Legislature(2009 - 2010)BUTROVICH 205

02/18/2010 03:30 PM RESOURCES


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03:35:26 PM Start
03:36:12 PM SB220
04:37:40 PM Adjourn
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= SB 220 ENERGY EFFICIENCY/ ALTERNATIVE ENERGY TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    SB 220-ENERGY EFFICIENCY/ ALTERNATIVE ENERGY                                                            
                                                                                                                                
3:36:12 PM                                                                                                                    
CO-CHAIR         WIELECHOWSKI           announced         SB      220      to     be      up     for                            
consideration          [CSSB     220(RES),        labeled       26-LS1197\K,         was    before                              
the    committee].        He   asked    Mr.    Pawlowski       to   walk    them    through      the                            
first amendment.                                                                                                                
                                                                                                                                
MIKE     PAWLOWSKI,        aide     to    Senator       McGuire,       explained        Amendment                               
K.2, labeled 26-LS1197\K.2.                                                                                                     
                                                                                                                                
                                    AMENDMENT K.2                                                                           
                                                                                                                              
               OFFERED IN THE SENATE, SENATE BY SENATORS WIELECHOWSKI                                                           
        AND MCGUIRE TO: CSSB 220(RES), DRAFT VERSION "K"                                                                        
        Page 1, line 3:                                                                                                         
                Delete the first occurrence of "and"                                                                          
                                                                                                                                
        Page     1,   line     5,    following       the     second      occurrence        of                                   
        "fund":                                                                                                               
                Insert "establishing an Alaska energy efficiency                                                              
        revolving       loan     fund;     and    authorizing        and    relating       to                                 
        the    issuance       of   bonds     by    the    Alaska      Housing      Finance                                    
        Corporation"                                                                                                          
                                                                                                                                
        Page 3, line 18:                                                                                                        
                Delete "sec. 15"                                                                                                
                Insert "secs. 6, 17, and 29"                                                                                    
                                                                                                                                
        Page 3, following line 20:                                                                                              
                Insert a new bill section to read:                                                                              
           "* Sec. 4. AS 14.08.101 is amended to read:                                                                      
                Sec. 14.08.101. Powers. A regional school board                                                               
        may                                                                                                                     
                       (1)  sue and be sued;                                                                                    
                       (2)  contract with the department, the                                                                   
        Bureau       of     Indian       Affairs,        or     any      other      school                                      
        district,       agency,      or   regional      board     for    the    provision                                       
        of services, facilities, supplies, or utilities;                                                                        
                       (3)  determine its own fiscal procedures,                                                                
        including       but    not    limited      to    policies      and    procedures                                        
        for     the     purchase        of    supplies        and     equipment;         the                                    
        regional        school       boards       are     exempt       from      AS   37.05                                     
        (Fiscal         Procedures           Act)        and       AS  36.30        (State                                      
        Procurement Code);                                                                                                      
                       (4)  appoint, compensate, and otherwise                                                                  
        control      all    school      employees       in   accordance        with     this                                    
        title;      these     employees        are     not    subject       to   AS   39.25                                     
        (State Personnel Act);                                                                                                  
                       (5)               adopt          regulations             governing                                       
        organization,            policies,         and      procedures          for      the                                    
        operation of the schools;                                                                                               
                       (6)              establish,           maintain,           operate,                                       
        discontinue,          and      combine       schools        subject       to     the                                    
        approval of the commissioner;                                                                                           
                       (7)  recommend to the department projects                                                                
        for    construction,          rehabilitation,           and    improvement         of                                   
        schools      and    education-related            facilities       as    specified                                       
        in    AS  14.11.011(b),          and    plan,      design,      and     construct                                       
        the   project      when     the   responsibility          for    it   is   assumed                                      
        under AS 14.11.020;                                                                                                     
                       (8)  by resolution adopted by a majority of                                                              
        all    the     members      of    the     board     and     provided       to    the                                    
        commissioner         of    the    department,         assume      ownership        of                                   
        all   land    and    buildings      used    in   relation       to  the    schools                                      
        in     the     regional        educational          attendance         area,       as                                   
        provided for in AS 14.08.151(b);                                                                                        
                       (9)  provide housing for rental to teachers,                                                             
        by   leasing       existing       housing      from     a   local      agency      or                                   
        individual,        by    entering      into     contractual        arrangements                                         
        with     a   local     agency      or    individual        to    lease     housing                                      
        that     will      be    constructed         by    the     local      agency       or                                   
        individual       for    that    purpose,      or,   without      using     for   the                                    
        purpose      that     portion       of    public      school      funding       that                                    
        consists       of    state      aid     provided       under      AS  14.17,       by                                   
        constructing         or    otherwise        acquiring       housing       that     is                                   
        owned       and      managed        by     the      regional         educational                                        
        attendance area for rental to teachers;                                                                                 
                       (10)  employ a chief school administrator;                                                               
                       (11)  apply for and use the proceeds of a                                                            
        loan    from    the    Alaska     energy      efficiency       revolving        loan                                
        fund (AS 18.56.855);                                                                                                
                       (12)  exercise those other functions that                                                            
        may    be    necessary       for     the    proper      performance        of    its                                    
        responsibilities."                                                                                                      
                                                                                                                                
        Renumber the following bill sections accordingly.                                                                       
                                                                                                                                
        Page 3, following line 25:                                                                                              
                Insert a new bill section to read:                                                                              
           "* Sec. 6. AS 18.56 is amended by adding a new section to read:                                                  
                                                                                                                                
                Sec. 18.56.855. Alaska energy efficiency revolving loan fund. (a) The                                         
                                                                                                                                
        Alaska  energy  efficiency revolving  loan fund  is established in the corporation  to                                  
                                                                                                                                
        carry out the purposes  of this section. The revolving  loan fund  consists of money                                    
                                                                                                                                
        or assets appropriated   or transferred  to the corporation   for the revolving  loan                                   
                                                                                                                                
        fund, including  money    and assets  deposited  in the revolving  loan  fund  by  the                                  
                                                                                                                                
        corporation  and  earnings  on  investments  of  money   held  in the revolving  loan                                   
                                                                                                                                
        fund.  The   corporation   may   establish  separate   accounts   in the  fund.   The                                   
                                                                                                                                
        corporation  shall establish the interest rates, security provisions, and other terms                                   
                                                                                                                                
        of a loan made   under this section taking into consideration  the corporation's  cost                                  
                                                                                                                                
        of funds and other factors the corporation considers appropriate.                                                       
                (b)  Money and other assets of the Alaska energy efficiency revolving loan                                      
                                                                                                                                
        fund may be used to                                                                                                     
                                                                                                                                
                       (1)  make loans to regional educational attendance areas or to                                           
                                                                                                                                
        municipal  governments,   including  subdivisions  of municipal   governments,   or to                                  
                                                                                                                                
        the state for the purpose of financing energy  efficiency improvements   to buildings                                   
                                                                                                                                
        owned  by  regional educational  attendance  areas, by the state, or by municipalities                                  
                                                                                                                                
        in the state;                                                                                                           
                                                                                                                                
                       (2)  secure bonds issued by the corporation to finance the loans                                         
                                                                                                                                
        described in (1) of this subsection;                                                                                    
                                                                                                                                
                       (3)  pay costs of administering the revolving loan fund; and                                             
                                                                                                                                
                       (4)  pay the costs of administering and enforcing the terms of loans                                     
                                                                                                                                
        made by the corporation from the revolving loan fund.                                                                   
                                                                                                                                
                (c)  Before a regional educational attendance area, a municipal                                                 
                                                                                                                                
        government,   or a  subdivision  of a  municipal  government,   may   borrow   money                                    
                                                                                                                                
        from  the corporation  under  this section, the regional educational attendance  area                                   
                                                                                                                                
        or the municipal  government   shall waive  any sovereign  immunity   defense  it may                                   
                                                                                                                                
        have  available  to it with  respect to enforcement    of the  terms  of the  loan. A                                   
                                                                                                                                
        regional  educational  attendance   area  or a  municipal   government    may   waive                                   
                                                                                                                                
        sovereign  immunity   to comply  with  the requirement  of this subsection. The  state                                  
                                                                                                                                
        waives  any  sovereign  immunity   defense  against  enforcement   of the  terms of  a                                  
                                                                                                                                
        loan made   to the state under this section. A person or corporation  having  a claim                                   
                                                                                                                                
        under  this section  shall bring  an  action  in a  state court  in Alaska   that has                                   
                                                                                                                                
        jurisdiction over the claim.                                                                                            
                                                                                                                                
