Legislature(2007 - 2008)SENATE FINANCE 532

08/07/2008 04:00 PM FINANCE


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04:19:57 PM Start
04:20:39 PM HB4001
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB4001 APPROP: SUPP/CAP/OTHER RELATED TO AGIA TELECONFERENCED
Scheduled But Not Heard
+ HB4001 APPROP: SUPP/CAP/OTHER RELATED TO AGIA TELECONFERENCED
Moved SCS CSHB 4001(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
CS FOR HOUSE BILL NO. 4001(FIN)                                                                                               
                                                                                                                                
     "An  Act  making  supplemental  appropriations,  capital                                                                   
     appropriations,   and   other   appropriations;   making                                                                   
     appropriations  to capitalize  funds; and providing  for                                                                   
     an effective date."                                                                                                        
                                                                                                                                
Co-Chair  Hoffman  MOVED  to ADOPT  a  new  Senate  Committee                                                                   
Substitute   for   CSHB   4001(FIN),   labeled   25-GH3056\O,                                                                   
Bullard/Kane, 8/7/08.                                                                                                           
                                                                                                                                
Senator Dyson OBJECTED for discussion purposes.                                                                                 
                                                                                                                                
4:20:58 PM                                                                                                                    
                                                                                                                                
MILES BAKER, STAFF,  CO-CHAIR STEDMAN, explained  the new SCS                                                                   
to CSHB  4001.   He referred  to a  spreadsheet entitled  "SB                                                                   
4001/HB  4001  Compare" (copy  on  file.)   It  compares  the                                                                   
appropriation  bills:  conditions in  FY  08, the  Governor's                                                                   
bill, the House CS, the Senate  CS, and the Senate CS to CSHB                                                                   
4001.  The principal  difference in the current  Senate CS is                                                                   
in Section  1 where  the sum of  $30 million is  appropriated                                                                   
from the  general fund to  the Alaska Gasline  Inducement Act                                                                   
(AGIA) reimbursement fund.  The  previous version of the bill                                                                   
appropriated $30  million in general funds to  the Alaska Gas                                                                   
Pipeline Development Fund.                                                                                                      
                                                                                                                                
4:23:28 PM                                                                                                                    
                                                                                                                                
Senator Dyson  questioned the amount of the  appropriation in                                                                   
Section 1  and the note  of a $10  million transfer  to AGIA.                                                                   
Co-Chair  Stedman  explained  that  the note  refers  to  the                                                                   
Senate version of  the original bill.  A section  was deleted                                                                   
that  referred  to  a  separate  account  controlled  by  the                                                                   
Legislative  Budget and  Audit Committee  and dispersed  into                                                                   
the  AGIA  account.   The  appropriation  now goes  from  the                                                                   
treasury into the AGIA account.                                                                                                 
                                                                                                                                
Senator  Dyson requested  an explanation  of  all areas  that                                                                   
have been changed.                                                                                                              
                                                                                                                                
Mr. Baker explained  that in the notes, "S"  means the Senate                                                                   
version from 8-6-08.  He explained  the $10 million transfer.                                                                   
The amount  currently  proposed is $30  million, $20  million                                                                   
less than what the House passed.                                                                                                
                                                                                                                                
Senator Dyson asked  if AGIA and the new CS  are identical to                                                                   
what the  House has  agreed to.   Co-Chair  Stedman said  the                                                                   
House  version had  $50 million;  the current  CS is for  $30                                                                   
million.                                                                                                                        
                                                                                                                                
4:26:07 PM                                                                                                                    
                                                                                                                                
Senator  Dyson asked  if this  bill  needs to  return to  the                                                                   
House if it is adopted.  Co-Chair Stedman agreed it would.                                                                      
                                                                                                                                
Mr. Baker reported  that Section 2 deals with  the Power Cost                                                                   
Equalization     program     supplemental     appropriations.                                                                   
Subsection (a) has not changed.                                                                                                 
                                                                                                                                
