Legislature(2007 - 2008)BARNES 124
03/20/2007 08:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB202 | |
| HB152 | |
| HB202 | |
| HB152 | |
| HB202 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 202 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 152 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE
March 20, 2007
8:06 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Kurt Olson
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
All members present
OTHER LEGISLATORS PRESENT
Representative Bryce Edgmon
Representative Paul Seaton
COMMITTEE CALENDAR
HOUSE BILL NO. 202
"An Act relating to the community revenue sharing program; and
providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 152
"An Act establishing a renewable energy fund and describing its
uses and purposes."
- HEARD AND HELD
PREVIOUS COMMITTEE ACTION
BILL: HB 202
SHORT TITLE: COMMUNITY REVENUE SHARING
SPONSOR(s): COMMUNITY & REGIONAL AFFAIRS
03/14/07 (H) READ THE FIRST TIME - REFERRALS
03/14/07 (H) CRA, FIN
03/20/07 (H) CRA AT 8:00 AM BARNES 124
BILL: HB 152
SHORT TITLE: ESTABLISHING A RENEWABLE ENERGY FUND
SPONSOR(s): REPRESENTATIVE(s) HARRIS
02/26/07 (H) READ THE FIRST TIME - REFERRALS
02/26/07 (H) CRA, FIN
03/06/07 (H) CRA AT 8:00 AM BARNES 124
03/06/07 (H) Heard & Held
03/06/07 (H) MINUTE(CRA)
03/20/07 (H) CRA AT 8:00 AM BARNES 124
WITNESS REGISTER
SONYA HYMER, Staff
to Representative LeDoux
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Speaking as staff to the House Community
and Regional Affairs Standing Committee, sponsor of HB 202,
presented HB 202.
KATHY WASSERMAN
Alaska Municipal League
Juneau, Alaska
POSITION STATEMENT: Encouraged the committee to forward HB 202
from committee.
TOM QUICK, Member
Ouzinkie City Council
City of Ouzinkie
Ouzinkie, Alaska
POSITION STATEMENT: Testified in support of HB 202.
LUKE HOPKINS, Member
Alaska Municipal League (AML);
Presiding Officer, Fairbanks North Star Borough Assembly
Fairbanks North Star Borough
Fairbanks, Alaska
POSITION STATEMENT: During hearing of HB 202, urged the
committee to put in place a formula for the use of general fund
dollars for revenue sharing.
LYNNE WOODS, Member
Matanuska-Susitna Borough Assembly
Matanuska-Susitna Borough
Palmer, Alaska
POSITION STATEMENT: Testified in support of HB 202.
DAN COFFEY, Vice Chair
Anchorage Assembly
Anchorage, Alaska
POSITION STATEMENT: Urged the committee to offer revenue
sharing, whether through HB 202 or other legislation.
MARVIN YODER
Seward, Alaska
POSITION STATEMENT: Testified on HB 202.
TAMMIE WILSON
Fairbanks, Alaska
POSITION STATEMENT: Testified in support of HB 202.
TIM BOURCY, President
Alaska Municipal League;
Mayor, City of Skagway
Skagway, Alaska
POSITION STATEMENT: Testified in support of HB 202.
CARTER CRAWFORD
Fairbanks, Alaska
POSITION STATEMENT: Testified on HB 202.
CHARISSE MILLET, Staff
to Representative John Harris
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Reviewed the changes embodied in CSHB 152,
Version V.
REPRESENTATIVE JOHN HARRIS
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Spoke as the sponsor of HB 152.
JEROME SELBY, Mayor
Kodiak Island Borough
Kodiak, Alaska
POSITION STATEMENT: Urged the passage of HB 152 and HB 202.
CHRIS ROSE, Executive Director
Renewable Energy Alaska Project
Anchorage, Alaska
POSITION STATEMENT: Testified in support of HB 152.
TOM ABELL, Member
Kodiak Island Borough Assembly;
President, Southwest Alaska Municipal Conference
Kodiak, Alaska
POSITION STATEMENT: During hearing of HB 202, related the need
for sustainable revenue sharing.
