Legislature(1995 - 1996)

02/21/1995 01:03 PM House CRA

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
              HOUSE COMMUNITY AND REGIONAL AFFAIRS                             
                       STANDING COMMITTEE                                      
                        February 21, 1995                                      
                           1:03 p.m.                                           
                                                                               
                                                                               
 MEMBERS PRESENT                                                               
                                                                               
 Representative Ivan Ivan, Co-Chair                                            
 Representative Alan Austerman, Co-Chair                                       
 Representative Jerry Mackie                                                   
 Representative Kim Elton                                                      
 Representative Al Vezey                                                       
 Representative Pete Kott                                                      
 Representative Irene Nicholia                                                 
                                                                               
 MEMBERS ABSENT                                                                
                                                                               
 None                                                                          
                                                                               
 OTHER HOUSE MEMBERS PRESENT                                                   
                                                                               
 Representative Con Bunde                                                      
                                                                               
 COMMITTEE CALENDAR                                                            
                                                                               
 * HB 154:   "An Act requiring the Department of Law to provide                
             guidelines regarding unconstitutional state and                   
             municipal takings of private real property; relating              
             to the taxation of private real property taken                    
             unconstitutionally by state or municipal action;                  
             establishing a time limit for bringing an action                  
             for an unconstitutional state or municipal taking of              
             private real property; and providing for an effective             
             date."                                                            
                                                                               
             HEARD AND HELD                                                    
                                                                               
  HB 80:     "An Act relating to the approval, change, or                      
             vacation of subdivision plats in areas outside                    
             organized boroughs, in the unorganized borough                    
             outside of cities, and in the third class boroughs;               
             and relating to the definitions of `street' and                   
             `subdivision'."                                                   
                                                                               
             PASSED OUT OF COMMITTEE                                           
                                                                               
 OVERVIEW:   Division of Energy                                                
                                                                               
 (* First Public Hearing)                                                      
                                                                               
 WITNESS REGISTER                                                              
                                                                               
 REPRESENTATIVE VIC KOHRING                                                    
 Alaska State Legislature                                                      
 State Capitol Building, Room 428                                              
 Juneau, Alaska 99811                                                          
 Telephone: (907) 465-2186                                                     
 POSITION STATEMENT:  Introduced HB 154 as the bill sponsor                    
                                                                               
 CRAIG LYON, House Researcher                                                  
 Representative Vic Kohring                                                    
 Alaska State Legislature                                                      
 State Capitol Building, Room 428                                              
 Juneau, Alaska 99811                                                          
 Telephone: (907) 465-2186                                                     
 POSITION STATEMENT:  Followed up on the testimony given by                    
                      Representative Kohring                                   
                                                                               
 STEVE VAN SANT, State Assessor                                                
 Department of Community and Regional Affairs                                  
 333 W. 4th Ave., Ste. 319                                                     
 Anchorage, Alaska 99501                                                       
 Telephone: (907) 269-4500                                                     
 POSITION STATEMENT:  Answered questions on HB 154                             
                                                                               
 STEVE NOEY, Real Estate Agent                                                 
 1300 E. 80th                                                                  
 Anchorage, AK 99518                                                           
 Telephone: (907) 274-8596                                                     
 POSITION STATEMENT:  Testified in favor of HB 154                             
                                                                               
 SARA HANNON, Lobbyist                                                         
 Alaska Environmental Lobby, Inc.                                              
 P.O. Box 22151                                                                
 Juneau, AK 99802                                                              
 Telephone: (907) 463-3366                                                     
 POSITION STATEMENT:  Testified in opposition to HB 154                        
                                                                               
 REPRESENTATIVE JEANNETTE JAMES                                                
 Alaska State Legislature                                                      
 State Capitol Building, Room 102                                              
 Juneau, AK 99811                                                              
 Telephone: (907 465-3743                                                      
 POSITION STATEMENT:  Prime Sponsor of HB 80                                   
                                                                               
 RICK ELLIOT, Municipal Lands Trustee                                          
 Department of Community and Regional Affairs                                  
 333 W 4th St., Ste. 319                                                       
 Anchorage, Alaska 99501                                                       
 Telephone: (907) 269-4500                                                     
 POSITION STATEMENT:  Answered questions on HB 80                              
                                                                               
 PAT KALEN, Surveyor                                                           
 American Congress on Surveying and Mapping (ACSM)                             
 5410 Grosbenor Lane                                                           
 Bethesda, MD 20814                                                            
 Telephone:  None Available                                                    
 POSITION STATEMENT:  Testified and answered questions on HB 80                
                                                                               
 RON SWANSON, Director                                                         
 Division of Land                                                              
 Department of Natural Resources                                               
 3601 C St., Ste. 1122                                                         
 Anchorage, AK 99503-5947                                                      
 Telephone: (907) 762-2692                                                     
 POSITION STATEMENT:  Testified and answered questions on HB 80                
                                                                               
 PERCY FRISBY, Director                                                        
 Division of Energy                                                            
 Department of Community and Regional Affairs                                  
 333 W. 4th Ave., Ste. 220                                                     
 Anchorage, AK 99519-2341                                                      
 Telephone: (907) 269-4640                                                     
 POSITION STATEMENT:  Presented Overview on the Division of Energy             
                                                                               
 ERIC MARCHEGIANI, Manager/Engineering                                         
 Division of Energy                                                            
 Department of Community and Regional Affairs                                  
 333 W. 4th Ave., Ste. 220                                                     
 Anchorage, AK 99519-2341                                                      
 Telephone: (907) 269-4698                                                     
 POSITION STATEMENT:  Participated in Division of Energy Overview              
                                                                               
 GLORIA MANNI, Administration Manager                                          
 Division of Energy                                                            
 Department of Community and Regional Affairs                                  
 333 W. 4th Ave., Ste. 220                                                     
 Anchorage, AK 99519-2341                                                      
 Telephone: (907) 269-4642                                                     
 POSITION STATEMENT:  Participated in Division of Energy Overview              
                                                                               
 RICHARD EMERMAN, Senior Economist                                             
 Division of Energy                                                            
 Department of Community and Regional Affairs                                  
 333 W. 4th Ave., Ste. 220                                                     
 Anchorage, AK 99519-2341                                                      
 Telephone: (907) 269-4644                                                     
 POSITION STATEMENT:  Participated in Division of Energy Overview              
                                                                               
 FRANK J. BETTINE, President                                                   
 Alaska Cogeneration Systems                                                   
 229 Whitney Road                                                              
 Anchorage, AK 99501                                                           
 Telephone: (907) 278-7283                                                     
 POSITION STATEMENT:  Presented Overview of the Cogeneration Systems           
                                                                               
 PREVIOUS ACTION                                                               
                                                                               
 BILL:  HB 154                                                               
 SHORT TITLE: REGULATORY TAKING OF PRIVATE PROPERTY                            
 SPONSOR(S): REPRESENTATIVE(S) KOHRING                                         
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 02/03/95       237    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 02/03/95       237    (H)   CRA, JUD, FIN                                     
 02/16/95              (H)   CRA AT 01:00 PM CAPITOL 124                       
 02/21/95              (H)   CRA AT 01:00 PM CAPITOL 124                       
                                                                              
 BILL:  HB  80                                                                
 SHORT TITLE: DNR APPROVAL OF PLATS IN UNORG BOROUGH                           
 SPONSOR(S): REPRESENTATIVE(S) JAMES                                           
                                                                               