AT-EASE:       4:26:45 PM                                                                                                     
                                                                                                                                
RECONVENE:     4:27:12 PM                                                                                                     
                                                                                                                                
Mr.  Baker continued  to  explain that  Section  2(a) is  the                                                                   
$600,000  FY  08 supplemental  for  the  PCE program.    Each                                                                   
version of  the bill has included  that amount, which  was in                                                                   
the  original  version  of  the bill  and  requested  by  the                                                                   
administration.                                                                                                                 
                                                                                                                                
Mr. Baker explained subsection  (b).  The current CS contains                                                                   
a $14 million  appropriation for the  FY 09 PCE program.   He                                                                   
referred to an  amendment that would modify that  amount.  He                                                                   
clarified that  $14 million  is the same  as in the  previous                                                                   
version  of the  bill.   Missing  in the  current version  is                                                                   
subsection (c) which dealt with PCE changes.                                                                                    
                                                                                                                                
4:29:01 PM                                                                                                                    
                                                                                                                                
Mr.   Baker   explained   that   Section   3   contains   the                                                                   
appropriation for  $1.9 million  to the Department  of Health                                                                   
and Social Services  for the hold harmless provisions  of the                                                                   
resource  rebate.   That  amount is  less  than the  previous                                                                   
version of the bill which was for $2.1 million.                                                                                 
                                                                                                                                
Mr. Baker reported that the Heating  Fuel Rebate Program does                                                                   
not exist in this version of the bill.                                                                                          
                                                                                                                                
Mr.  Baker related  that Section  4 of  the bill  is for  $60                                                                   
million  for  the Alaska  Housing  Finance  Corporation  home                                                                   
grant fund program.   That amount is $10 million  higher than                                                                   
the previous version of the bill.                                                                                               
                                                                                                                                
4:30:48 PM                                                                                                                    
                                                                                                                                
Mr. Baker explained  that Section 5(a) includes  $5.5 million                                                                   
for the  bulk fuel revolving  loan program.   Subsections (b)                                                                   
and  (c)   deal  with  the   bulk  fuel  bridge   loan  fund.                                                                   
Subsection  (d)  is  $20  million   for  the  Alaska  Village                                                                   
Electric Coop (AVEC) bulk fuel loan fund.                                                                                       
                                                                                                                                
Mr. Baker explained Section 6  and the sum of $50 million for                                                                   
the renewable energy grant fund.   Subsection (b) adds intent                                                                   
language  that   the  $50  million   is  intended  to   be  a                                                                   
supplemental appropriation.                                                                                                     
                                                                                                                                
4:33:25 PM                                                                                                                    
                                                                                                                                
Mr. Baker  turned to  Section 7, which  deals with  the Motor                                                                   
Fuel  Tax  Suspension  for $100,000  to  hold  municipalities                                                                   
harmless for aviation fuel tax losses.                                                                                          
                                                                                                                                
Mr. Baker related  that Section 8 is for $5.5  million to the                                                                   
Department   of   Natural   Resources    for   gas   pipeline                                                                   
implementation.                                                                                                                 
                                                                                                                                
Mr. Baker explained that Section  9 is the lapse language and                                                                   
Section 10  deals with  retroactivity to FY  08.   Section 11                                                                   
contains contingency  language related  to suspension  of the                                                                   
motor fuel tax and conditions that apply to the AVEC loan.                                                                      
                                                                                                                                
4:35:27 PM                                                                                                                    
                                                                                                                                
Mr.  Baker  reported  that  the  total cost  for  the  FY  09                                                                   
appropriation is estimated at  $945.8 million.  The estimated                                                                   
cost  to  the  treasury  for  the  tax  suspension  is  $36.6                                                                   
million.  The total cost of this bill is $982.5 million.                                                                        
                                                                                                                                
Senator Dyson MAINTAINED his OBJECTION.                                                                                         
                                                                                                                                
4:37:07 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  MOVED to  ADOPT Amendment  1.  He  OBJECTED                                                                   
for discussion purposes.                                                                                                        
                                                                                                                                
Co-Chair Stedman WITHDREW his motion to adopt Amendment 1.                                                                      
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
offered to comment on the amendment.                                                                                            
                                                                                                                                