                (d)  All regional educational attendance areas and municipal governments                                        
                                                                                                                                
        in the state are authorized to borrow  from  the corporation  under this section. The                                   
                                                                                                                                
        corporation  shall set out the terms of a loan to a regional  educational  attendance                                   
                                                                                                                                
        area in a loan agreement  or similar document.  At  the discretion of the corporation,                                  
                                                                                                                                
        a borrowing  by  a regional educational attendance  area or a municipal  government                                     
                                                                                                                                
        under this section may  be effected by use  of a loan agreement  or similar document                                    
                                                                                                                                
        evidencing  and  setting out the terms of the loan  or by issuance  of a bond  by  the                                  
                                                                                                                                
        municipal  government    to the  corporation.  Notwithstanding   a  charter provision                                   
        requiring public  sale by a regional educational  attendance  area  or a municipality                                   
                                                                                                                                
        of its municipal  bonds  or other  indebtedness,  a regional  educational  attendance                                   
                                                                                                                                
        area or municipality  may  sell its bonds under  this section to the corporation  at a                                  
                                                                                                                                
        negotiated, private sale. At  the discretion of the corporation,  the bonds  or other                                   
                                                                                                                                
        indebtedness  of the municipality  may   be general  obligations of  the municipality                                   
                                                                                                                                
        or may  be secured  by an identified revenue  source  or by a combination  of the full                                  
                                                                                                                                
        faith and credit of the municipality and an identified revenue source.                                                  
                                                                                                                                
                (e)  Notwithstanding any other provision of law, to the extent that a                                           
                                                                                                                                
        department  or agency  of the state is the custodian of money   payable  to a regional                                  
                                                                                                                                
        educational attendance  area or to a municipality, at any time after written notice to                                  
                                                                                                                                
        the department  or agency  head  from  the corporation  that the regional educational                                   
                                                                                                                                
        attendance  area or  municipality  is in default on  the payment   of principal of  or                                  
                                                                                                                                
        interest on municipal   bonds  or  other indebtedness   then  held or  owned   by  the                                  
                                                                                                                                
        corporation, or  amounts  due  under  an agreement   between   the corporation  and  a                                  
                                                                                                                                
        regional educational  attendance  area or a municipality,  the department  or agency                                    
                                                                                                                                
        shall withhold   the  payment    of  that money    from   that  regional  educational                                   
                                                                                                                                
        attendance  area or municipality and  pay over  the money  to the corporation  for the                                  
                                                                                                                                
        purpose  of paying  the principal of and interest on the bonds  or indebtedness.  The                                   
                                                                                                                                
        notice must  be  given in each  instance  of default. If a notice is given under  this                                  
                                                                                                                                
        subsection  and  under   AS  44.85.170   and  the default  is continuing   under  this                                  
                                                                                                                                
        subsection   and  under   AS  44.85.170,  the  department    or  agency   shall make                                    
                                                                                                                                
        payment   to the corporation and  to the Alaska Municipal   Bond  Bank  Authority  on                                   
                                                                                                                                
        a pro rata basis, taking into consideration  the principal amount   of the respective                                   
                                                                                                                                
        default amounts.                                                                                                        
                                                                                                                                
                (f)  An authorized state officer may borrow from the corporation under                                          
                                                                                                                                
        this section for buildings  owned   by  the state. The superintendent   of a regional                                   
                                                                                                                                
        educational   attendance   area,  at  the  direction  of  the  regional   educational                                   
                                                                                                                                
        attendance  area school board, may   borrow  from  the corporation under  this section                                  
                                                                                                                                
        for buildings owned by the regional educational attendance area.                                                        
                                                                                                                                
                (g)  In addition to other security that may be given with respect to a loan                                     
                                                                                                                                
        made   under  this section, the  corporation  may   require  a deed  of  trust on  the                                  
        building  that is the subject of the energy  efficiency  loan and  the real estate on                                   
                                                                                                                                
        which   the building   is located. A   regional  educational  attendance   area  or  a                                  
                                                                                                                                
        municipality  may   grant  a deed  of  trust to the corporation   as needed   for this                                  
                                                                                                                                
        purpose.  An  authorized  state officer may grant  a deed of trust to the corporation                                   
                                                                                                                                
        as needed for this purpose.                                                                                             
                                                                                                                                
                (h)  The corporation shall administer the Alaska energy efficiency                                              
                                                                                                                                
   revolving loan fund in accordance with regulations adopted by the corporation.                                               
                                                                                                                                
      The corporation may adopt regulations under AS 18.56.088 to carry out the                                                 
                                                                                                                                
        purposes of this section.                                                                                               
                                                                                                                                
                (i)  This section applies to home rule municipalities.                                                          
                                                                                                                                
                (j)  In this section, "authorized state officer" means                                                          
                                                                                                                                
                       (1)  the commissioner of the department of the state for a building                                      
                                                                                                                                
        owned by the state;                                                                                                     
                                                                                                                                
                       (2)  the executive director of a public corporation for a building                                       
                                                                                                                                
        owned by the public corporation;                                                                                        
                                                                                                                                
                       (3)  the legislative council for a building owned by the legislature;                                    
                                                                                                                                
                       (4)  the administrative director of courts for a building owned by                                       
                                                                                                                                
        the judicial system;                                                                                                    
                                                                                                                                
                       (5)  any other person designated in writing by a person listed in (1)                                    
                                                                                                                                
        - (4) of this subsection."                                                                                              
                                                                                                                                
                                                                                                                                
        Renumber the following bill sections accordingly.                                                                       
                                                                                                                                
        Page 13, line 20:                                                                                                       
                Delete     "sec.    15"                                                                                         
                Insert     "sec.    17"                                                                                         
                                                                                                                                
        Page 13, line 21:                                                                                                       
                Delete     "sec.    11"                                                                                         
                Insert     "sec.    13"                                                                                         
                                                                                                                                
        Page 13, lines 21 - 22:                                                                                                 
                Delete     "sec.    12"                                                                                         
                Insert     "sec.    14"                                                                                         
                                                                                                                                
        Page 13, line 27:                                                                                                       
                Delete     "sec.    13"                                                                                         
                Insert "sec. 15"                                                                                                
                                                                                                                                
        Page 14, following line 10:                                                                                             
                Insert new bill sections to read:                                                                               
             "*   Sec.     29.    The     uncodified        law    of    the    State      of                               
        Alaska is amended by adding a new section to read:                                                                      
                BOND AUTHORIZATION AND PROVISIONS. (a) In addition to the                                                       
                                                                                                                                
        powers   in AS  18.56.090,  the  Alaska  Housing   Finance   Corporation   may   issue                                  
                                                                                                                                
        bonds  in an amount   not to exceed  $250,000,000    to make  loans  from  the energy                                   
                                                                                                                                
        efficiency revolving  loan fund  established by  AS  18.56.855,  enacted by  sec. 6 of                                  
                                                                                                                                
        this Act, and to finance the  purposes  permitted by  AS  18.56.855,  enacted by  sec.                                  
                                                                                                                                
        6 of this Act. AS  18.56.110  - 18.56.190  and  18.56.855,  enacted  by sec. 6 of this                                  
                                                                                                                                
        Act, apply  to bonds issued  under this section, except that bonds  issued under  this                                  
                                                                                                                                
        section are  not subject  to, and may   not be  counted  against, the  bond  issuance                                   
                                                                                                                                
        limitation set out in AS 18.56.110(g).                                                                                  
                                                                                                                                
                (b)  The Alaska Housing Finance Corporation shall deposit the proceeds                                          
                                                                                                                                
        of bonds  issued under (a) of this section in the Alaska energy  efficiency revolving                                   
                                                                                                                                
        loan fund in accordance with AS 18.56.855, enacted by sec. 6 of this Act.                                               
                                                                                                                                
           * Sec. 30. The  uncodified  law of the  State of Alaska  is amended   by  adding  a                                
                                                                                                                                
        new section to read:                                                                                                    
                                                                                                                                
                REVISOR'S INSTRUCTION. The revisor of statutes is instructed to                                                 
                                                                                                                                
        change  the heading  of art. 6 of AS  18.56  from "Article  6. Energy  Conservation"                                    
                                                                                                                                
        to "Article 6. Energy Efficiency and Conservation Programs.""                                                           
                                                                                                                                
                                                                                                                                
MR.     PAWLOWSKI        explained        that      this     amendment        establishes          an                           
energy     efficiency        revolving       loan    fund    within      the   Alaska      Housing                              
Finance       Corporation          (AHFC).       He     said     the     amendment         largely                              
reflects       SB   223    with    a   few    changes      and    a   copy    of    the    sponsor                              
statement        should      be    in    their      packets.       He    said     it    would      be                           
helpful      to    have    Brian     Butcher      with     the    Alaska     Housing       Finance                              
Corporation explain the program.                                                                                                
                                                                                                                                