 JRN-DATE     JRN-PG               ACTION                                      
 01/13/95        41    (H)   PREFILE RELEASED                                  
 01/16/95        41    (H)   READ THE FIRST TIME - REFERRAL(S)                 
 01/16/95        41    (H)   COMMUNITY & REGIONAL AFFAIRS, RESOURCES           
 01/31/95              (H)   CRA AT 01:00 PM CAPITOL 124                       
 01/31/95              (H)   MINUTE(CRA)                                       
 02/02/95              (H)   CRA AT 01:00 PM CAPITOL 124                       
 02/16/95              (H)   CRA AT 01:00 PM CAPITOL 124                       
 02/21/95              (H)   CRA AT 01:00 PM CAPITOL 124                       
                                                                               
                                                                               
 ACTION NARRATIVE                                                              
                                                                               
 TAPE 95-3, SIDE A                                                             
 Number 000                                                                    
                                                                               
 CO-CHAIR IVAN called the House Committee on Community and Regional            
 Affairs to order at 1:03 p.m.  Members present at the call to order           
 were Representatives Austerman, Vezey and Nicholia.  Members absent           
 at the call to order were Representative Mackie, Elton and Kott.              
 CO-CHAIR IVAN went over the meeting agenda and recognized those on            
 teleconference from Anchorage, Mat-Su, Kenai, and Homer.  He                  
 invited bill sponsor, Representative Vic Kohring to introduce HB
 154.                                                                          
                                                                               
 HCRA - 02/21/95                                                               
 HB 154 - REGULATORY TAKING OF PRIVATE PROPERTY                               
                                                                              
 Number 031                                                                    
                                                                               
 REPRESENTATIVE VIC KOHRING, sponsor of HB 154, stated that                    
 "takings" did not refer to literally taking of property but                   
 referred to reclassifying property in such a way that it diminished           
 the economic value of the property and restricted a private                   
 property owner from being able to develop that property as she/he             
 deemed fit.  With the "taking" it created an economic hardship for            
 the property owner.  One example of a "taking" involved a lake                
 front lot on which a property owner wished to build his/her home,             
 and a government entity came in and stipulated there would be a               
 minimum property separation on the land.  Representative Kohring              
 stated this tended to render a lot of property useless in terms of            
 its development capabilities creating diminished land value.  This            
 bill would provide a means of compensation for owners whose                   
 properties have been "taken."  He stated the form of compensation             
 referred to in the bill would be to adjust the assessed value of              
 the land reducing the tax amount on that land.  He then asked Craig           
 Lyon, his legislative aide, to come forth and answer questions.               
                                                                               
 Number 114                                                                    
                                                                               
 CRAIG LYON, Legislative Researcher for Representative Kohring, said           
 he welcomed any comments or questions from committee members.                 
                                                                               
 Number 119                                                                    
                                                                               
 CO-CHAIR IVAN recognized the attendance of Representative Pete                
 Kott.  He also invited comments or questions from committee                   
 members.  He then recognized Steve Van Sant on teleconference.                
                                                                               
 Number 130                                                                    
                                                                               
 STEVE VAN SANT, State Assessor, Department of Community and                   
 Regional Affairs (DCRA), clarified that he wasn't testifying, but             
 was available to answer any questions concerning assessments.                 
                                                                               
 Number 137                                                                    
                                                                               
 REPRESENTATIVE AL VEZEY questioned the use of the word                        
 "unconstitutionally."  He said it took a Supreme Court                        
 determination to establish  "unconstitutionally taken."                       
                                                                               
 Number 145                                                                    
                                                                               
 MR. LYON stated he was unsure as to how to answer the question.  He           
 said the bill referred to the current Alaska Constitution                     
 concerning private properties/eminent domain.                                 
                                                                               
 Number 151                                                                    
                                                                               
 REPRESENTATIVE VEZEY wondered how an "unconstitutional taking"                
 would be established.  He said a regulatory agency and a property             
 owner could not make that determination.                                      
                                                                               
 Number 156                                                                    
                                                                               
 MR. LYON said that according to the State Constitution, if property           
 was taken through regulatory means and the value of the property              
 went down, then the owner needs to be justly compensated.  He                 
 clarified eminent domain versus regulation, stating that with the             
 first, the state essentially owns the title to the land and with              
 the second, the owner still has the title to the land with little             
 or no economic value to his land.                                             
                                                                               
 Number 174                                                                    
                                                                               
 REPRESENTATIVE VEZEY stated the "power of eminent domain" is the              
 power that the state has under the Constitution and has to be                 
 exercised in accordance with peoples' constitutional property                 
 rights.   He said the stake in political subdivisions can certainly           
 deprive people of their property without using eminent domain.                
                                                                               
 Number 182                                                                    
                                                                               
 MR. LYON said the purpose of the bill is to stop the government               
 from doing this.                                                              
                                                                               
 Number 184                                                                    
                                                                               
 REPRESENTATIVE VEZEY asked who was going to make the determination            
 that the "taking" was "unconstitutionally" done?                              
                                                                               
 Number 188                                                                    
                                                                               
 MR. LYON again brought up the part of the bill that refers to the             
 "taking" of private property without adequate compensation.  The              
 owner might still have the title, but the property would have lost            
 all or most of its value to the owner.  Upon the loss of value,               
 then according to the bill, the owner can say his property has been           
 "taken" and can claim compensation.                                           
                                                                               
 Number 202                                                                    
                                                                               
 REPRESENTATIVE VEZEY still wanted to know how "unconstitutionally             
 taken" was going to be determined.                                            
                                                                               
 Number 204                                                                    
                                                                               
 MR. LYON wasn't sure unless it had to do with the guidelines the              
 bill was asking the Department of Law to develop to show when those           
 properties would be "taken" in an "unconstitutional" manner.                  
                                                                               
 Number 210                                                                    
                                                                               
 CO-CHAIR ALAN AUSTERMAN referred to page 2, line 12, and wanted to            
 know why the government had to redo the "government takings                   
 guidelines" every year.  He said this section would actually set              
 the guidelines for what is "unconstitutional takings."                        
                                                                               
 Number 220                                                                    
                                                                               
 REPRESENTATIVE VEZEY said there was only one way you could                    
 establish whether something was "unconstitutional" and that is to             
 take it to court and appeal it to the supreme court.  He stated               
 that the supreme court was the only body in the state with the                
 power to interpret the Constitution.  For those property owners               
 wishing to claim their property as "unconstitutionally taken" they            
 would have to go to court and be prepared to prevail or appeal a              
 decision all the way to the supreme court.                                    
                                                                               
 Number 234                                                                    
                                                                               
 MR. LYON said there is a large body of case law in the U.S. as well           
 as in the state of Alaska relating to regulatory takings.                     
                                                                               
 Number 237                                                                    
                                                                               
 REPRESENTATIVE VEZEY stated this bill wouldn't accomplish anything            
 not already in law because at the present moment, it is                       
 "unconstitutional" to deprive someone of his/her property rights              
 without following the provisions in the Constitution.                         
                                                                               
 Number 246                                                                    
                                                                               
 MR. LYON said there was a three-part guideline that discussed                 
 regulatory takings and determined land value loss.  He then                   
 introduced Mr. Steve Noey on teleconference.                                  
                                                                               
 Number 256                                                                    
                                                                               
 STEVE NOEY, real estate agent, said that the supreme court in 1994            
 ruled that as long as you have some economic use left of the                  
 property, it was a regulatory taking.  He stated this differs from            
 a constitutional taking where if they take one quarter of your                
 property and (indisc.) you of one dollar of value, you have                   
 compensation coming.  The court ruling in 1994 basically says they            
 can take all of the value except your ability to pitch a tent on it           
 and you are not compensated.  Mr. Noey stated that he was in favor            
 of this law if it defines the fact that if you lose $1 in value of            
 your property then you have the ability to seek compensation.                 
                                                                               