ACTION NARRATIVE
CO-CHAIR ANNA FAIRCLOUGH called the House Community and Regional
Affairs Standing Committee meeting to order at 8:06:22 AM.
Representatives Fairclough, LeDoux, Neuman, and Olson were
present at the call to order. Representatives Dahlstrom,
Cissna, and Salmon arrived as the meeting was in progress. Also
in attendance were Representatives Edgmon and Seaton.
HB 202-COMMUNITY REVENUE SHARING
8:07:19 AM
CO-CHAIR FAIRCLOUGH announced that the first order of business
would be HOUSE BILL NO. 202, "An Act relating to the community
revenue sharing program; and providing for an effective date."
8:07:30 AM
SONYA HYMER, Staff to Representative LeDoux, Alaska State
Legislature, speaking as staff to the House Community and
Regional Affairs Standing Committee, sponsor, paraphrased from
the sponsor statement, which read [original punctuation
provided]:
HB 202 establishes a sustainable revenue sharing
program based on the owner-state concept. The
resources of the state belong to all Alaskans. Cities
and boroughs were formed by the state as political
subdivisions to provide services to the people.
Without revenue sharing, the entire cost of basic
services is [borne] by local taxpayers.
Skyrocketing fuel and retirement system costs and
inflation, in conjunction with severe cuts in revenue
sharing over the past several years have crippled
local governments' ability to provide even basic
services such as public safety, snow removal and road
maintenance, and the education of our children.
HB 202 provides a means for sustainable revenue
sharing in order to allow communities to continue
providing basic services. HB 202 would allow the
legislature to allocate 6% of certain natural resource
revenues to revenue sharing every year. Basing
revenue sharing on the state's annual income allows
for the flexibility needed to continue the program
during lean years, when state revenue is down.
The Alaska Senate is currently considering a companion
bill, SB 72, which was sponsored by the Senate
Committee on Community and Regional Affairs. Last
month, the Senate CRA moved a committee substitute for
SB 72 out of Committee. That bill now awaits a hearing
in Senate Finance. SB 72 is nearly identical to the
bill before this committee today. However, there are
two important differences between HB 202 and SB 72.
· In addition to providing for unincorporated
communities in the unorganized borough, HB 202
includes payments of $25,000 for the benefit of
an unincorporated community in an organized
borough. According to Section 29.60.870(b) of
this bill, a qualified unincorporated community
has a population of at least 25 people and there
is a non-profit community entity or tribal
council providing at least three of seven
services to the community, including: fire
protection, emergency medical services, water and
sewer, solid waste management, public road or ice
road maintenance, public health, and search and
rescue. This service-based eligibility applies
to unincorporated communities in organized
boroughs. In the unorganized borough,
unincorporated communities with 25 or more
residents would continue to qualify for payments
of $25,000.
· Another difference between HB 202 and SB 72 is HB
202's 'pass-through' clause in Section
29.60.870(b), by which the assembly of the
organized borough, rather than the State, would
determine which nonprofit entity or village
council in a community should receive the funds
and would cut the individual checks to the
communities.
The House and Senate versions of this bill share the
same goals. They establish a dedicated fund source
for sharing natural resource revenues in order to
fulfill two requirements of our State Constitution.
The first is Article 8, Section 2: to use our natural
resources for the maximum benefit of the people of
Alaska. The second is Article 10, Section I: to
maximize local government with a minimum of local
government units.
Without consistent, dependable revenue sharing,
provision of basic local services will continue to
decline. Some small communities have already closed
their doors. HB 202 provides the tool to solve the
problem of helping local governments fund basic
services.
8:11:52 AM
MS. HYMER suggested a conforming amendment striking the language
"or unincorporated community" on page 3, line 22. She then
highlighted documents in the packet, including the document
entitled "Unincorporated Communities of At least 25 People" and
"HB 202 Community Revenue Sharing Program." The latter of the
two documents points out that the Department of Commerce,
Community, & Economic Development (DCCED) estimates that
approximately 68 unincorporated communities in the unorganized
borough that would qualify for $25,000 payments and
approximately 68 unincorporated communities in organized
boroughs would also qualify. She noted that the aforementioned
are merely estimates because in each case the eligibility
requirements would have to be reviewed in detail to determine
which communities would qualify.