3:37:32 PM                                                                                                                    
BRIAN     BUTCHER,      Director,       Public      Affairs,      Alaska      Housing      Finance                              
Corporation         (AHFC),      Juneau,      AK,    said     this    amendment        takes     $18                            
million       of   the     $28    million       that     came     from    the     State     Energy                              
Program      federal     stimulus       bill    (that    the    Legislature        overrode      the                            
veto    on   in   the    summer)      to   leverage      up    to   $250    million      in   bonds                             
to   establish       an    energy     efficiency        revolving       loan    fund     in   AHFC.                             
He    explained        that      all     public      facilities         -    both     state      and                            
municipal,        and    schools      would     be    eligible       participants         for    the                            
revolving loan fund.                                                                                                            
                                                                                                                                
He   said    the   way    it  would     work    is   for   instance,       a  school     wants     to                           
participate.         It   would     hire    an   energy     performance        contractor        and                            
he   would     look    at   the   energy      efficiency       needs     of   that    school     and                            
estimate        what     it    would      cost      to    bring      it    up    to     a   higher                              
efficiency       level     -  say,    $200,000.       The    contractor       would     guarantee                               
a  certain      savings      -  say,     saving     30   percent      of   energy     costs.     The                            
savings      after     spending       the    $200,000       would     be    used    to    pay    the                            
loan off.                                                                                                                       
                                                                                                                                
MR.   BUTCHER      said    this    had    been    done    in   a  lot    of   states;     in   fact                             
DOTPF     had     already      done     it    on   a   handful       of    buildings       in    the                            
state.      He    explained        if    the    school       does     not    get     the    energy                              
efficient       savings      promised      in   the   contract,       the   contractor        would                             
pay   what    it   was    short.     Setting     up   the   program      in   this    way   allows                              
everyone to take advantage of it - it's just a matter of time.                                                                  
                                                                                                                                
3:40:05 PM                                                                                                                    
He   said    the    U.S.    Department        of   Energy      (USDOE)      was   pleased      with                             
this approach and signed off on the plan three weeks ago.                                                                       
                                                                                                                                
MR.    PAWLOWSKI       added     that    some     consternation         was    heard     when    the                            
original       committee       substitute        (CS),     version       K,   came     out    about                             
the    deletion      of   the    energy      efficiency       grant     fund.     That    fund     is                           
dependent        on    a   one-time       appropriation          and     this     amendment        is                           
intended      largely      to   replace      that   program.       This    amendment       does    it                           
through a revolving loan fund as opposed to a purely grant fund.                                                                
                                                                                                                                
SENATOR      WAGONER      asked     how    many    years     it   would     take    to   complete                               
the work.                                                                                                                       
                                                                                                                                
MR.    BUTHCER      replied      that    he   doesn't      have    an    estimate.       Parts     of                           
the     bill     discuss      trying       to   put     together       an    index      of    state                             
buildings       in   terms     of   which    ones    need    the    most    work.     He   thought                              
the    state      departments        might      put    together       an   idea     of    what     it                           
might be on the state level.                                                                                                    
                                                                                                                                
3:41:55 PM                                                                                                                    
CO-CHAIR      WIELECHOWSKI         asked    if   the    $300    million     that    has    already                              
been     appropriated          for     weatherization           and     the     energy      rebate                              
created any jobs in Alaska.                                                                                                     
                                                                                                                                
MR.     BUTHCER       replied       that     he     had    heard      it     had    created        an                           
estimated 2,000 jobs.                                                                                                           
                                                                                                                                
CO-CHAIR      WIELECHOWSKI         asked     if   he   had    similar      projections        about                             
the number of jobs this bonding would create.                                                                                   
                                                                                                                                
MR.    BUTCHER      said    yes;    they     expect     it    to   create     a   lot    of   jobs.                             
Based     on   DOTPF's      testimony,        the   state     has    three     or   four    energy                              
performance         contractors,         but    their     expertise       is    just    going      in                           
and    doing     the   energy      efficiency       audit     and    trying     to    figure     out                            
the   numbers.       Almost     all   of   the   actual     work    done    to   the    buildings                               
is   subcontracted         to   contractors        in   local     communities        -   a  lot    of                           
work for small and mid-sized contractors.                                                                                       
                                                                                                                                
SENATOR      WAGONER      asked     what     the    likelihood       is    of   the    number      of                           
energy performance contractors growing.                                                                                         
                                                                                                                                
MR.     BUTCHER       answered       that     it    is    good,      especially         with     the                            
passage        of    this      bill.       The     reason       the     number       of     energy                              
contractors         is   so    small     is    that     the    private      sector      had    been                             
doing only some energy performance contracting with DOTPF.                                                                      
                                                                                                                                
SENATOR      WAGONER      asked    how    an   engineer       would    become      certified       to                           
be an energy performance contractor.                                                                                            
                                                                                                                                
MR.    BUTCHER      replied      that    he   didn't      know    specifically         what    that                             
would     be,    but    AHFC     has    been    in   charge      of   training       the    energy                              
raters     as    well    as   the    weatherization          auditors      so   far.     They    are                            
currently        updating       software        that     energy      raters       use    on    both                             
residential        and    commercial        buildings       and   public      facilities.        So,                            
they      should      have      the     necessary        software        soon      to    do    that                             
training.                                                                                                                       
                                                                                                                                
3:45:48 PM                                                                                                                    
MR.    PAWLOWSKI       said     it   is   important       to    notice     the    guarantee        by                           
the    performance         contractor        of   the    savings,       which     then     becomes                              
financeable.                                                                                                                    
                                                                                                                                
SENATOR      WAGONER       said    he    understood        that,     but    he   wanted      it    on                           
record     that    if   they    are    going    to   go   through      with    the    bond,    they                             
better have the people trained to use it.                                                                                       
                                                                                                                                
MR.    BUTHCER     added     that    he   didn't     anticipate        doing     a  large     $250-                             
million      bonding,      but    doing    it   in   stages      as   people     are    available                               
to    do   the     work.     They     would     ramp     up    as   more     businesses        were                             
prepared to do it.                                                                                                              
                                                                                                                                
3:46:52 PM                                                                                                                    
MR.    PAWLOWSKI        highlighted        a   few    points      in    the    amendment;        the                            
first     on   page    1,   lines     9-11,     that    points     to   page    3,   line     18   in                           
the     CS,     the    purpose        section       in    uncodified         law.     Since      new                            
sections       are   being     added     that     deal    with    energy      efficiency       they                             
had to add in references to the purpose section on page 3.                                                                      
                                                                                                                                
Section      4  (page     2,   lines     25-26,      of   the   amendment)        was    added    on                            
page     1,    lines     15.     This     language       empowers       regional        education                               
attendance        areas     (REAA)      to   apply     for    these     loans.      Since     their                             
powers     are    granted      by   statute,       they    had    to   actually       modify     the                            
powers     of   a  school     board     within     an   REAA    to  allow     them    to   borrow.                              
This    was    modeled      on   the    teacher      housing      program      authority       that                             
was    granted       through       the    AHFC     program       earlier.       Including        the                            
REAAs is the fundamental change in this amendment.                                                                              
                                                                                                                                
CO-CHAIR      WIELECHOWSKI         said    this     bill    was   originally        proposed       by                           
the    Governor      and   he   said    he   would     support      it   if   it   was   included                               
in   the   Omnibus      Energy     Bill.    He   said    he   thought      it  was    an   amazing                              
chance     for    them    to   take    a  small     amount     of   money     and   leverage       it                           
into something that could make a difference all across Alaska.                                                                  
                                                                                                                                
Finding      no   further      questions       on    proposed      Amendment       K.2,     he   set                            
it aside.                                                                                                                       
                                                                                                                                
3:49:10 PM                                                                                                                    
CO-CHAIR       WIELECHOWSKI        announced       that     Amendment       K.1   [labeled       26-                            
LS1197\K.1]         was    up    for    consideration          and    asked      Mr.    Livey      to                           
explain it.                                                                                                                     
                                                                            26-LS1197\K.1                                       
                                                                           Chenoweth/Kane                                       
                                    AMENDMENT K.1                                                                           
                                                                                                                                
                   OFFERED IN THE SENATE TO:  CSSB 220(RES), Draft                                                              
        Version "K"                                                                                                             
                                                                                                                                
        Page 1, line 3, following "cooperative,":                                                                             
                Insert        "to      the      Alaska         affordable          heating                                    
        program,"                                                                                                             
                                                                                                                                