 Number 274                                                                    
                                                                               
 REPRESENTATIVE VEZEY asked Mr. Noey if he could summarize the U.S.            
 Supreme Court ruling in 1994 regarding a case in South Carolina.              
                                                                               
 Number 279                                                                    
                                                                               
 MR. NOEY said he was talking about the rulings within the state of            
 Alaska.  The DEC and CDEC vs. Noey wherein the State Supreme Court            
 stated on a regulatory taking that as long as some economic use               
 remains in the property, it wasn't a taking.  The State                       
 Constitution and the U.S. Constitution say that if you lose $1 of             
 value of the property or if you lose any of your property                     
 physically, then you are due just compensation.                               
                                                                               
 Number 295                                                                    
                                                                               
 REPRESENTATIVE VEZEY said the Constitution says only what the                 
 supreme court states it says and the Alaska Legislature can't pass            
 a law that would change the supreme court ruling.                             
                                                                               
 Number 302                                                                    
                                                                               
 MR. NOEY said the state decisions differ from the decision they               
 took from the U.S. Supreme Court.  The U.S. Supreme Court decision            
 on the same kind of regulatory taking stated that any intended use            
 with the defect of taking, if you had loss of the intended use of             
 the property, then you have defect of taking and compensation is              
 due.  The state made it more restrictive and said that as long as             
 you had any economic use, there was no taking.                                
                                                                               
 Number 318                                                                    
                                                                               
 REPRESENTATIVE VEZEY was curious as to how constitutional and                 
 nonconstitutional could be established by statute.                            
                                                                               
 Number 326                                                                    
                                                                               
 MR. NOEY said the Fifth Amendment to the Constitution provides for            
 just compensation.  He stated this proposed law was to try to bring           
 into performance, regulations that the Constitution stated back in            
 1776 and just say that regulatory takings are a fact and don't have           
 to be a physical invasion.                                                    
                                                                               
 Number 339                                                                    
                                                                               
 REPRESENTATIVE VEZEY thanked Mr. Noey for his explanations.  He               
 questioned the intent of the bill and proposed statute.                       
                                                                               
 Number 345                                                                    
                                                                               
 CO-CHAIR IVAN recognized Sara Hannon from the Alaska Environmental            
 Lobby and invited her to give her testimony.                                  
                                                                               
 Number 349                                                                    
                                                                               
 SARA HANNON, lobbyist for the Alaska Environmental Lobby, Inc.,               
 stated that she agreed with Representative Vezey.  She said the               
 Constitution sets out some very basic parameters about what the               
 government can and can't do to individual citizens.  One of the               
 things framed out in the Constitution, is that there is a judicial            
 process to remedy a situation whether a person or a law is                    
 violated.  The Alaska Environmental Lobby advocates that undue                
 state regulation should be done away with.  They are seeking                  
 efficiency of government purposes.  She believed this bill is a               
 facade to do something much further reaching.  The regulations that           
 impact our property rights the closest were zoning regulations.               
 The ramifications for a bill that ask to amend the Constitution,              
 Ms. Hannon believed needed to be seriously reviewed.   She stated             
 that she's opposed to HB 154 in its form and she didn't believe               
 there was a justification for it.  She did say that there were                
 individual Alaskans who the judicial process has not served to                
 remedy.  She stated there needed to be the specific individual                
 cases.  She said that lawyers made millions of dollars arguing                
 these cases and if the judicial process needed to be changed to               
 give citizens a handle on being able to ask for other kinds of                
 remedy, then change it.  She believed the statutory changes were              
 misleading.  She said this bill was bad legislation and a bad                 
 statute and she hoped the committee would not give it serious                 
 consideration.                                                                
                                                                               
 Number 411                                                                    
                                                                               
 CO-CHAIR IVAN recognized the attendance by Representatives Elton              
 and Mackie and HB 80 bill sponsor, Representative Jeannette James.            
 He invited questions or comments from the committee members.                  
                                                                               
 REPRESENTATIVE KOTT asked whether or not there was anyone from the            
 Department of Law to testify regarding HB 154.                                
                                                                               
 CO-CHAIR IVAN answered there wasn't anyone to testify and he wanted           
 to hold the bill over and give Representative Vezey's questions an            
 opportunity to be addressed by a Legal Services consultant.                   
                                                                               
 Number 430                                                                    
                                                                               
 REPRESENTATIVE VEZEY stated that he did have a number of questions            
 due to his interest in this topic.  He left the option open to the            
 chairman in terms of what Co-Chair Ivan wanted to do with the bill,           
 whether to pass it out to the Judiciary Committee, or to keep it              
 further discussion.                                                           
                                                                               
 Number 434                                                                    
                                                                               
 CO-CHAIR IVAN said that he wished to keep the bill in the committee           
 and work on it to ensure every concern is addressed.                          
                                                                               
 HCRA - 02/21/95                                                               
 HB 80 - DNR APPROVAL OF PLATS IN UNORG BOROUGH                              
                                                                               
 CO-CHAIR IVAN invited Representative James to come forward and                
 readdress HB 80.  He also recognized those on teleconference                  
 waiting to testify on the bill.  He also pointed out a letter from            
 the Department of Natural Resources (DNR) addressing technical                
 changes they wished to see made in HB 80.  Co-Chair Ivan asked that           
 proposed amendments be submitted at least 24 hours prior to a                 
 committee meeting.                                                            
                                                                               
 Number 459                                                                  
                                                                               
 REPRESENTATIVE JEANNETTE JAMES, Sponsor of HB 80, stated the                  
 purpose of this bill was brought to her attention because of a plat           
 in her district that didn't fall under a platting authority.  She             
 found that the Department of Natural Resources (DNR) was the filing           
 place for plats, but DNR had no authority to review the plats.  She           
 said she has worked with surveyors and the DNR to pull the bill               
 together and bring it back in the form worked on during the                   
 Seventeenth Legislature, SB 81.  Representative James did a                   
 comparison between SB 81 and HB 80 and drafted another copy to                
 incorporate everything that had previously been agreed upon by all            
 the parties involved.  Representative James wanted Pat Kalen and              
 Ron Swanson to explain how their needs had been met with this bill.           
                                                                               
 Number 487                                                                    
                                                                               
 REPRESENTATIVE IRENE NICHOLIA wanted to know whether the changes              
 mentioned by Rick Elliot in the last committee meeting were the               
 same as Ron Swanson's.                                                      
                                                                               
 Number 491                                                                    
                                                                               
 RICK ELLIOT, Municipal Lands Trustee, Department of Community and             
 Regional Affairs, stated he had not seen the changes and could not            
 offer an answer.                                                              
                                                                               
 Number 493                                                                    
                                                                               
 CO-CHAIR IVAN again stated that proposed changes should be offered            
 to the committee with enough lead time for the committee members to           
 have a chance to look them over before a committee meeting.                   
                                                                               
 Number 500                                                                    
                                                                               
 REPRESENTATIVE JAMES said the changes in the bill were directly               
 related from a request by the surveyors in Fairbanks.  She stated             
 they tried to incorporate Rick Elliot's concerns into the bill as             
 well as to ensure the agreement of everyone.                                  
                                                                               
 Number 508                                                                    
                                                                               
 MR. ELLIOT mentioned that he didn't have a copy of the new                    
 amendment, but he was familiar with SB 81.                                    
                                                                               