8:13:35 AM
MS. HYMER, in response to Co-Chair Fairclough, clarified that
the estimates are "68 plus 68." She reiterated that the
estimates are that 68 unincorporated communities in the
unorganized boroughs and 68 unincorporated communities in
organized boroughs would qualify.
8:14:06 AM
KATHY WASSERMAN, Alaska Municipal League (AML), related AML's
appreciation for HB 202. She explained that in AML's
discussions over the years it has become clear that most
legislators are okay with revenue sharing, but that AML needed
to develop some sort of fund that was sustainable. Last summer,
AML discussed tailoring the revenue sharing program with regard
to market fluctuations related to oil revenue, which is the
state's main source of revenue. Therefore, in doing so AML
developed tying [revenue sharing] to 6 percent of certain
natural resource revenues. Ms. Wasserman opined that all
communities need revenue sharing. In fact, the larger
communities have committed to deducting the revenue sharing from
their tax base, and thus the savings will be passed on to the
residents. However, the smaller communities need the funds just
to provide basic services. Ms. Wasserman pointed out that while
communities may receive capital budget funds for things such as
a new fire hall or a new fire truck, it still takes maintenance
hours, employees, fuel, and basic services to maintain those
things funded through capital funds. Communities are
experiencing difficulty in keeping up the day-to-day basic
infrastructure for which there is no grant or funding from the
capital budget, she further pointed out. Ms. Wasserman thanked
the committee for hearing HB 202 and encouraged the committee to
forward it from committee.
8:17:22 AM
MS. WASSERMAN, in response to Representative Neuman, reiterated
that most of the larger communities have committed to deducting
the revenue sharing from their property taxes.
REPRESENTATIVE NEUMAN asked if there's anything in writing
specifying that an area with a population over a certain point
would have to distribute a certain percentage of the [revenue
sharing] to reduce the tax liability of the property owners.
MS. WASSERMAN answered that AML had no intention of placing
restrictions on revenue sharing because each community knows
best how to use the money. Last year the tri-boroughs, which
consists of the Mat-Su Borough, the Kenai Peninsula Borough, and
the Municipality of Anchorage, all committed on paper to offset
the amount of revenue sharing received on property taxes.
8:19:41 AM
CO-CHAIR LEDOUX inquired as to whom these communities have
committed.
MS. WASSERMAN said that there are some letters of commitment
from some of the larger communities, which she offered to
provide to the committee.
8:20:38 AM
REPRESENTATIVE OLSON asked whether the Public Employees'
Retirement System (PERS) and Teachers' Retirement System (TRS)
contributions planned by the legislature this year are
considered municipal assistance.
MS. WASSERMAN replied no, adding that over 90 communities aren't
involved in PERS/TRS but will still need operating funds. The
revenue sharing funds, she opined, are a way for the communities
to use the funds in a way the communities see fit.
8:22:09 AM
TOM QUICK, Member, Ouzinkie City Council, City of Ouzinkie,
informed the committee that he is speaking on behalf of
Ouzinkie, which consists of six villages around the base of
Kodiak Island. He said that by extension he is also speaking on
behalf of the 250 villages throughout the state. Mr. Quick
opined that "we're" at a crisis point. In fact, 100 communities
of the 250 communities have moderate to severe concern with
regard to their financial integrity. He likened the situation
to damage control. Mr. Quick related that last week the six
villages from Kodiak met and discussed the organizational
structure, roles, responsibilities, and the positions of the
village, state, and the borough. He noted that he relayed
concerns brought out at that meeting to the Kodiak Borough
Island Assembly. He then noted that he has many years of
experience working with the Native leadership. During the
aforementioned discussion, there was review of the communities'
ability to carry out and sustain the individual village
positions. There was discussion that originally the state, as
it was formed, had the authority to collect revenue from the
resources, which were located by and large in rural areas, and
the borough had the authority to collect and redistribute
revenues from the state as well as collect revenues from the tax
base on the real estate and businesses in Kodiak. The bulk of
that budget goes to education. He pointed out that the villages
don't have any tax base. Furthermore, the majority of housing
is low-income U.S. Department of Housing and Urban Development
(HUD) housing and thus those properties are exempt from
taxation. The local impacts in Ouzinkie have been particularly
severe and Ouzinkie, in particular, has used almost all its
reserves. Those reserves are coming to a close and there aren't
any further options. Basically, Ouzinkie's fate is in the hands
of the legislature, he opined. Mr. Quick stated support of HB
202 and SB 72.