        Page 13, following line 18:                                                                                             
        Insert new bill sections to read:                                                                                       
           "* Sec. 21. AS 47.25.621 is amended to read:                                                                     
                Sec.       47.25.621.           Alaska        affordable           heating                                  
        [ASSISTANCE]           program.        (a)      The      Alaska       affordable                                  
        heating       [ASSISTANCE]         program       is    established         in    the                                    
        Department        of   Health      and    Social      Services       to    provide                                      
        expanded       eligibility         for     Alaska      residents        for     home                                    
        heating      assistance,        to   the    extent     funds     are    available                                   
        in   the   Alaska     affordable        heating      fund    [APPROPRIATED         BY                               
        THE LEGISLATURE FOR THAT PURPOSE].                                                                                      
                (b)  The Alaska affordable heating [ASSISTANCE]                                                             
        program      established        under     this    section      is   in   addition                                       
        to     the      federal         low-income          heating        and      energy                                      
        assistance       provided       under     42   U.S.C.     8621    -   8629    (Low-                                     
        Income       Home      Energy       Assistance         Act     of     1981),       as                                   
        amended, and implementing regulations.                                                                                  
             *  Sec.    22.    AS  47.25.621       is   amended      by   adding      a  new                                  
        subsection to read:                                                                                                     
                (c)  The Alaska affordable heating fund is                                                                      
        established        as    a  separate       fund     to   be    managed      by   the                                    
        Department          of      Revenue.         The       fund      consists          of                                   
        appropriations         made    to   it.    Interest      earned     by   the    fund                                    
        may    be   appropriated         to    it.    The    Department        of   Health                                      
        and    Social     Services       shall     use    money     in    the    fund    for                                    
        Alaska affordable heating payments.                                                                                     
           * Sec. 23. AS 47.25.622 is amended to read:                                                                        
                Sec. 47.25.622. Duties. The Department of Health                                                          
        and Social Services [DEPARTMENT] shall                                                                              
                       (1)  administer the Alaska affordable                                                                
        heating          [ASSISTANCE]             program          provided           under                                     
        AS 47.25.621;                                                                                                           
                       (2)  adopt regulations under AS 44.62                                                                    
        (Administrative            Procedure         Act)      to    carry       out     the                                    
        purpose of the program;                                                                                                 
                       (3)  coordinate payments among other heating                                                             
        assistance programs to avoid duplication of payments.                                                                   
           * Sec. 24. AS 47.25.623 is amended to read:                                                                        
                Sec. 47.25.623. Eligibility; payment amount. An                                                             
        individual        is    eligible        for    home     heating       assistance                                        
        payments         under        the       Alaska        affordable           heating                                  
        [ASSISTANCE] program if the individual                                                                                  
                       (1)  is a resident of the state;                                                                         
                       (2)  is physically present and resides in a                                                              
        home     in   the     state     when     the    home     heating       costs     are                                    
        incurred;                                                                                                               
                       (3)  for assistance calculated under (b) and                                                         
        (c)   of   this    section,      has    gross    household       income     not    to                               
        exceed,       as     a    percentage         of     the     federal        poverty                                  
        guideline         for     Alaska       set      by     the     United       States                                  
        Department        of   Health      and    Human      Services       and    revised                                  
        under 42 U.S.C. 9902(2),                                                                                            
                       (A)  225 percent for a determination to be                                                           
        made under (c)(1) - (3) of this section; and                                                                        
                       (B)  250 percent for a determination to be                                                           
        made     under     (c)(4)      of    this     section;        and    [HAS     GROSS                                 
        HOUSEHOLD       INCOME      ABOVE     150   PERCENT      BUT    THAT     DOES    NOT                                    
        EXCEED      225    PERCENT      OF    THE    FEDERAL      POVERTY       GUIDELINE                                       
        FOR    ALASKA      SET     BY    THE    UNITED      STATES      DEPARTMENT         OF                                   
        HEALTH     AND    HUMAN     SERVICES      AND    REVISED      UNDER    42   U.S.C.                                      
        9902(2);]                                                                                                               
                       (4)  meets other eligibility requirements                                                                
        specified in regulations adopted under AS 47.25.622.                                                                    
             *  Sec.     25.    AS   47.25.623       is    amended      by   adding      new                                  
        subsections to read:                                                                                                    
                (b)  The Department of Health and Social Services                                                               
        shall     (1)     determine        the    number      of    points      for     each                                    
        eligible       individual        based     on    the    point     formula       used                                    
        under     42   U.S.C.      8621     -   8629    (Low-Income         Home    Energy                                      
        Assistance       Act    of   1981),      as   amended,      and    implementing                                         
        regulations;         and     (2)    add    to    the     determination          made                                    
        under      (1)     of     this      subsection         one     point      if     the                                    
        individual       has    applied     during     the    year    for   home    energy                                      
        conservation         and    weatherization           assistance        under     any                                    
        program       of    the     Alaska      Housing        Finance       Corporation                                        
        developed        to    implement        AS  18.56.850;         the    department                                        
        may    add    the    point     authorized        by    this    paragraph        only                                    
        once    and    may    not    add    the    point     if   an   individual        has                                    
        received        a    benefit       under      a    program       developed         to                                   
        implement       AS   18.56.850        before      the    effective        date     of                                   
        this     section.       The     amount      of    the     Alaska      affordable                                        
        heating       payment       for    an    individual         equals      the     base                                    
        amount     calculated        under     (c)   of   this    section      minus     the                                    
        amount     the   individual        is   eligible      to   receive      under    the                                    
        federal       low-income         home      energy       assistance         program                                      
        under      42     U.S.C.       8621      -     8629,      as     amended,        and                                    
        implementing regulations.                                                                                               
                (c)  The Department of Health and Social Services                                                               
        shall      calculate         the      base      amount       of     the     Alaska                                      
        affordable       heating      payment      for   the    individual       based     on                                   
        points     determined       under     (b)   of   this    section      and   on   the                                    
        average      price    a  barrel     of   Alaska     North     Slope     crude    oil                                    
        for     sale     on    the     United       States      West     Coast      during                                      
        September        through       February       of    the    preceding        fiscal                                      
        year as follows:                                                                                                        
                       (1)  $130 a point when the average price is                                                              
        not more than $75 a barrel;                                                                                             
                       (2)  $140 a point when the average price is                                                              
        more than $75 and not more than $100 a barrel;                                                                          
                       (3)  $150 a point when the average price is                                                              
        more than $100 and not more than $150 a barrel;                                                                         
                       (4)  $165 a point when the average price is                                                              
        more than $150 a barrel.                                                                                                
                (d)  Under the program authorized by AS 47.25.621                                                               
        -  47.25.626,        if   insufficient         money     is   appropriated         to                                   
        fully      fund     the     Alaska      affordable         heating       payments                                       
        during      the    first     year     taking      into    consideration          the                                    
        gross     household        income      rates      established         in   (a)     of                                   
        this     section      and    the     base    amounts       to    be   calculated                                        
        under (b) and (c) of this section, the department                                                                       
                       (1)  shall, for the duration of that fiscal                                                              
        year,     suspend      calculation        and    payment      under     (a)(3)(B)                                       
        of   this     section       and    calculate        and    pay    all    eligible                                       
        individuals under (a)(3)(A) of this section; and                                                                        
                       (2)  may, to the extent there is or may be                                                               
        an     appropriation           balance        surplus        to     the     amount                                      
        required       to     make     all     payments        under     (1)     of     this                                    
        subsection,         by     regulation,          establish        at    any      time                                    
        during       the      fiscal       year      a    prospective          pro      rata                                    
        reduction        of   the     payment      rates      that     the    department                                        
        will     pay    to    eligible       individuals         under      the    program                                      
        during     that    fiscal      year    qualifying        under     (a)(3)(B)       of                                   
        this    section      and,    thereafter,        may   provide      for   prorated                                       
        payments.                                                                                                               
           * Sec. 26. AS 47.25.626(a) is amended to read:                                                                     
                (a)  The Department of Health and Social Services                                                           
        [DEPARTMENT]         may     develop       a   regional        Alaska      heating                                      
        [ASSISTANCE]           program        for      the      administration             of                                   
        AS   47.25.621        -    47.25.626        to     provide       home      heating                                      
        assistance       in   a  uniform      and    cost-effective         manner     in   a                                   
        region     of   this    state     if   an   Alaska      Native     organization                                         
        is   authorized       to   implement       a  federally       approved      tribal                                      
        family     assistance        plan     that    includes       that     region     and                                    
        has   been     awarded      a  tribal     energy      assistance       grant     for                                    
        a   program      that     includes      that     region      under     42   U.S.C.                                      
        8623(d).                                                                                                                
           * Sec. 27. AS 47.25.626(b) is amended to read:                                                                     
                (b)  The department may award contracts to                                                                      
        implement        a    program       developed         under      (a)     of     this                                    
        section.       A   contract       authorized        for    delivery       of    home                                    
        heating       assistance        under      a   regional        Alaska      heating                                      
        [ASSISTANCE]        program      under     this    section      is  exempt      from                                    
        the    competitive         bid    requirements          of   AS   36.30     (State                                      
        Procurement          Code).        Subject        to      appropriation,            a                                   
        contract      under     this    section      must    be   in   an   amount      that                                    
        represents        a   fair     and    equitable        share     of    the    money                                     
        appropriated           for      the      Alaska        affordable          heating                                  
        [ASSISTANCE]        program      under     AS   47.25.621      -   47.25.626       to                                   
        serve     the    state      residents       specified        in    (a)    of    this                                    
        section.      The    authority       provided       under    this     section      to                                   
        contract      is    in   addition       to   the    authority       to   contract                                       
        in AS 47.05.015 or other law.                                                                                           
           * Sec. 28. AS 47.25.626(f) is amended to read:                                                                     
                (f)  If the department establishes a regional                                                                   
        Alaska       heating       [ASSISTANCE]          program       and     awards       a                                   
        contract      to   provide      home    heating      assistance       under     this                                    
        section,      a  person      applying      for   home    heating      assistance                                        
        under     AS   47.25.621       -   47.25.626       in    the    region      of   the                                    
        state       covered        by      the      regional         Alaska        heating                                      
        [ASSISTANCE]            program         may      obtain         home       heating                                      
        assistance         from      the     department          only      through       the                                    
        organization        designated        by   the   department        to   serve    the                                    
        region."                                                                                                                
                                                                                                                                
