PCE                                                                   
supplemental goes into effect.                                                                                                  
                                                                                                                                
Senator Olson asked if the appropriations  were for one year.                                                                   
                                                                                                                                
Mr. Baker said yes.                                                                                                             
                                                                                                                                
9:46:37 AM                                                                                                                    
                                                                                                                                
Senator Huggins inquired if there  would be an opportunity to                                                                   
insert  language from  the commissioner's  report to  LB&A on                                                                   
AGIA.                                                                                                                           
                                                                                                                                
Co-Chair  Stedman  noted  the   concern  about  the  required                                                                   
report.                                                                                                                         
                                                                                                                                
Senator Thomas  asked about  the qualifications  necessary to                                                                   
receive  the  $500 rebate.    Co-Chair  Stedman said  that  a                                                                   
person who qualifies for a PFD  would qualify for the rebate.                                                                   
A veteran could  qualify for the rebate even if  they did not                                                                   
receive a PFD.                                                                                                                  
                                                                                                                                
Co-Chair  Hoffman commented  that  this legislation  reflects                                                                   
what the Senate has already passed.                                                                                             
                                                                                                                                
At Ease:       9:48:42 AM                                                                                                     
                                                                                                                                
Reconvene:     5:42:58 PM                                                                                                     
                                                                                                                                
CSSB 4001(FIN)  was heard and  HELD in Committee  for further                                                                   
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 5:43 PM.                                                                                           
                                                                                                                                

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