8:30:36 AM
LUKE HOPKINS, Member, Alaska Municipal League (AML); Presiding
Officer, Fairbanks North Star Borough Assembly, Fairbanks North
Star Borough, pointed out that in many areas where natural
resources are extracted/harvested, the general fund dollars for
that flow into state coffers provide the vast majority of the
revenue used in the state government. He further pointed out
that the Alaska State Constitution calls for sharing to the
maximum benefit with the citizens of Alaska. In the previous
two legislative sessions, as many as 22 different pieces of
legislation addressed revenue sharing. In closing, Mr. Hopkins
urged the committee to put in place a formula for the use of
general fund dollars for revenue sharing.
8:33:31 AM
REPRESENTATIVE NEUMAN highlighted that some very large amounts
of money have gone into the Fairbanks area for various capital
projects. He asked if Mr. Hopkins considered those as community
revenue sharing.
MR. HOPKINS answered that he considered such support for
transportation projects. He then pointed out that the Fairbanks
North Star Borough doesn't have road service powers and many of
the funds received for such are grants that come through the
Department of Transportation & Public Facilities (DOT&PF).
Therefore, it's a bit blurry whether that's considered revenue
sharing. In further response to Representative Neuman, Mr.
Hopkins said he doesn't believe the capital improvement projects
decreased property taxes in the area. However, he noted that
the additional municipal aid last year was used to offset a
portion of property taxes and assisted with large borough
maintenance projects.
8:35:53 AM
LYNNE WOODS, Member, Matanuska-Susitna Borough Assembly,
Matanuska-Susitna Borough, highlighted the increasing cost of
local government and the high growth of the area causing the
market value to increase, which in turn increases property
taxes. Furthermore, the demand for various services has
increased also. Ms. Woods stated her support for HB 202. She
informed the committee that in the two years she has served on
the Mat-Su Borough Assembly all possible measures to reduce the
burden of property tax have been taken. The proposed formula
would certainly fall in line with what other states and counties
have found in an effort to balance their budget. She related
that she philosophically agrees with the approach taken in HB
202. Ms. Woods recalled a recent assembly meeting in which the
Mat-Su Assembly had to approve local tax dollars to pay for
improvements to a state road for which the legislature
appropriated $150,000, but the improvements actually cost
$320,000. Therefore, as the state demands more from local
[governments], [local governments] need more resources than
property taxes, which [the borough] is committed to reducing.
8:40:14 AM
DAN COFFEY, Vice Chair, Anchorage Assembly, related that
Anchorage has pledged every bit of state money to reduce real
property taxes and increased the exemption for property taxes to
the maximum allowed. He said, "We've been asking for years for
the state to stop unfunded mandates." He then highlighted that
the state has many opportunities with regard to sources of
revenue, including the substantial permanent fund. Therefore,
local property tax relief is necessary in the form of revenue
sharing, which was a long-standing policy of the state for many
years. He said he was glad people are bringing back revenue
sharing. The source of revenue [for revenue sharing] needs to
be consistent and reliable over time in order to allow for local
governments to plan their budgets. Furthermore, such a plan
should recognize that local governments, in many instances, know
better how to spend their money than does the state. Mr. Coffey
urged the committee to offer revenue sharing, whether through HB
202 or other legislation.