        Renumber the following bill sections accordingly.                                                                       
                                                                                                                                
JAY    LIVEY,      staff     to   Senator      Hoffman,       explained       that     they    have                             
been    involved       in   a  lot    of   conversations         about    energy      prices     and                            
the     ability       that     Alaskan       families,         particularly         in     western                              
Alaska,      have    to   pay    their    heating      bills,      particularly        last    year                             
when     oil    was    peaking       at   $140/barrel.         As    a   result      they     began                             
looking       at    Alaska's       two     heating       assistance        programs        in    the                            
context      of   how    responsive        the   programs       are    to   the   actual      price                             
of   fuel    and    if   they    were     responsive       to   when     fuel    prices     change                              
for individuals. That is what led them to these amendments.                                                                     
                                                                                                                                
3:50:14 PM                                                                                                                    
SENATOR FRENCH joined the committee.                                                                                            
                                                                                                                                
3:51:40 PM                                                                                                                    
MR.    LIVEY     provided      a   document       called     "Alaska's        Current      Heating                              
Assistance        Programs"        and     explained       that     this     amendment        is    a                           
departure       from     the    rest    of   the    bill     as   these     heating      programs                               
deal    with     individual       assistance        and    the   rest     of   the    bill    deals                             
with institutional changes.                                                                                                     
                                                                                                                                
He   said    that    Alaska      has   two    heating     assistance        programs.       One    is                           
a  federal      program      that   has    been    around     a  long    time    and   is   called                              
"Low    Income      Heating     and    Energy     Assistance        Program"      (LIHEAP).        It                           
serves      individuals         at     150    percent       or    less     of    poverty;        the                            
eligibility         limit      is    about      $41,000/year/family             of    four.      The                            
current       federal        appropriation          is     $27     million       (as     per     the                            
department).                                                                                                                    
                                                                                                                                
SENATOR FRENCH asked if the state contributes to LIHEAP.                                                                        
                                                                                                                                
MR. LIVEY replied that it is a purely federal program.                                                                          
                                                                                                                                
He    said    the    second      program       is   the    "Alaska       Heating      Assistance                                
Program"      and    it   was   instituted        two   years     ago    to   serve    people      at                           
150-220        percent         of     poverty;         the       eligibility          limit        is                           
$63,000/family          of   four.    The    current     appropriation         is   $5   million.                               
This amendment focuses on these two programs.                                                                                   
                                                                                                                                
3:54:41 PM                                                                                                                    
As    they    went     through       this    process,       Mr.     Livey     said,     they     had                            
several      objectives       in    mind:    to   make     Alaska's      heating      assistance                                
programs       more    responsive        to   a   family's      actual      heating      costs     by                           
increasing        the   amount      of   the   assistance        and    to   do   a   better     job                            
of acknowledging actual heating costs.                                                                                          
                                                                                                                                
They    wanted      to   adhere     to   several      principles,         the   first     being     a                           
statewide        approach;        he    provided        a   document       listing       all     the                            
communities        in   Alaska     that    received      money     through      Alaska     heating                              
assistance         programs.        It    had    every      community        in    Alaska;       the                            
largest      users     were    along    the    Railbelt.       The    second     principle       was                            
that    they    wanted     to   use   the    existing      administrative          structure       as                           
much     as    possible.       LIHEAP      has     a   structure        that     uses     a   point                             
system     for    families      based     on   income,      fuel,    where     they    live,     how                            
cold    it   is   there,     size    of   their     house,     and    others     that    make    the                            
program      fairly      responsive        to    an    individual's         situation.        Their                             
administrative           structure       is    very     efficient.        It    operates       with                             
some part time help and a few full time employees.                                                                              
                                                                                                                                
3:57:25 PM                                                                                                                    
The    third     principle       was    making      the    program      responsive        to   fuel                             
costs.      This    was    found     to    be   a   serious      problem      last     year    with                             
many    consumers.       People     could     not   pay    their    fuel    bills     and   had   to                            
make serious choices about what they wanted to pay.                                                                             
                                                                                                                                
The     fourth       principle         was      to     establish        an     incentive         for                            
weatherization.           Everyone       knows     that     one    of    the    better      energy                              
programs       is   conservation;         so   they     tried    to    work    that    into    this                             
proposal.                                                                                                                       
                                                                                                                                
3:58:21 PM                                                                                                                    
MR.     LIVEY      said      the     way     the     current       program       operates,         an                           
individual       must    apply     to   the   program      each    year.    The    applications                                 
that    come    in   contain     the    information        that    the   department        uses    to                           
assign      points       for    each     applicant.         Generally,        the     department                                
estimates       the   cumulative        number     of   points     that    they    will    receive                              
in   a   given     year.    It    divides      the   available       appropriation          by   the                            
total     number      of   points      to   get    a   dollar      value.     This     year    it's                             
$113     per    point.      The     assistance        is    not    paid     directly       to    the                            
applicant;       they    must    designate       a   vendor     (their     fuel    distributor)                                 
on    their     application.         The    department        simply      sets     up   a   credit                              
account in that person's name with the vendor.                                                                                  
                                                                                                                                
3:59:54 PM                                                                                                                    
He   said     the    information        for    determining        points      is   based     on    an                           
individual's         application        as   well    as   some    other     information.         The                            
points      a   family      has    depends      on    some    variables        like     household                               
income,      heating     degree     days,     the   type    and    the   cost    of   fuel    used,                             
the    type    of   house    in   which     the   applicant       lives,     the    size    of   the                            
house      and    if    the     family      has     children,        elderly       or    disabled                               
individuals.         Taken     together,        the    number     of    points      a   household                               
gets is a pretty fair representation of their heating situation.                                                                
                                                                                                                                
4:01:34 PM                                                                                                                    
He   prepared       two    sample      calculations         of    how    it   might     work     and                            
reviewed        them     for     the     committee.        The     first      example       was     a                           
household       in   Toksook      Bay    that    got    21   points.      Because      they    live                             
in   a  two-bedroom        house     there    was   no   adjustment;        a  larger      home   or                            
a   mobile       home     would     have     an    adjustment.         This     family       had    a                           
poverty      level     of   75-100      percent      of   the    poverty      level,      so   they                             
got    a  4.2   point     deduction       or   80   percent      of   their    21   points.      Had                            
they     been      under      50    percent       of    poverty       there      would      be     no                           
deduction.        The   household       contains       children      so   they    got    1  point.                              
As a result their total points were 18.                                                                                         
                                                                                                                                
He   did   the    same    basic    calculation        for    Fairbanks,       but   changed      the                            
poverty       level      a   little       bit.     This     family      had     slightly       more                             
income;      consequently          50   percent       of   the    point     total      was    taken                             
away    as   opposed     to   80   percent      in   the   first    example.       Their    result                              
was    6   points.      The   current       program      pays    $115    per    point;      so   the                            
family     from    Toksook      Bay   would     get   $2070     and   the   Fairbanks       family                              
would get $690.                                                                                                                 
                                                                                                                                
CO-CHAIR       WIELECHOWSKI        reminded       people      that    this    is   the    way    the                            
current      system      works     and     asked     what     months     this     is    typically                               
available.                                                                                                                      
                                                                                                                                