 Number 514                                                                    
                                                                               
 PAT KALEN, Surveyor, American Congress on Surveying and Mapping,              
 said he had a copy of the committee substitute but he wasn't sure             
 what the other amendments were.                                               
                                                                               
 Number 516                                                                    
                                                                               
 REPRESENTATIVE JAMES pointed out that the amendments delete the               
 right of way concerns for the Department of Transportation (DOT).             
 She said that DOT had an exemption on these before, but the                   
 proposed amendments would change that to make the exemptions                  
 specific to airports.                                                         
                                                                               
 MR. KALEN confirmed that his concerns would still be addressed.               
                                                                               
 Number 522                                                                    
                                                                               
 RON SWANSON, Director, Division of Land, Department of Natural                
 Resources, stated he only had a committee substitute.                         
                                                                               
 Number 524                                                                    
                                                                               
 REPRESENTATIVE JERRY MACKIE expressed his concerns over the                   
 digression from the main topic.  He referred to the letter from Ron           
 Swanson and stated that they are all in agreement that the changes            
 were quite technical and could be included in the new committee               
 substitute.  He moved that the technical changes offered by Ron               
 Swanson be included in the committee substitute.                              
                                                                               
 CO-CHAIR IVAN appreciated the comments and recommendations.                   
                                                                               
 Number 546                                                                    
                                                                               
 REPRESENTATIVE VEZEY asked if the new committee substitute had been           
 adopted.                                                                      
                                                                               
 Number 549                                                                    
                                                                               
 REPRESENTATIVE KOTT moved to adopt the committee substitute for the           
 purpose of the discussion.                                                    
                                                                               
 Number 552                                                                    
                                                                               
 REPRESENTATIVE MACKIE stated that he already had a motion on the              
 floor requesting that the technical changes be included in the                
 committee substitute before the committee substitute be adopted by            
 the committee.                                                                
                                                                               
 Number 553                                                                    
                                                                               
 CO-CHAIR AUSTERMAN felt that Representative Mackie's motion                   
 couldn't be acted upon until the committee substitute was adopted             
 by the committee.                                                             
                                                                               
 Number 555                                                                    
                                                                               
 REPRESENTATIVE MACKIE stated there were two ways it could be done.            
 It could be included into the committee substitute which becomes a            
 part of the working document and then move the committee substitute           
 before the committee.                                                         
                                                                               
 Number 557                                                                    
                                                                               
 CO-CHAIR IVAN accepted the motion put forth by Representative Kott            
 to adopt the committee substitute.                                            
                                                                               
 Number 559                                                                    
                                                                               
 REPRESENTATIVE MACKIE again moved that Ron Swanson's technical                
 changes be included in the committee substitute.                              
                                                                               
 Number 564                                                                    
                                                                               
 REPRESENTATIVE KOTT objected for the purposes of clarification.  He           
 pointed out there were two recommended changes, the first dealing             
 with section 40, and the second dealing with the definition of                
 subdivision.  He stated that if only part of the letter was going             
 to be adopted, then it needed to be clarified.                                
                                                                               
 Number 571                                                                    
                                                                               
 REPRESENTATIVE JAMES stated from her perspective concerning Ron               
 Swanson's amendments, he had two changes with a preference for the            
 second change.  She said his changes should be made into two                  
 amendments.                                                                   
                                                                               
 Number 576                                                                    
                                                                               
 REPRESENTATIVE MACKIE moved to divide the question with a motion to           
 adopt the first portion.                                                      
                                                                               
 Number 579                                                                    
                                                                               
 CO-CHAIR IVAN heard no objection, so it was so ordered.                       
                                                                               
 Number 581                                                                    
                                                                               
 REPRESENTATIVE JAMES detailed the options in the second portion of            
 the amendments.                                                               
                                                                               
 Number 587                                                                    
                                                                               
 REPRESENTATIVE VEZEY asked Representative James if she was                    
 endorsing the proposed amendments from Ron Swanson.  She replied              
 that she was.                                                                 
                                                                               
 Number 590                                                                    
                                                                               
 REPRESENTATIVE MACKIE asked Ron Swanson to explain the difference             
 between the two options he'd put forth.                                       
                                                                               
 Number 593                                                                    
                                                                               
 MR. SWANSON said he had provided two options because he had been              
 presented with two options and he hadn't the time to take it to               
 Legal to ask which option was the better one.  His main concern               
 here was that within an airport, any alignments of the runway or              
 roads as it is leased would not be subject to review by the DNR.              
 The external boundary was one of the major concerns.  He felt both            
 suggestions were operable, but again he stated his lack of time to            
 go over them thoroughly to discern the best one.                              
                                                                               
 Number 602                                                                    
                                                                               
 REPRESENTATIVE VEZEY asked Mr. Swanson why he was advocating a lot            
 of detail in the statute.                                                     
                                                                               
 Number 607                                                                    
                                                                               
 MR. SWANSON felt it wasn't that much detail, but information                  
 explaining both options.  He talked about the size of corner                  
 alignment dependent upon the subdivision.                                     
                                                                               
 Number 615                                                                    
                                                                               
 REPRESENTATIVE MACKIE stated that he'd pick the second option                 
 because of its clarity not due to deletion but to a stipulator                
 addition.  He felt the underlined part added to the sentence would            
 solve dedicated right of ways.  Representative Mackie moved that              
 the committee accept the language in the second option.                       
                                                                               
 Number 622                                                                    
                                                                               
 REPRESENTATIVE VEZEY objected just for the purpose of getting a               
 clearer explanation from the bill sponsor.                                    
                                                                               
 Number 624                                                                    
                                                                               
 REPRESENTATIVE JAMES pointed out two things she hoped would be                
 accomplished by HB 80.  She stated previous problems included                 
 exempting various things.  Upon the creation of right of ways, DOT            
 wants to locate toward the center of the road.  The first part                
 would state that DOT would not be exempt from this any longer.  The           
 second stated that providing the right of way boundaries had not              
 previously been dedicated to the public.  A "subdivision" would be            
 a right of way not previously dedicated to the public and wouldn't            
 be dedicated to the public.                                                 
                                                                               
 MR. KALEN wanted a fax copy of the proposed definition.                       
                                                                               
 MR. SWANSON said he would fax the copy to Mr. Kalen.                          
                                                                               
 Number 645                                                                    
                                                                               
 REPRESENTATIVE JAMES stated it was in the bill once, and an                   
 exemption was requested, but now it is being added back in.                   
                                                                               
 CO-CHAIR IVAN invited Pat Kalen to proceed with his comments.                 
                                                                               
 Number 651                                                                    
                                                                               
 MR. KALEN had two comments.  He was satisfied with the majority of            
 the committee substitute.  He said it retained, to a large extent,            
 the wording of SB 81.  The problems with it on his end were over              
 the exemptions.  He stated there were little land transactions                
 within the state that were in any unorganized boroughs.  He                   
 wondered why the exemptions would need to be met in an unorganized            
 borough.                                                                      
                                                                               
 MR. KALEN stated his organization was one that worked with various            
 state agencies to develop this legislation.  He said he was                   
 speaking on behalf of the surveying society.                                  
                                                                               
 Number 679                                                                    
                                                                               
 REPRESENTATIVE MACKIE clarified that Mr. Kalen was in favor of the            
 committee substitute.                                                         
                                                                               
 Number 680                                                                    
                                                                               
 MR. KALEN stated that for the most part, he and his staff were in             
 favor of the committee substitute.  His reservations revolve                  
 primarily around the definition of the word "subdivision."  He said           
 that in the past, the word was clearly defined based on a                     
 definition offered by Senator Leman.  He stated that surveyors had            
 originally stopped SB 81 over the confusion of the word                       
 "subdivision" and who it applied to.  He stated he didn't have any            
 exceptions or exemptions for anyone in his definition.                        
                                                                               