Senator  Dyson  asked  for  Ms.   Rehfeld's  opinion  on  the                                                                   
amendment.  He  wondered which components of the  new CS were                                                                   
objectionable  to  the  administration.   He  voiced  concern                                                                   
about the House not concurring with items in the bill.                                                                          
                                                                                                                                
Co-Chair  Stedman   requested  Ms.   Rehfeld  to   point  out                                                                   
concerns.                                                                                                                       
                                                                                                                                
Ms.  Rehfeld said  the  administration  is pleased  with  the                                                                   
inclusion of the resource rebate  at $1,200 and the reduction                                                                   
of administration costs by including  it with the PFD.    She                                                                   
also agreed with the suspension of the motor fuel tax.                                                                          
                                                                                                                                
Ms.  Rehfeld  commented  positively   about  the  Power  Cost                                                                   
Equalization (PCE)  funding, the addition of  the home energy                                                                   
rebate program  administered by  AHFC, and the  fuel purchase                                                                   
assistance.    She summarized  that  the  administration  was                                                                   
pleased with the bill.                                                                                                          
                                                                                                                                
4:40:38 PM                                                                                                                    
                                                                                                                                
Senator  Dyson  MAINTAINED  his  OBJECTION  to  adopting  the                                                                   
Senate CS.   He requested  an explanation  of Section  5 (b),                                                                   
(c),  and (d),  which he  maintained are  different from  the                                                                   
House version of the bill.                                                                                                      
                                                                                                                                
Co-Chair Hoffman  explained that  there is support  for these                                                                   
appropriations  which were requested  by the  administration.                                                                   
Senator Dyson asked  if they were in the  Governor's original                                                                   
submittal.   Co-Chair  Hoffman said  they were  not, but  two                                                                   
were included in  the House version; the bulk  fuel revolving                                                                   
loan and the bridge fuel loan.                                                                                                  
                                                                                                                                
Co-Chair  Stedman  pointed  out  that the  bulk  fuel  bridge                                                                   
program in the House column should also say $5,300,000.                                                                         
                                                                                                                                
Senator  Dyson restated  that the dollar  amount should  have                                                                   
been included.   Co-Chair Stedman  agreed and said it  was an                                                                   
oversight.                                                                                                                      
                                                                                                                                
4:43:27 PM                                                                                                                    
                                                                                                                                
Senator Thomas  asked Ms. Rehfeld  about missing  DOT capital                                                                   
projects.   Ms. Rehfeld commented  that she was  referring to                                                                   
the  energy  components  of  the  appropriation  bill.    She                                                                   
thanked  the Committee  for including  the components  of the                                                                   
AGIA   implementation.     The   administration  would   have                                                                   
preferred  that  more  of their  requests  could  have  moved                                                                   
forward.   She  hoped  to work  on  them during  the  regular                                                                   
session.                                                                                                                        
                                                                                                                                
Senator Thomas asked  about the motor fuel tax.   Ms. Rehfeld                                                                   
responded that  there is clear  language and penalties  built                                                                   
into the bill.                                                                                                                  
                                                                                                                                
4:46:29 PM                                                                                                                    
                                                                                                                                
Senator Dyson  asked if there was  money in the bill  for the                                                                   
Alaska Natural  Gas Pipeline  Development Authority  (ANGDA).                                                                   
Co-Chair Stedman said it wasn't in the bill.                                                                                    
                                                                                                                                
Senator Dyson requested the administration's viewpoint.                                                                         
                                                                                                                                
Ms. Rehfeld thought  the committee would continue  to work on                                                                   
those components  during the regular session.   Senator Dyson                                                                   
saw it as a problem.                                                                                                            
                                                                                                                                
Senator Dyson MAINTAINED his OBJECTION to adopt the SCS.                                                                        
                                                                                                                                
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Thomas, Elton, Huggins, Olson, Hoffman, Stedman                                                                       
OPPOSED: Dyson                                                                                                                  
                                                                                                                                
The motion failed 1-6.                                                                                                          
                                                                                                                                