MR.    LIVEY    answered       that    applications         begin    in   November       and   they                             
have     to   be    completed       by   April      15,    but    the    money     goes    on    the                            
books and can be used any time of the year.                                                                                     
                                                                                                                                
SENATOR      FRENCH      asked     what     mechanism        exists     to    keep     the    point                             
total     and   appropriation         per   family      from    exceeding      what    they    have                             
to distribute statewide.                                                                                                        
                                                                                                                                
MR.    LIVEY      answered       that    the     department        divides      the     available                               
appropriation           by    the     estimated         number      of     points.       He    also                             
prepared         a     current        heating        cost      estimate         and      assumed,                               
conservatively,           that     a   family     would      use    600    gallons      of    fuel:                             
Toksook      Bay    @   $6.08/gallon         =   fuel     bill    of    $3648;      Fairbanks       @                           
$3.07/gallon         =   fuel     bill     of   $1842.      In    Toksook      Bay     they    were                             
paying      58    percent      of    the    household's         need;      in   Fairbanks,         37                           
percent.                                                                                                                        
                                                                                                                                
SENATOR      FRENCH     asked     how    the    relative       poverty      of   an   individual                                
influences the number of points they get.                                                                                       
                                                                                                                                
MR.   LIVEY     said    the   department        regulations        explain     how    the   points                              
are    affected      by    a  household's         poverty.      If   a   household's        income                              
is   50   percent      of    the   poverty      level     or    less,    then     they    get    100                            
percent      of  the    points     and   they    get    no  deduction.        He   went    back    to                           
the examples and showed him how the progression worked.                                                                         
                                                                                                                                
4:07:27 PM                                                                                                                    
MR.   LIVEY     said    Section      21  [of    Amendment       K.1]   changes      the    name   of                            
the    Alaska     Heating      Assistance        Program      to    the   Alaska      Affordable                                
Heating       Program,       because      it    does     a   better      job     of   trying       to                           
explain      their     version      of   the    program,      which     is   to   make     heating                              
more     affordable        for     residents       of    the    state      and    not     just     be                           
assistance.         Section       22    on    page     1,   line      17,    establishes         the                            
Alaska      Affordable        Heating       Fund     in    the    Department         of    Revenue                              
(DOR),      but     doesn't       put     money     into      it.    Section       23    conforms                               
existing law to the name change.                                                                                                
                                                                                                                                
Sections       24    and     25    contain      more     significant         changes       to    the                            
program.        He    reminded        them     that     they      wanted      to    make      these                             
programs      linked     more    closely      to   the   price     of  oil.    So,    Section     24                            
says    if   the    price     of   a   barrel     of   crude     oil    as   measured       by   the                            
DOR   exceeds      $150,     eligibility        is  extended       for   the    highest     income                              
group     from     225    percent       of   poverty       to   250     percent      of    poverty                              
(raising the $62,000 for a family of four to $68,000).                                                                          
                                                                                                                                
4:10:15 PM                                                                                                                    
MR.    LIVEY    said     they    are    also    trying     to   correspond        the    price    of                            
oil   to   an   individual's         affordability.         So   they    raised     the    dollars                              
per    point    based     on   how   much    a   barrel     of   crude     oil   costs.     Before                              
the   points      were   simply      calculated       as   a  division      of   the    available                               
appropriation          divided      by    the    number      of   points.       Here    they     are                            
actually      saying     that    the    dollar     value    of   a  point     depends      on  what                             
a   barrel     of    oil   is.    For    example,       it   says     if   oil    is   less    than                             
$75/barrel,        then    the    dollars     per    point     is   $130.    If   crude     oil    is                           
$75-100/barrel,           then    the    price     of   a   point     goes    to   $140     and    so                           
on.     The    idea      is    to    have     some     link      between      the     amount       of                           
assistance        an   individual        family      is   getting      and    the    price     of   a                           
barrel of oil.                                                                                                                  
                                                                                                                                
Third,     he   explained,       because      they    have    said    that    a  point     is  $130                             
when    crude     is   less    than    $75,    that    means     they    have    automatically                                  
raised      the    floor      per    point     for    this     program       to   $130.      It    is                           
currently $115.                                                                                                                 
                                                                                                                                
Next,     he   said    they    added     one    point     as   an   incentive       to   families                               
who    apply    for    the    weatherization         program.       This    section      might    be                            
problematic          for     the     department         because       of    difficulties           in                           
getting this information from the weatherization providers.                                                                     
                                                                                                                                
Last,     Mr.     Livey     explained,        because       they     didn't      want     this     to                           
become      an   entitlement         program,       they    have     given     the    department                                
the    ability       to    prorate       the    assistance        amounts       if    sufficient                                
money     has    not   been     appropriated        to    the   Legislature        to    meet    the                            
dollar per points they are putting in statute.                                                                                  
                                                                                                                                
SENATOR       WAGONER       said      it    looks      to    him     like     it    becomes        an                           
entitlement         program      once    it's     initiated,        much     like    the    former                              
longevity bonus program.                                                                                                        
                                                                                                                                
MR.    LIVEY     said    that    it    is   set    up   to   be    a  way    of   providing       an                            
indication       of   how    much    should     be   appropriated        based     on  the    level                             
of   affordability,          but   legally      it  doesn't      have    to   be   appropriated                                 
that way.                                                                                                                       
                                                                                                                                
SENATOR       FRENCH       said      the     comparison          between       this      and     the                            
longevity       bonus     is   good,     but   it    is   also    misleading        in   that    the                            
longevity       bonus     was    paid    whether      the    state     had    a   surplus      or   a                           
deficit.       This    is   designed       so   that     the    money     is   available       only                             
when    oil   prices     are    very    high.    When    the    oil   prices     are   very    low,                             
the    need    for   assistance        is   far   lower     because      home    heating      costs                             
are    far   lower.     At   the    same    time    the    state    treasury       doesn't     have                             
any extra money in it.                                                                                                          
                                                                                                                                
4:17:16 PM                                                                                                                    
RON     KREHER,        Chief,       Field       Operations,          Division        of     Public                              
Assistance,         Department        of    Health      and    Social       Services       (DHSS),                              
said he oversees the heating assistance programs for the state.                                                                 
                                                                                                                                
CO-CHAIR       WIELECHOWSKI         asked     if   the    department       had    any    comments                               
on the proposed amendment.                                                                                                      
                                                                                                                                
MR.    KREHER     answered      yes;    essentially        he   said     this    is   the   Alaska                              
Heating       Assistance        Program       with     variations,         which      Mr.     Livey                             
pointed      out.    It  fixes     the   funding      levels     to   the   average      price    of                            
a   barrel     of   crude     oil,    but    then    it   also    fixes     the   dollar      value                             
for     community         heating       points.        It     also     potentially          pushes                              
eligibility up to 250 percent of the federal poverty guidelines.                                                                
                                                                                                                                
Some    provisions       cause     them    administrative          challenges,        Mr.   Kreher                              
said.     The   methodology        for   calculating        the    average     price     of   North                             
Slope     crude      for    the    prior      fiscal      year     makes     forward       funding                              
planning       a   little      more     of   a   challenge.         For    example,       if   this                             
amendment       was    adopted     effective       July    1,   they     would    look    back     at                           
the   prior     fiscal     year    for   the    average     price     of   a  barrel     of   North                             
Slope     crude     between       February      and     September.       So,     they    wouldn't                               
have the window they would need to calculate the funding level.                                                                 
                                                                                                                                
4:19:54 PM                                                                                                                    
MR.    KREHER     said    there    is   also    concern      that    oil    could    have     a  low                            
value     in   that    prior     fiscal      year,     but    a  very    high     value     in   the                            
program      year     causing      them    to    come    up    short.     He    said    they     are                            
also     always       uncertain        about      federal       funding       levels       and     he                           
mentioned        that    the     current      administration           is   using      a   similar                              
model     for    triggering       payments       for    LIHEAP.      What    would     happen      if                           
they     didn't      get    sufficient        federal       funding      to    pay     LIHEAP      in                           
excess of $130 per point?                                                                                                       
                                                                                                                                
Another      area    of   concern      is    that    it's    difficult       to   estimate       the                            
size    of   the   population        they   would     be   serving     in   Section      24   (page                             
2,   lines     21-22)     where     eligibility        limits     are    bumped     up   when    the                            
price      of   a    barrel      of    oil    gets     above      $150.     Also     if    it's     a                           
significant        increase,       the   department        would    probably      have    to   find                             
additional          staff      resources         -     and     probably         look      at     the                            
possibility         of     long-term        non-permanent          positions        they      could                             
bring in as the demand came up.                                                                                                 
                                                                                                                                