 TAPE 95-3, SIDE B                                                             
 Number 000                                                                    
                                                                               
 REPRESENTATIVE MACKIE asked the members to look at the option he              
 moved.  He said the option just added into the definition of things           
 not included.  He stated one thing not included was right of way              
 boundaries already dedicated.                                                 
                                                                               
 Number 016                                                                    
                                                                               
 REPRESENTATIVE JAMES believed that this option stated right of ways           
 can be adjusted as long as they weren't dedicated to the public,              
 and upon the dedication to the public, it becomes a subdivision.              
                                                                               
 Number 040                                                                    
                                                                               
 REPRESENTATIVE VEZEY mentioned his concern over the amendment.  His           
 understanding of the definition  of "subdivision" and the committee           
 substitute, extended his belief that it didn't include right of way           
 boundaries.                                                                   
                                                                               
 Number 050                                                                    
                                                                               
 REPRESENTATIVE JAMES answered that subdivision had nothing to with            
 right of ways.  A "subdivision" was if you put in a right of way              
 and you plat it for public purpose, then it was a "subdivision."              
 If you move a right of way that has previously been moved, then it            
 still was a subdivision.  The only time it wasn't, upon moving a              
 right of way, was if it had never been dedicated to the public.               
                                                                               
 Number 060                                                                    
                                                                               
 REPRESENTATIVE VEZEY stated he didn't quite follow.                           
                                                                               
 REPRESENTATIVE JAMES said that if you divided a piece of land into            
 two parts, it would be a subdivision, not including cadastral                 
 plats, control plats, open to entry plats, and parcel plats.  She             
 stated this was providing the right of way boundaries that hadn't             
 been previously dedicated to the public.  Upon the adjustment of a            
 right of way that had been dedicated as a plat and was then moved,            
 it was a subdivision again.  Historically, when DOT has changed               
 right of ways and taken the monuments from the land or even changed           
 the land one way or another, they pay for taken land and take out             
 their monuments.  They then indicated that you had to find your               
 corners by going to the center of the roadway.  Those owners then             
 had to undergo surveying because it was a requirement and they were           
 not exempt from doing that.                                                   
                                                                               
 Number 102                                                                    
                                                                               
 REPRESENTATIVE MACKIE stated that Representative Vezey brought up             
 a good point.  He agreed with the sponsor, but his problem with it            
 was that the actual language may be a bit confusing.  He stated it            
 still accomplished its intention.                                             
                                                                               
 Number 109                                                                    
                                                                               
 MR. KALEN explained his letter which added language to the                    
 definition of "subdivision."  He stated that leases were already              
 dealt with in section 40, 50 and 60.  He said this bill was headed            
 in the right track, but he stated the wording should be simple.               
                                                                               
 Number 135                                                                    
                                                                               
 CO-CHAIR IVAN stated his appreciation of Mr. Kalen's comments.  He            
 asked Representative James what her recommendations would be.                 
                                                                               
 Number 139                                                                    
                                                                               
 REPRESENTATIVE JAMES said the right of way boundaries issue would             
 not be deleted and anything creating or adjusting right of way                
 boundaries was a "subdivision" with the exception of an airport,              
 because it was already exempted.  She said this referred to the               
 replat of a subdivision and a replat won't be excluded.  She said             
 that deleting "or creating or adjusting right of way boundaries"              
 would be the better way to go.  Its absence would indicate that it            
 was a "subdivision."  Her intent was not to give DOT an exemption             
 for creating or adjusting right of way boundaries and to have them            
 include it in the description of a subdivision.                               
                                                                               
 MR. KALEN commented on ways to redefine this definition.                      
                                                                               
 REPRESENTATIVE MACKIE asked that testifiers request permission from           
 the chairman for recognition before commenting.                               
                                                                               
 Number 179                                                                    
                                                                               
 CO-CHAIR IVAN appreciated the remarks made by Representative                  
 Mackie.  He then asked Representative James what could be                     
 accomplished.                                                                 
                                                                               
 Number 181                                                                    
                                                                               
 REPRESENTATIVE JAMES said there was a motion on the floor to accept           
 the second option.  She preferred this option be the first option             
 by deleting certain wording, "or creating or adjusting right-of-way           
 boundaries."  She then stated she would be happy with the bill with           
 these changes.                                                                
                                                                               
 Number 195                                                                    
                                                                               
 REPRESENTATIVE VEZEY clarified that the original motion was to                
 adopt the second option, but now the motion was to adopt the first            
 option.                                                                       
                                                                               
 Number 200                                                                    
                                                                               
 CO-CHAIR IVAN heard no objections and it was so ordered to adopt              
 the first option.  He again invited questions and comments from               
 committee members and other testifiers.  He pointed out that he               
 would appreciate testifiers request permission to speak rather than           
 interrupting when they wished to say something.  He then asked the            
 desire of the committee concerning HB 80.                                     
                                                                               
 Number 218                                                                    
                                                                               
 REPRESENTATIVE KOTT moved that the committee substitute for HB 80             
 with the new amendments and with its fiscal notes be moved out of             
 the committee.                                                                
                                                                               
 Number 228                                                                    
                                                                               
 CO-CHAIR IVAN heard no objection, and CSHB 80 was moved out of the            
 CRA Committee with individual recommendations.                                
 HCRA - 02/21/95                                                               
 OVERVIEW:  DIVISION OF ENERGY                                               
                                                                               
 CO-CHAIR IVAN then invited the members from the Division of Energy            
 (DOE) to come forward to give their overview.  He first recognized            
 Percy Frisby.                                                                 
                                                                               
 Number 243                                                                    
                                                                               
 PERCY FRISBY, Director, Division of Energy, first introduced the              
 staff that he'd brought with him.  He wanted Eric Marchegiani to              
 come forward to give his presentation on the various programs                 
 within the division.                                                          
                                                                               
 Number 264                                                                    
                                                                               
 ERIC MARCHEGIANI, Manager/Engineering, Division of Energy,                    
 Department of Community and Regional Affairs, started with                    
 Operation Technical Emergency Assistance (OTE).  OTE provides rural           
 technical assistance to communities in the form of engineering                
 which provided bulk fuel and help with the power systems.  He said            
 training was also provided through OTE as well as meter                       
 installation, data inquisition and emergency prevention.                      
                                                                               
 MR. MARCHEGIANI said another program he discussed was the                     
 Electrical Systems Life, Health and Safety Improvements where                 
 emergency concerns were taken care of immediately.                            
                                                                               
 MR. MARCHEGIANI discussed the Business Management Development                 
 program which provides assistance to a community's management of              
 utilities.  Its work with private enterprise was encouraged.                  
                                                                               
 MR. MARCHEGIANI also pointed out their Rural Power Systems Upgrade            
 Program which provided assistance to a community that needed to               
 upgrade their distribution system, their switch gear, or their                
 generators.  In some cases, the community had just grown in size.             
 This program works with the community to provide the necessary                
 upgrades.                                                                     
                                                                               
 MR. MARCHEGIANI talked about their Bulk Fuel System Spill                     
 Prevention Program which dealt with piping systems and correcting             
 them from the fill point to the tank farm.  The Coast Guard has               
 worked well with this program to ensure that fuel does get to the             
 remote villages.                                                              
                                                                               