There being NO OBJECTION, SCS CSHB 4001 was adopted.                                                                            
                                                                                                                                
Co-Chair Hoffman MOVED to ADOPT Amendment 1:                                                                                    
                                                                                                                                
     Page 2, Lines 3-5                                                                                                          
     Delete all material                                                                                                        
                                                                                                                                
     Insert  "(b)  The  amount  necessary,  estimated  to  be                                                                   
     $23,000,000,  is appropriated from  the general  fund to                                                                   
     the Alaska  Energy Authority  for payment of  power cost                                                                   
     equalization for the fiscal year ending June 30, 2009"                                                                     
                                                                                                                                
     Page 3, Line 12                                                                                                            
     After the word "implementation"                                                                                            
     Insert "for the fiscal year ending June 30, 2009"                                                                          
                                                                                                                                
     Page 3, Line 15                                                                                                            
     Delete "and 8"                                                                                                             
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion purposes.                                                                              
                                                                                                                                
4:50:35 PM                                                                                                                    
                                                                                                                                
Mr. Baker  explained that the  amendment deletes  the current                                                                   
subsection (b) which was a $14  million FY 09 supplemental to                                                                   
the  PCE  program.   The  administration  had  asked  for  $9                                                                   
million.   Legislative Finance  determined that was  about $5                                                                   
million shy,  assuming no  programmatic changes were  needed.                                                                   
The amendment  would insert a  new subsection  containing $23                                                                   
million  to account  for raising  the  PCE ceiling  $1.   The                                                                   
language "the amount necessary,  estimated to be" makes it an                                                                   
open-ended appropriation.                                                                                                       
                                                                                                                                
Mr. Baker  explained that  the second  part of the  amendment                                                                   
addresses  page 3,  line 12,  which is  an appropriation  for                                                                   
$5.5 million  to the Department  of Natural Resources.   That                                                                   
is  more  appropriately  an  operating  budget  item,  not  a                                                                   
capital grant,  as it appears  in the current version  of the                                                                   
bill.  The words  "for the fiscal year ending  June 30, 2009"                                                                   
correct that problem.                                                                                                           
                                                                                                                                
Also, page  3, line 15,  removes subsection 8,  which ensures                                                                   
that the  appropriation is  an operating  budget item,  not a                                                                   
capital budget item.                                                                                                            
                                                                                                                                
4:52:42 PM                                                                                                                    
                                                                                                                                
Senator Elton suggested on page  3, line 15, the wording "the                                                                   
appropriation made  in Section 4  of this act is  for capital                                                                   
projects and lapses under AS 37.25.020".                                                                                        
                                                                                                                                
Mr. Baker pointed out that the final part of the amendment                                                                      
should say "Delete and 8".                                                                                                      
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION to adopt Amendment                                                                      
1.  There being NO further OBJECTION, it was so ordered.                                                                        
                                                                                                                                
AT-EASE:       4:54:21 PM                                                                                                     
                                                                                                                                
RECONVENE:     4:54:53 PM                                                                                                     
                                                                                                                                
Co-Chair Stedman asked if there were any other comments.                                                                        
                                                                                                                                
Senator Thomas questioned the exclusion of the DOT projects                                                                     
and the ANGDA money.                                                                                                            
                                                                                                                                
Co-Chair Hoffman pointed out that there would be                                                                                
opportunities to make amendments on the floor.                                                                                  
                                                                                                                                
4:56:00 PM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman MOVED to REPORT SCS CSHB 4001 out of                                                                           
Committee with individual recommendations.                                                                                      
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion purposes.                                                                              
                                                                                                                                
Senator Dyson OBJECTED to moving the bill out of committee.                                                                     
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:  Thomas, Elton, Huggins, Olson, Hoffman, Stedman                                                                      
OPPOSED:  Dyson                                                                                                                 
                                                                                                                                
The motion failed 1-6.                                                                                                          
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
SCS CSHB 4001(FIN) was REPORTED out of Committee with a                                                                         
recommendation "to amend".                                                                                                      
                                                                                                                                

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