Overall,       he   also    thought,       some    of   the    provisions       would     be   very                             
challenging        for    their     11   tribal      grantees      across      the   state     that                             
operate      tribal      LIHEAP      programs       and    the    8   tribes      that     operate                              
regional          programs.           "Administrative               demands          on       those                             
organizations         are    very    very    challenging,"         he  said.     They    all   have                             
different       plans    that    are    all   approved      by   the    federal     government.                                 
Currently       their    regional       programs      mirror     their     federal     plans;     so                            
many     of    them      don't     use     a    point     system       to    issue      benefits.                               
Different       methodologies         are   used    that    may    create     a  challenge       for                            
those      folks     to     continue       to    run     regional       heating       assistance                                
programs,        which      may    mean     that     work     would      come     back     to    the                            
division.                                                                                                                       
                                                                                                                                
The    weatherization         incentive        can   create      some    problems,       as   well,                             
Mr.    Kreher     agreed.      Many    providers       for    weatherization          assistance                                
are    out    there     and    tracking       them    would     be    challenging.         Someone                              
from    AHFC     might    be    able    to   say    if   it   is   even     practical       to   do.                            
Also,     many    people     are    ineligible.        You   can    get   one    only    every     15                           
years;      if   you    change     dwellings        you   may    apply     for    another      one.                             
Renters      have    to  get    the   cooperation        of   their     landlord      to   approve                              
them.                                                                                                                           
                                                                                                                                
Section        25     that       talks       about      the      proration         needs       more                             
clarification.          It's    uncertain       what    would     happen     after     the    first                             
year     finances        were     provided.        To    some     extent      this      proration                               
language      conflicts       with    setting      statutory       points     and   then    having                              
a   way   of   overriding        that.     He   would    like     to   see   set    funding      for                            
the    heating     assistance        programs      and    have    that    level     tied    to   the                            
price      of     oil,     because       it     makes      sense.       It    recognizes         the                            
additional        demand      on   people      that     are    receiving       the    assistance                                
and   it   provides      a   fixed    basis     from    which    to   operate      the   program.                               
Overall,      the    general      administration          would    be   the    same;     the   only                             
additional        demand     might     be   trying     to   address      the   possibility        of                            
having slow growth in pushing into the 225 percent limit.                                                                       
                                                                                                                                
CO-CHAIR        WIELECHOWSKI          found       no    further        testimony         on    this                             
amendment       and   set    it   aside.     He   said    it   was    an   excellent       attempt                              
at   trying      to   solve     a  problem      and    looking      at   the    key    issues      of                           
extremely       high    costs     in   rural    and    other     parts    of   Alaska,      taking                              
into    account      peoples'       relative       abilities       to   pay,    and    the    price                             
of oil.                                                                                                                         
                                                                                                                                
CO-CHAIR      WIELECHOWSKI         said    they    had   one    last    amendment      [K.3]     for                            
the day by Senator Dyson.                                                                                                       
                                                                                                                                
                                                                               26-LS1197\K.3                                    
                                                                                           Kane                                 
                                                                                                                                
                                    AMENDMENT K.3                                                                           
                                                                                                                                
                   OFFERED IN THE SENATE TO:  CSSB 220(RES), Draft                                                              
        Version "K"                                                                                                             
                                                                                                                                
        Page 1, line 3:                                                                                                         
                Delete the first occurrence of "and"                                                                          
                                                                                                                                
                 Page 1, line 5, following the second occurrence of                                                             
        "fund":                                                                                                               
                Insert "; and directing the Department of                                                                     
        Transportation           and     Public      Facilities         to    prepare       a                                 
        report     on   the    feasibility        of   using     compressed        natural                                    
        gas   to   power     vehicles      in   the   state,     including       vehicles                                     
        owned     or   operated      by   the    state,     and    including       in   that                                  
        study,      if    warranted,         a   pilot      program       proposal       for                                  
        powering      some    vehicles       owned     or   operated      by   the    state                                   
        with compressed natural gas"                                                                                          
                                                                                                                                
        Page 14, following line 10:                                                                                             
                Insert a new bill section to read:                                                                              
             "*   Sec.     27.    The     uncodified        law    of    the    State      of                               
        Alaska is amended by adding a new section to read:                                                                      
                USE OF COMPRESSED NATURAL GAS TO POWER VEHICLES;                                                                
        PILOT      PROGRAM;        STUDY;       PROPOSAL;         REPORT.        (a)     The                                    
        Department         of    Transportation           and     Public      Facilities                                        
        shall,       under      the     authority         of    AS   44.42.020(a)(3),                                           
        study     the   feasibility         of   using     compressed       natural      gas                                    
        to power vehicles in the state. The study must                                                                          
                       (1)      review     existing      government        programs      and                                    
        incentives        offered      in    Utah     and    other     North     American                                       
        jurisdictions           that     promote        the     use     of    compressed                                        
        natural gas to power vehicles;                                                                                          
                       (2)       review      and    summarize       relevant       studies                                      
        and       investigations            on       existing         public        policy                                      
        incentives         that      encourage         the     use     of     compressed                                        
        natural gas to power vehicles;                                                                                          
                       (3)      evaluate      the    environmental         benefits      and                                    
        technical       merits      of    using     compressed        natural       gas    to                                   
        power vehicles;                                                                                                         
                       (4)       consider       the    economic,        environmental,                                          
        and     technological           advantages         and     disadvantages           of                                   
        using     and   promoting       the    use    of   compressed       natural      gas                                    
        to power vehicles in the state; and                                                                                     
                       (5)       if    warranted        by   the    findings       of    the                                    
        study,     set    out    a  proposal       for    a  pilot     program      in   the                                    
        state     to    test    the    use     of   compressed        natural       gas    to                                   
        power     vehicles       owned      or   operated       by    the    state;      the                                    
        proposal must                                                                                                           
                       (A)       recommend       the    most     cost-effective          and                                    
        appropriate        departments        and   geographic        locations       for   a                                   
        pilot program;                                                                                                          
                       (B)         detail       how     the     pilot      program,        if                                   
        successful,        could    be   expanded       to   provide     for    increased                                       
        use   of    compressed       natural      gas    to   power     vehicles      owned                                     
        or   operated       by   the    state,     as   well     as   privately       owned                                     
        or operated vehicles;                                                                                                   
                       (C)  estimate the costs to the state of a                                                                
        pilot      program       in     which      the     state      would      purchase                                       
        vehicles      powered      by   compressed        natural      gas    or   convert                                      
        existing      vehicles       to   be   powered      by   compressed        natural                                      
        gas, including                                                                                                          
                       (i)  the costs of maintaining vehicles                                                                   
        powered        by     compressed         natural        gas      and     training                                       
        maintenance personnel;                                                                                                  
                       (ii)  the costs of adapting, or encouraging                                                              
        the    adapting       of,    state     vehicle       fueling      locations        to                                   
        provide compressed natural gas;                                                                                         
                       (iii)  the costs of using compressed natural                                                             
        gas instead of diesel fuel or gasoline;                                                                                 
                       (iv)  the costs of expanding the pilot                                                                   
        program      or   developing        additional        pilot    programs       under                                     
        (B) of this paragraph;                                                                                                  
                       (v)  other costs or savings that can be                                                                  
        reasonably expected to accompany the pilot program.                                                                     
                (b)  The Department of Transportation and Public                                                                
        Facilities         shall      prepare       a    report       containing         the                                    
        results      of    the    study     under     (a)     of   this     section      not                                    
        later      than     December      1,    2010.      The     department         shall                                     
        notify the legislature when the report is available."                                                                   
                                                                                                                                
4:25:18 PM                                                                                                                    
SENATOR      DYSON      said    this     Amendment        K.3    [labeled       26-LS1197\K.3]                                  
inserts      a  section      that    has    the    Department       of   Transportation          and                            
Public       Facilities        (DOTPF)       evaluating         the     use     of    compressed                                
natural      gas   in   the    transportation          sector     (vehicles).        He   said    of                            
all    the    things      they    are    trying      to   do    with    more     efficient       and                            
cleaner      fuels,      very     few    of    them     apply     well     in   vehicles,        but                            
compressed        natural      gas    and   propane      do.    According       to   USDOE     2006                             
figures,      there     is   somewhere      over    8   million     vehicles       in  the    world                             
that     are    powered      by    compressed        by   natural       gas.    Some     vehicles                               
have     dual    fuel     capacity.        A  number      of    folks     where     he    and    the                            
chair     live     have     generators         sitting      at    home     that     are    run     by                           
natural       gas;      and     a    number      of     neighbors        have      a    slow-fill                               
compressor        in   their     house     from    which     they    can    pump    natural      gas                            
into their vehicles overnight while they are parked.                                                                            
                                                                                                                                