 MR. MARCHEGIANI discussed the Electric Service and Extension Fund             
 which has ongoing projects expected to be finished this year.                 
 There was no funding for this last year.                                      
                                                                               
 MR. MARCHEGIANI then brought up the Circuit Rider Emergency                   
 Response Service which was also a maintenance system.  This program           
 has three contractors that visit approximately 68 villages on a               
 quarterly basis.  They provide training and help provide quick help           
 to get a community's power back on line.  According to the village            
 service agreement, the village was responsible for the parts in               
 order for the work to be accomplished.  If this was not possible,             
 then an arrangement would be made to try to find funding for that             
 rural community.  This was because this program was geared to help            
 the village get trained and do the work in the event of a power               
 outage and unavailability of contractors.  He then welcomed                   
 questions or comments.                                                        
                                                                               
 Number 346                                                                    
                                                                               
 CO-CHAIR AUSTERMAN asked about the other programs on a contract               
 basis.                                                                        
                                                                               
 Number 349                                                                    
                                                                               
 MR. MARCHEGIANI answered that they do contract for other programs,            
 but a lot was put out to bid with distribution systems, generators            
 and services.                                                                 
                                                                               
 Number 354                                                                    
                                                                               
 CO-CHAIR AUSTERMAN wanted to know how many of the generation plants           
 were owned by the district or by the state.  He was also interested           
 in how the replacement system worked.                                         
                                                                               
 Number 359                                                                    
                                                                               
 MR. MARCHEGIANI said that whenever work was done in a village, the            
 state didn't own the power system.  A grant was usually given to              
 the village with the idea that the village owned their own power              
 plant.  Whatever the utility used, the division worked alongside              
 the village that signed a grant agreement to do contracting work              
 and it all depended upon the certain village situation.                       
                                                                               
 CO-CHAIR AUSTERMAN asked a question regarding power line systems.             
                                                                               
 MR. MARCHEGIANI replied that he was only aware of two lines owned             
 by the state.  He said the community owned their own lines and                
 distribution systems or their own power plants.  He stated that all           
 the programs that installed power plants or distribution systems              
 were grant programs.                                                          
                                                                               
 Number 383                                                                    
                                                                               
 CO-CHAIR AUSTERMAN referred to a statement concerning the main                
 problem with bulk fuel tank areas were the feedlines.  He asked               
 whether or not a little bit of maintenance could solve this                   
 problem.                                                                      
                                                                               
 Number 387                                                                    
                                                                               
 MR. FRISBY answered that at the moment, they were complying with              
 the Coast Guard mandate, trying to get delivery systems from the              
 barge to the tank which he referred to as a "band-aid approach."              
 He said they were looking at about $200 million to fix all rural              
 bulk fuel problems.                                                           
                                                                               
 Number 398                                                                    
                                                                               
 CO-CHAIR AUSTERMAN asked if this was due to the amount of money               
 needed to fix up the rural fuel problems.  He also wanted to know             
 if the division had been researching any possibilities of the                 
 private sector being involved in helping to solve the fuel                    
 problems.                                                                     
                                                                               
 Number 401                                                                    
                                                                               
 MR. FRISBY acknowledged that they were presently working with three           
 different private entities to work out an agreement where they go             
 into partnerships with the owners of the bulk fuel system.  The               
 only way to correct the problem was to get the private sector                 
 involved with it.  Without the private enterprise or a big influx             
 of money, the problem wouldn't be corrected.                                  
                                                                               
 Number 410                                                                    
                                                                               
 CO-CHAIR IVAN commented that one of his communities had been                  
 looking at the private public sector approach to resolve these                
 problems.  He'd also been talking to village fuel owners such as              
 village corporations, municipal governments and school districts.             
 He said that village corporations were ready to invest in improving           
 and purchasing safe fuel containers, however technical assistance             
 from the division was needed to further this motivation.                      
                                                                               
 Number 435                                                                    
                                                                               
 MR. FRISBY invited Gloria Manni to address the committee.  He said            
 she was in charge of all the loan programs throughout the state.              
                                                                               
 Number 438                                                                    
                                                                               
 GLORIA MANNI, Administration Manager, Division of Energy, DCRA,               
 began with discussing the Bulk Fuel Revolving Loan Fund.  This was            
 popular since it was available to communities with a population of            
 less than two thousand.  She said loans could be made up to                   
 $100,000 for the purchase of bulk fuel.  This could occur once or             
 twice during a year.  This loan fund could provide up to 90 percent           
 of the value of the purchase of the fuel.  All the loans needed to            
 be paid within nine months, so that upon the first repayment, the             
 community could then get another loan for the following year.  The            
 interest rate ranged from 0 percent for the first time borrower to            
 5 percent for the second time borrower, and 7 percent for every               
 loan thereafter.  In some cases, the division would waive the                 
 interest to permit the repayment of the loan.  The village                    
 borrowers usually got this loan for heating purposes but sometimes            
 they got it for electrical generation.                                        
                                                                               
 MS. MANNI described another loan program, the Rural Typification              
 Revolving Loan Fund, which allowed communities to borrow from this            
 fund at a rate of 2 percent interest to extend services to areas              
 previously being served by the state.  She said they must have at             
 least three new hookups every time.  This program has proven itself           
 to be burdensome to both sides, the division and the borrowers, in            
 such a way that legislators last year requested that the money be             
 reappropriated within the fund and be used to help with bulk fuel             
 repairs.                                                                      
                                                                               
 MS. MANNI described another program which was the Power Project               
 Fund Loan, under which a variety of projects could be funded,                 
 mostly for electrical generation.  It was a very valuable program             
 with an interest rate ranging from 0-7 percent in order to ensure             
 that the project was financially feasible.  The DOE has about $22             
 million in receivable notes from this loan fund, but the loans were           
 made in the early 80s.                                                        
                                                                               
 Number 483                                                                    
                                                                               
 CO-CHAIR AUSTERMAN questioned the tracking record of the loan                 
 programs.  He wanted to know what kind of default rate there was.             
                                                                               
 Number 486                                                                    
                                                                               
 MS. MANNI replied that some borrowers were late and this was the              
 normal part of doing business.  The overall tracking record was               
 good because the loan fund dealt with utilities, so if anyone fell            
 behind, they worked with the utility management to come up with               
 methods to get the money to pay back the state.  To date, no loans            
 have been written off, and for some communities, legislation has              
 been passed to turn the loan into a grant.  From the division's               
 point of view, Ms. Manni said these programs were doing very well.            
 She said the division was able to collect all the loans by                    
 developing a training process to teach communities how to collect             
 and pay back loans.                                                           
                                                                               
 Number 504                                                                    
                                                                               
 CO-CHAIR AUSTERMAN commented on his desire to go more toward the              
 private sector in a number of issues that the state deals with.  He           
 would like to see, at some point, the problems solved in the bush             
 with the private sector going in and providing fuel and by carrying           
 the loans on their own and therefore, get into a position where               
 they could provide the fuel tanks and fuel.  He said if all these             
 things were tied together as joint deals, the private sector would            
 be able to cover the responsibilities the state currently                     
 undertakes.                                                                   
                                                                               
 Number 516                                                                    
                                                                               
 MS. MANNI responded that under the Power Project Fund Loan and the            
 Bulk Fuel Revolving Loan Fund, the private sector can borrow as               
 long as they have the sponsorship of the community.  A private                
 investor was eligible to come and borrow money for a community                
 project for the benefit of that community.                                    
                                                                               