8:42:26 AM
REPRESENTATIVE NEUMAN related his understanding from Mr. Coffey
that communities don't have anything left from which to produce
more revenue, and that [funds for revenue sharing] should come
from the permanent fund dividend. "The people have stated
several times that they don't want that to happen and I think
that that money belongs to ... all citizens of the state," he
pointed. He inquired as to how Mr. Coffey would respond to the
aforementioned as well as the fact that Anchorage has a self-
imposed tax cap and doesn't meet the maximum amount of funding
for education.
MR. COFFEY said that there's no law prohibiting the legislature
from making adjustments to the permanent fund if it was
desirous. In response to Representative Neuman's question, Mr.
Coffey questioned: "How much is enough and why should all of
the earnings be applied to the permanent fund as opposed to some
of the needs of local government." Mr. Coffey then clarified
that his earlier comment was that local governments have fewer
other resources. He opined that the vast resources that can
solve these problems aren't found in any one local government
but rather are found at the state level.
8:44:40 AM
MARVIN YODER said that the source of funds is the change [for
revenue sharing] as local governments are willing to be tied to
the resources of the state. In the past, revenue sharing plans
have tried to find another source of revenue and obtain a
general appropriation each year, which didn't really work. He
then related that as he drives from Palmer into Anchorage, he
finds it ironic that public safety services on the first half of
the trip are paid for out of the state's resources while the
second half of the trip those services are paid for by local
taxes in Anchorage. It seems, he opined, that the resources of
the state should be applied equally. The aforementioned is
important when reviewing the basic revenue stream that's being
tapped under HB 202. He then pointed out that revenue sharing
was originally tied to what services the local government
provided. This legislation, he emphasized, is aimed at the
basic services.
8:47:06 AM
TAMMIE WILSON related that she is in great support of this
revenue sharing. She noted that probably like many others she
has seen her taxes increase over the years. She said that she
likes HB 202 because it provides a sustainable source of revenue
so that new monies won't have to be found to meet this need
every year. Furthermore, HB 202 allows communities to provide
basic services as well as give tax relief to others. Ms. Wilson
applauded those communities and municipalities that have
committed all of their revenue sharing funds to relieve property
taxes. With regard to the PERS/TRS issue, she characterized it
as a separate issue that should be addressed separately. In
closing, Ms. Wilson expressed her hope that the committee would
support HB 202.
8:49:14 AM
TIM BOURCY, President, Alaska Municipal League; Mayor, City of
Skagway; related support for HB 202. The legislation provides
that municipalities "share in the wealth and ... the pain."
Although the state has so much potential and opportunity, it
lacks the basics of sustainable government. He expressed the
need to take the resources the state has and invest it in
education and infrastructure in order to create opportunities
for individuals to establish roots and start families. In
conclusion, he requested the committee's support for HB 202.
8:51:22 AM
CARTER CRAWFORD had her testimony read by Tammie Wilson as
follows:
With my involvement with the upcoming elections to
resolve property taxes and the efforts to keep the
community block grant make it painfully aware just how
important the municipal [revenue] sharing program is
and how critical local analysis of needs and local
allocation of state funding is. So, please support
it.
8:52:21 AM
CO-CHAIR FAIRCLOUGH, upon determining no one else wished to
testify, closed public testimony.
8:52:37 AM
CO-CHAIR FAIRCLOUGH asked if there was any opposition to holding
HB 202. [None was stated.] She related her understanding that
committee members should have copies of two amendments from
Representative Seaton. She then informed the committee that
staff has just received a new document to replace the
aforementioned amendments.
8:53:42 AM
REPRESENTATIVE NEUMAN clarified that Representative Seaton's
[conceptual] amendment that was just provided to the committee
is labeled 25-LS0489\K.1, Cook, 3/20/07.
CO-CHAIR FAIRCLOUGH announced that HB 202 would be held over
until Thursday.
[Further testimony was taken on HB 202 later in this hearing.]
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND
8:55:06 AM
CO-CHAIR FAIRCLOUGH announced that the final order of business
would be HOUSE BILL NO. 152, "An Act establishing a renewable
energy fund and describing its uses and purposes."