SENATOR      DYSON     said    making      the   compressed        natural      gas    work    is   a                           
chicken      and    egg   sort     of   thing.     The    fast-fill       compressors        are    a                           
bit   expensive,        so   a  network     of   users     is   needed     to  make    their     use                            
feasible.        Portland,        Oregon's,         school      buses      are     all     run     on                           
compressed        natural      gas    and   transport       12,000      students       a  day    and                            
most    of   Utah's     fleet     vehicles       are   running      on   compressed        natural                              
gas.     The   emissions        from    compressed        natural      gas    are    20    percent                              
less     than     from     gasoline.        This     amendment        asked     the     DOTPF      to                           
evaluate       its    feasibility,          but    he   suspected        that     their     answer                              
would     be   that    many    in   the    world     are   using     it   and    if   the   public                              
sector     would     get    some    fast-fill       compressors        set    up,   the    private                              
sector     would     very    quickly      follow.      His    research      included       talking                              
to   two    different       national      manufacturer         of   school     buses     who   said                             
ordering      buses     set   up   at   the   get-go     to   run   on   compressed        natural                              
gas    comes    very    close     to   the    original      price;     one    said    maybe    $10K                             
more per copy.                                                                                                                  
                                                                                                                                
SENATOR       DYSON     said     municipal        landfills        are    producing        methane                              
approximately         equivalent        to   5,000     gallons     in   gasoline       per   day    -                           
enough     to   run   all    the   fleet     vehicles,       private     and    government,        in                           
the    entire     city    of   Anchorage.       Cleaner      and    cheaper     fuel     -  he   had                            
talked     to   people      who    go   9000    miles     between      oil   changes      and    the                            
oil    is   perfectly       clean.     Light     commercial       vehicles,       pickups      with                             
one     million       miles      running       on    compressed         natural       gas.     This                             
amendment       would      get    Alaska     started       on   that     which     much    of    the                            
world is already doing.                                                                                                         
                                                                                                                                
CO-CHAIR        WIELECHOWSKI           thanked       him      and     said      it's      a    very                             
intriguing idea that is definitely worth pursuing.                                                                              
                                                                                                                                
SENATOR      FRENCH     asked     if   any    compressed       natural      gas    stations      are                            
operating in Alaska now.                                                                                                        
                                                                                                                                
SENATOR      DYSON    answered      the    Alaska     Railroad      had    one   that    they    are                            
doing "kind of a pilot project" with.                                                                                           
                                                                                                                                
SENATOR       FRENCH      said     apparently         running       a   bus     on    compressed                                
natural      gas    isn't     that    complicated        because      he   sees    them     on   the                            
road and he asked what's holding us up.                                                                                         
                                                                                                                                
SENATOR      DYSON     said    it's    just    the    chicken      and    the   egg.     You   just                             
have    to   get    going     or   they    will    start     having     to   answer      why   they                             
haven't done this yet.                                                                                                          
                                                                                                                                
4:31:38 PM                                                                                                                    
MARY    SIROKI,       Special      Assistant       to   the    Commissioner,          Department                                
of   Transportation          and    Public     Facilities        (DOTPF),      said    they    have                             
analyzed      this     bill    and   have    a   very    small     fiscal     note    associated                                
with the study that they will go forward with if it is adopted.                                                                 
                                                                                                                                
SENATOR      DYSON      said    Congress       has    bills      pending      that     will    give                             
very    significant        tax    incentives        or   rebates      for   using     compressed                                
natural gas vehicles.                                                                                                           
                                                                                                                                
4:33:13 PM                                                                                                                    
SENATOR WAGONER offered Amendment K.6.                                                                                          
                                                                            26-LS1197\K.6                                       
                                                                                        Kane                                    
                                                                                                                                
                                    AMENDMENT K.6                                                                           
                                                                                                                                
        OFFERED IN THE SENATE                      BY SENATOR WAGONER                                                           
        TO:  CSSB 220(RES), Draft Version "K"                                                                                   
                                                                                                                                
        Page 1, line 4, following "plan,":                                                                                    
                Insert "to a light bulb exchange program,"                                                                    
                                                                                                                                
        Page 12, following line 2:                                                                                              
                Insert a new bill section to read:                                                                              
             "*   Sec.     17.    AS   44.83     is   amended       by   adding      a   new                                  
        section to read:                                                                                                        
                Sec. 44.83.965. Light bulb exchange program. (a)                                                              
        To   provide      fluorescent         light     bulbs     to   rural     electric                                       
        cooperatives         organized        under      AS   10.25     and     to    those                                     
        municipal          electric         utilities,          regional         electric                                       
        authorities,          and     joint      action       agencies        that      have                                    
        annual      sales      of     at    least      800     megawatt-hours,           the                                    
        authority        shall      initiate        and    maintain        a    voluntary                                       
        light      bulb     exchange        program       that     conforms        to    the                                    
        requirements of this section.                                                                                           
                (b)  An entity described in (a) of this section                                                                 
        may    participate         in    the    exchange       program       under      this                                    
        section.      An    entity     that     elects     to    participate        in   the                                    
        program        shall      allow       a    customer        to     exchange         an                                   
        incandescent         light     bulb    for    a   fluorescent         light     bulb                                    
        of    the    same     number      and    wattage       at    no   cost     to    the                                    
        customer.       A    customer       may    not    exchange       more     than     15                                   
        light bulbs for each transaction.                                                                                       
                (c)  Subject to appropriation, the authority                                                                    
        shall     purchase       the    amount     of    fluorescent        light     bulbs                                     
        necessary       to   provide      each    entity      participating         in   the                                    
        program       with      enough       light      bulbs       to     sustain       the                                    
        exchange program.                                                                                                       
                (d) The authority shall adopt regulations to                                                                    
        implement        the    program       and    prescribe        a   form     for     an                                   
        entity      to    request      fluorescent         light      bulbs     from     the                                    
        authority       and   to   report     to   the   authority       the    number     of                                   
        light bulbs exchanged."                                                                                                 
                                                                                                                                
        Renumber the following bill sections accordingly.                                                                       
                                                                                                                                
SENATOR      WAGONER      explained        that    his    amendment       takes     fluorescent                                 
bulbs     and     distributes         them    at    state      expense      for    three      years                             
until     people      can   see    for    themselves        how    much    energy      they    have                             
saved.     The   one    problem      he  has    is   that    fluorescent       bulbs     are   high                             
in   mercury     and    they    need    to   know    what    kind   of   collection        process                              
rural areas have.                                                                                                               
                                                                                                                                
SENATOR FRENCH asked who the cost falls on.                                                                                     
                                                                                                                                
SENATOR      WAGONER      answered      the    State    of    Alaska     would     subsidize       it                           
for three years.                                                                                                                
                                                                                                                                
4:34:41 PM                                                                                                                    
SARAH     FISHER-GOAD,          Deputy      Director,       Operations,         Alaska      Energy                              
Authority        (AEA),      commented        that      she    hadn't      seen      the    latest                              
version      of  the    amendment,       but    she   would     need   to   get    an   estimated                               
cost for AEA to implement a light bulb exchange program.                                                                        
                                                                                                                                
CO-CHAIR      WIELECHOWSKI         said    it   would     be   helpful      if   she   could     get                            
more detailed comments and any fiscal implications.                                                                             
                                                                                                                                
4:36:14 PM                                                                                                                    
SENATOR      WAGONER      asked    if   she    knew    of   a  rural     collections        system                              
for fluorescent bulbs.                                                                                                          
                                                                                                                                
MS.    FISHER-GOAD        replied      that    she    thought     Chugach      Electric       would                             
take     light     bulbs     as    well     as   a   private       company      called      "Total                              
Reclaim."       She    didn't      know    if    rural     Alaska      had   any    coordinated                                 
effort to turn in those light bulbs.                                                                                            
                                                                                                                                
4:37:40 PM                                                                                                                    
CO-CHAIR        WIELECHOWSKI           asked      the     administration            to     provide                              
appropriate         fiscal     notes     by    next     Monday     afternoon.        Finding       no                           
further      business      to   come    before      the   committee,        he   adjourned       the                            
meeting at 4:37 p.m.                                                                                                            

Document Name Date/Time Subjects
Possible Amendment - 26-LS1197K.1.pdf SRES 2/18/2010 3:30:00 PM
Possible Amendment - 26-LS1197K.2 - SB 220.pdf SRES 2/18/2010 3:30:00 PM
SB 220
Possible Amendment - 26-LS1109K.3 - SB 220.pdf SRES 2/18/2010 3:30:00 PM
SB 220
SB 220 version K.pdf SRES 2/15/2010 3:30:00 PM
SRES 2/18/2010 3:30:00 PM
SRES 2/22/2010 3:30:00 PM
SRES 2/24/2010 3:30:00 PM
SB 220