 Number 522                                                                    
                                                                               
 CO-CHAIR AUSTERMAN stated that he wanted to get the state out of              
 the loaning business and let the private sector take over the whole           
 process.  He said at some point in time, the state and rural                  
 communities could end up in this situation if they are allowed to             
 move forward and do away with the present mentality of dependence             
 upon state government to handle all problems.                                 
                                                                               
 Number 529                                                                    
                                                                               
 REPRESENTATIVE NICHOLIA stated that Co-Chair Austerman should get             
 into private business.                                                        
                                                                               
 Number 532                                                                    
                                                                               
 CO-CHAIR IVAN said he could see communities phasing away from the             
 government but not totally breaking away from it.  He also                    
 encouraged private lending institutions to come in.                           
                                                                               
 Number 536                                                                    
                                                                               
 CO-CHAIR AUSTERMAN stated there would always be areas in which the            
 government would need to be there to help.  He said there were a              
 lot of instances where the private sector couldn't help, but they             
 could take over many responsibilities.                                        
                                                                               
 Number 540                                                                    
                                                                               
 CO-CHAIR IVAN recognized the attendance of Representative Con                 
 Bunde.                                                                        
                                                                               
 Number 542                                                                    
                                                                               
 MR. FRISBY elaborated more on the remarks made by Co-Chair                    
 Austerman.  His goal is to "put themselves out of business,"                  
 especially concerning the bulk fuel systems.  The division had                
 approximately $2.7 million to work with bulk fuel upgrades in the             
 rural communities.  He said that the division needed approximately            
 $200 million to solve all the current problems.  He also agreed               
 that the private sector needed to get more involved in order to               
 help overcome this financial disability.  He said that an                     
 educational system needed to be established for the rural                     
 communities and private enterprise with the goal of looking at the            
 best way to move into the communities.  It would be a big learning            
 curve for all involved before results could be seen.                          
                                                                               
 Number 557                                                                    
                                                                               
 MS. MANNI said a new fund was established by the legislature in               
 1993 called the Southeast Energy fund.  This fund received an                 
 allocation every year from the Four Dam Pool Transfer Fund and it             
 could only be used for grants to be given to a utility                        
 participating in transmissions.  She then discussed the Power Cost            
 Equalization Fund which covered two programs.  The first, the Power           
 Cost Equalization (PCE) Program, helped electrical customers of               
 rural utilities to become eligible for PCE.  This fund would help             
 to pay some of the electrical bills in the rural communities.  In             
 1993, this was changed so that residential customers and schools              
 and some private enterprises were the only ones eligible for this.            
 The limit was up to 700 kilowatt hours and big consumers were                 
 responsible for paying for the rest of their electrical use.                  
 Grants were issued from the Rural Typification Revolving Fund                 
 during the annual reappropriation process.                                    
                                                                               
 Number 583                                                                    
                                                                               
 CO-CHAIR AUSTERMAN asked how much money goes through the Four Dam             
 Pool Fund and how much is appropriated to the Southeast Energy                
 Fund.                                                                         
                                                                               
 Number 586                                                                    
                                                                               
 MS. MANNI responded that the 1996 planned budget for the Four Dam             
 Pool is around $10.3 million.  Out of that, 40 percent goes to the            
 Southeast Energy Fund and about 40 percent to the Power Cost                  
 Equalization Fund and about 20 percent to the Power Project Fund.             
                                                                               
 Number 592                                                                    
                                                                               
 CO-CHAIR IVAN asked if the division had a policy to deal with                 
 communities during the winter that were low on fuel.                          
                                                                               
 Number 599                                                                    
                                                                               
 MR. FRISBY responded that the community needs to notify the                   
 division and then the community and the division work out a                   
 solution to get the fuel to the communities.  He said the division            
 made sure the fuel was restocked and paid for in full, and in some            
 cases, the division allowed an extension as long as the debt didn't           
 exceed $100,000.  He stated they were familiar with dealing with              
 communities and their fuel shortages.                                         
                                                                               
 Number 614                                                                    
                                                                               
 DICK EMERMAN, Senior Economist, Division of Energy, DCRA, said they           
 were also involved in various projects.  He noted that over the               
 past few years, they have managed the feasibility studies for                 
 projects like the Sutton-Glennallen Intertie.  They also do                   
 planning studies upon the request of legislators, utilities or                
 communities.  The division is about to bring in a contractor to               
 review the most promising rural transmission projects and to                  
 identify and define their costs and possible finance situations.              
 Mr. Emerman stated they were also involved in demonstration                   
 projects on alternative energy, the biggest being in Kotzebue,                
 where they were funding a wind demonstration project.  Last, he               
 mentioned bulk fuel storage and the vast amount of money needed to            
 correct the current problems.  The division staff has just started            
 an effort to get out to communities to work with them to define, in           
 the absence of state grants, what long term solutions would be                
 appropriate for the community.                                                
                                                                               
 Number 679                                                                    
                                                                               
 CO-CHAIR IVAN recognized Representative Con Bunde and Frank                   
 Bettine, President of Alaska Cogeneration Systems.                            
                                                                               
 Number 686                                                                    
                                                                               
 REPRESENTATIVE CON BUNDE introduced two of his constituents, Frank            
 and Genivee Bettine.  He said they had a proposal that might                  
 address some of the serious problems concerning the cost of                   
 electrical energy in rural Alaska.                                            
                                                                               
 TAPE 95-4, SIDE A                                                             
 Number 000                                                                    
                                                                               
 FRANK BETTINE, President, Alaska Cogenerations Systems (ASCI), said           
 his company was formed in 1993 for the purpose of developing coal             
 fired and cogeneration plants throughout Alaska as an energy                  
 efficient and environmentally superior alternative to diesel                  
 generation by electric utilities.  His proposal recommended the use           
 of coal fired generation plants in rural Alaska to replace diesel             
 generation and use the waste heat captured off the combustion cycle           
 to displace millions of gallons of fuel oil that were now being               
 used for space heating purposes throughout the community.  This was           
 possible because Alaska Cogeneration Systems was in the process of            
 reactivating and reopening the Evan Jones Coal Mine, home of the              
 highest quality coal in Alaska.                                               
                                                                               
 MR. BETTINE listed the four principals that made up Alaska                    
 Cogeneration Systems.  The first being himself, a professional                
 electrical engineer, with extensive Alaska utility experience, as             
 well as an attorney at law.  The next person he mentioned was                 
 William Steigers, Ph.D., an environmental permitting specialist.              
 The third was Michael Oswald, mechanical engineer who worked as               
 vice-president for Energy Products of Idaho.  He was instrumental             
 in developing the fluid ice bid combustion technology for clean               
 coal burning fuel.  The last principal for ACSI was Austin Hobbs,             
 another electrical engineer, and also had a sublease for the Evan             
 Jones Coal Mine.                                                              
                                                                               
 MR. BETTINE then disclosed his reasons for being before the                   
 committee.  His group had been proposing since 1993, to construct             
 a coal fired cogeneration project to supply the energy needed to              
 run a hydroelectric plant.  DCRA had been notified several times              
 that ACSI had intended to construct this project to provide Copper            
 Valley's load, but the DCRA was opposed to this project.                      
                                                                               
 MR. BETTINE stated their project for Valdez represented a fully               
 integrated resource option.  Their proposal was to mine coal at               
 Evan Jones Coal Mine in Valdez that would provide all the electric            
 energy for Copper Valley.  The waste heat captured from this plant            
 would instill a need to create a district waste heat system in                
 Valdez, in which the captured waste heat would displace between 2-3           
 million gallons of fuel used for space heating purposes.  The total           
 amount of displaced fuel would be about 6 millions gallons on an              
 annual basis.  This would create an extremely high thermal                    
 efficiency.                                                                   
                                                                               