The committee took an at-ease from 8:55 a.m. to 8:58 a.m.
8:58:50 AM
REPRESENTATIVE NEUMAN moved to adopt CSHB 152, Version 25-
LS0413\V, Kane, 3/20/07, as the working document. There being
no objection, Version V was before the committee.
8:59:27 AM
CHARISSE MILLET, Staff to Representative John Harris, Alaska
State Legislature, explained that within Version V Section 2,
which establishes a renewable energy project fund, was added.
The aforementioned funds would be under the umbrella of the
Power Project Fund (PPF) within the Alaska Energy Authority.
Section 3 takes the loan component out of the fund, and thus
this section would be used as the grant money for the renewable
energy fund. Version V also includes some other technical
changes such as the elimination of the requirement for there to
be a minimum of 50 kilowatts in order to allow other user groups
to use the renewable energy fund and the account. Version V
also eliminates the reference to "electric grids" and replaces
it with "transmission and distribution lines" in order that
those projects that are connectors to the renewable energy
projects will have some opportunity to have their portion of the
project funded through these accounts. One of the main changes
embodied in Version V is that it provides for 5 percent of
market value (POMV) of the fund in order to have a self-
sustaining fund. Therefore, the loan component is a revolving
loan fund and the grant fund is a POMV fund. Section 3(k) is
merely boiler-plate language regarding the components of the
board. Under Version V, the state government board seat would
be held by the Denali Commission as it's an advocate for rural
renewable energy projects. Furthermore, the sponsor felt that
the Denali Commission would provide good input with regard to
the focus of the renewable energy fund and may provide some
matching federal funds.
9:02:57 AM
REPRESENTATIVE CISSNA recalled U.S. Senator Ted Stevens address
to the legislature in which he focused on the need for state
funding to the Denali Commission. She said that although she is
a proponent of the Denali Commission having a long life, there's
a question as [to its funding]. Therefore, she inquired as to
what the legislature should do when something isn't embedded in
the state structure.
MS. MILLET related her understanding that the Denali Commission
was included because it doesn't seem that it would be going away
this year or next year. Furthermore, the hope is that the
Denali Commission will continue. However, Ms. Millet pointed
out that the Denali Commission is merely part of an advisory
board established under HB 152 and thus the composition of the
board could be amended to add state government as a member if
the Denali Commission no longer existed.
9:04:47 AM
REPRESENTATIVE JOHN HARRIS, Alaska State Legislature, sponsor,
highlighted that the Denali Commission has been involved in many
rural projects, including energy projects. A good portion of
what HB 152 attempts to address is rural energy, especially
attempting to reduce costs to the rural areas of the state, he
said. Although this legislation isn't exclusively for rural
Alaska, it is predominantly for rural areas where it's more
difficult to generate cheap energy. The Denali Commission
actually petitioned the sponsor to be an active part in this
process [proposed by HB 152].
9:06:01 AM
REPRESENTATIVE NEUMAN directed attention to page 3, line 6, and
inquired as to whether the funds for this fund would come from
the permanent fund dividend or the Railbelt Energy Fund.
REPRESENTATIVE HARRIS said that he didn't know from where the
funds for this proposal will come. The first step is to
authorize the program in statute. He offered to work with the
Finance Committees and the administration to determine funding
sources. He mentioned that the funds could come from a variety
of sources, including the 2007 surplus. Representative Harris
said that although this program probably won't be funded when it
goes through the legislative process, the hope is that at the
conclusion of the budget process there will be some seed money
to generate revenue. He noted that this proposal is similar to
the power cost equalization (PCE) fund in which a set amount of
funds are placed in a fund from which the interest/earnings are
used to facilitate and pay for projects. He also likened the
proposal embodied in HB 152 to the former science and technology
fund. In further response to Representative Neuman,
Representative Harris suggested that perhaps a portion of the
2007 surplus will be utilized, but at this point there's no set
amount. He emphasized the need to generate a decent amount of
revenue from the earnings of whatever funds are utilized.
Again, he related that there could be a variety of funding
sources and it would depend upon what's politically palatable.