 MR. BETTINE stated another aspect of their project would be to haul           
 the coal to Valdez in containerized vans.  These vans would then be           
 able to back haul solid waste from the surrounding areas of Valdez            
 after they dropped off their coal load and a proposed land fill               
 site would be the strippets from the Evan Jones Coal Mine.  ACSI              
 has met with the DCRA and various other organizations that would              
 control this and they felt this would be a great idea.  This would            
 not only apply to this community but through all coastal                      
 communities in Alaska.                                                        
                                                                               
 MR. BETTINE said the advantages of coal fired cogeneration would be           
 to allow the burning of about 25 percent of the solid waste right             
 on site as a supplemental fuel to the coal, reducing the amount of            
 coal necessary to be hauled from the mine.  This mine would also              
 create a centralized landfill for small communities throughout                
 Alaska.                                                                       
                                                                               
 MR. BETTINE said the Evan Jones Coal Mine supplied all of Alaska's            
 coal up until about 1960 when it was shut down due to the                     
 availability of natural gas.  The economic situation is such now              
 that it looks promising to reactivate the coal mine.  He stated               
 that the proven reserves of the Evan Jones Coal Mine is around 30             
 million tons of recoverable coal which is enough to supply 300 tons           
 per year for many years to come.                                              
                                                                               
 MR. BETTINE identified several people who would like to purchase              
 waste heat, including all the major businesses in Valdez such as              
 the school district, the community college, the Coast Guard, DOT              
 and even the city of Valdez itself.  The city of Valdez had very              
 unique ideas on how to use the excess heat to melt snow to keep the           
 street clear because the cost of the heat would be low.  They also            
 want to use the heat to construct another fishery on the west part            
 of town and the heat would allow them to build and support a                  
 hatchery to grow king salmon.                                                 
                                                                               
 MR. BETTINE stated that based on the parameters contained in the              
 Copper Valley Intertie feasibility study prepared by the DCRA, it's           
 economical to do this.  ACSI could make a reasonable profit and               
 charge a reasonable cost for their energy.  They would be selling             
 waste heat to selected large consumers, at about 85 percent of what           
 it would cost them to heat their buildings using fuel oil.  This              
 money then would go back in and offset rates to all Copper Valley             
 consumers who would all share in the cost of the waste heat.  ACSI            
 would be a great demonstration project to show that renewal of coal           
 fired cogeneration technology within the state is viable and it is            
 a good alternative to continue diesel generation.  He said that if            
 the shipped coal was spilled in the ocean, it is just an activated            
 charcoal filter, whereas if oil is spilled, it would create an even           
 bigger mess.  ACSI is offering Alaska's most abundant resource to             
 provide the energy needs of many of the coastal communities within            
 Alaska.                                                                       
                                                                               
 MR. BETTINE continued that a modern coal burning plant is not quite           
 the pollutant it once was and even rivaled a gas plant in                     
 cleanliness.  A coal plant burns 10 times cleaner than a diesel               
 generator would.  This was due to the fact that diesel generators             
 burn at a high temperature, emitting lots of toxins and                       
 particulates unable to be seen by the naked eye.  A modern coal               
 plant, however, burns at a lower temperature and emits about one-             
 tenth of that given off by a diesel generator.  They inject                   
 limestone to lower the sulfur dioxide emitted and put bag hoses               
 over the exhaust stream acting like a giant vacuum cleaner bag                
 capturing all the particulates.  He stated the only pollution given           
 off by a coal fired cogeneration plant was water vapor and carbon             
 dioxide.                                                                      
                                                                               
 MR. BETTINE listed several economic advantages for constructing the           
 Valdez cogeneration project.  First, he said you would have the               
 power generation capacity located at CVEA's major load center.                
 Approximately 70 percent of Copper Valley's load is in Valdez,                
 making it advisable to have the plant in Valdez.  Another advantage           
 is that it is the least cost option for supplying CVEA's power                
 requirements.  Installing a plant would also provide 12 long term             
 jobs in Valdez for plant operators.  ACSI would consider entering             
 a 20- to 30-year contract with Copper Valley Electric providing its           
 future requirements.  This plant would be providing Valdez                    
 consumers an estimated $5 million in additional savings due to the            
 purchase of waste heat.  He stated they would be reactivating the             
 Evan Jones Mine in the Valley creating 12 long term jobs and up to            
 30 mining jobs over a period of three to five years.                          
                                                                               
 MR. BETTINE went on to say previous legislators during 1994 stated            
 they wanted to replace diesel generation where possible with local            
 alternative solutions such as coal, and increase existing systems             
 efficiencies by using waste heat and also develop projects that               
 reduce or eliminate diesel generation in rural communities.                   
                                                                               
 MR. BETTINE commented that ACSI is trying to meet the requirements            
 of Alaska's energy strategy.  Private power developers in the lower           
 United States constructed 50 percent of all new generation put on             
 line last year.  ACSI is the first private power developer trying             
 to construct a major cogeneration facility within the state.  ACSI            
 has met with resistance from both the DCRA and the state itself.              
 In the lower United States, private power producers are sought                
 highly by utilities because they can produce cheap, reliable power            
 more so than utilities can.  A typical power producer would operate           
 his plant at two-thirds the manning of a utility, reducing the cost           
 of charges per kilowatt hour.                                                 
                                                                               
 MR. BETTINE stated that the Nineteenth Legislature was elected on             
 the platform that they would encourage private development and                
 curtail government interference with private industry.  He said he            
 was present to ask the government to give the private industry a              
 chance.  ACSI wants the government to stop subsidizing Alaska                 
 utilities at the expense of private power producers.  He                      
 specifically asked the legislature, when it comes to the Valdez               
 project, to rescind the legislation that authorized the Sutton-               
 Glennallen Intertie.  He asked that legislators not make available            
 the $35 million that was appropriated into the Power Project Loan             
 Fund, but to allow a private power producer to move forward to                
 supply that energy to Copper Valley Electric.  He expressed his               
 interest at being eligible to receive some of that money and his              
 company would be willing to take it out as a loan and pay it back             
 with an interest rate ranging from 0 to 7 percent.  He again stated           
 that his project was economically feasible, even if they go out on            
 the open market.  ACSI would just like to have the equal                      
 opportunity that's provided for other utilities throughout the                
 state and have access to lower cost debt financing providing lower            
 cost power.                                                                   
                                                                               
 MR. BETTINE also wanted the legislators to look at the present                
 budget situation.  He said it wasn't prudent to ask the citizens of           
 the state of Alaska to subsidize a major capital project competing            
 with a private sector project that would provide lower, more                  
 economic power for the people.                                                
                                                                               
 Number 368                                                                    
                                                                               
 CO-CHAIR IVAN requested that the division respond to the overview             
 given by Mr. Bettine, either by letter or personal contact.  He               
 said that further interest could be channeled through the different           
 legislators through meetings and letters of opinion.                          
                                                                               
 Number 385                                                                    
                                                                               
 REPRESENTATIVE BUNDE asked about shipping coal up the Yukon and               
 Kuskokwim River and how far up would shipping be possible.                    
                                                                               
 Number 389                                                                    
                                                                               
 MR. BETTINE answered they have only looked at sending it upriver to           
 Bethel at one-third the cost of shipping fuel oil.                            
                                                                               
 ADJOURNMENT                                                                   
                                                                               
 CO-CHAIR IVAN ended the meeting and stated that there was no                  
 meeting scheduled for Thursday, February 28.  He adjourned the                
 meeting at 3:00 p.m.                                                          
                                                                               

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