9:10:03 AM
REPRESENTATIVE SALMON referred to Section 3(f)(2) of HB 152,
which specifies that in order for a renewable energy project to
qualify for a grant or loan, the project must "generate more
than 50 kilowatts of electricity and distribute the electricity
to more than 20 end users". He then inquired as to what
[language] replaces that in Version V.
MS. MILLET said that the aforementioned limiting language was
deleted. She noted that AEA would be able to relate the
problems associated with limiting it to 50 kilowatts and 20 end
users.
REPRESENTATIVE HARRIS interjected that he didn't want to limit
[a renewable energy project] or what qualifies.
9:11:52 AM
REPRESENTATIVE SALMON recalled that HB 152 specified that the
Alaska Native organizations would qualify as a housing
authority.
REPRESENTATIVE HARRIS said he believes that's correct.
MS. MILLET confirmed that [Alaska Native organizations] remain
qualifying entities in [Version V].
9:12:23 AM
CO-CHAIR FAIRCLOUGH related that committee members have
expressed concern that the committee just received Version V
and committee members wish to hold HB 152 until Thursday in
order to provide an opportunity to review Version V.
Additionally, numerous individuals have signed up to testify on
HB 152, although the public testimony has been closed.
Therefore, she announced that the committee has decided to
reopen the public hearing. Co-Chair Fairclough, drawing upon
her experience of attending the Energy Council, recalled that
there was great concern with regard to the efficient use of
energy. Therefore, she asked if the sponsor would consider, on
the criteria for qualification on the project, a criteria that
would include efficient use of energy.
MS. MILLET said that the efficiency language wasn't included in
the legislation, although the legislation does include language
that establishes criteria. She noted that AEA has been very
effective in not doing a project unless it's economical and
makes good sense. Therefore, developing the criteria has been
left to the regulatory process.
REPRESENTATIVE HARRIS said that there are the following two
thoughts: the cost of generating power; the facility/procedure
to make it cost-efficient for the end user. Representative
Harris acknowledged that although there is the desire to have
less expensive power, people need to use common sense and build
correctly. He opined that one certainly wouldn't want to dump
electricity into a system that doesn't call for conservation.
Representative Harris then related that he doesn't have a
problem with the legislation being held over.
9:16:17 AM
REPRESENTATIVE CISSNA characterized HB 152 as important
legislation. She noted that she has been very interested in
this legislation, and therefore she asked if the sponsor would
work with her on potential amendments.
REPRESENTATIVE HARRIS replied yes. He then credited
Representative Thomas and his staff who sponsored other
legislation that has been incorporated into HB 152.
Representative Thomas and his staff did a considerable amount of
work to get the legislation to its current point, he mentioned.
9:17:50 AM
REPRESENTATIVE NEUMAN related that the City of Galena is
reviewing partnering with Japan on a small nuclear plant in
rural Alaska. He asked if such a program would qualify as an
alternative energy program under this legislation.
REPRESENTATIVE HARRIS replied yes. He recalled that a few years
ago the legislature appropriated $500,000 to facilitate the
economics and engineering for that particular project. If the
project can be done economically, it would be helpful to the
rural parts of the state as nuclear energy is a very inexpensive
power source that can be moved into villages and other areas.
However, the difficulty with nuclear energy is waste and how to
deal with it over time. Obviously, the amount of funds
available to do these things won't be large initially, although
it will take large capital infusions to establish wind
generation power and other alternative energy projects.
REPRESENTATIVE NEUMAN referred to page 3, line 6, and related
his understanding that the language infers that the state is
seeking help from private industry.
REPRESENTATIVE HARRIS replied yes, adding that help [would be
welcome] from anywhere. He noted that the utility companies
within the state are trying to partner with state agencies. He
mentioned the rural intertie and the DC power cable prototype.
9:20:50 AM
MS. MILLET pointed out that the last section of Version V
delegates the appointments by the governor to the advisory
committee.
9:21:39 AM
CO-CHAIR FAIRCLOUGH then reopened the public hearing on HB 152.
[Further testimony on HB 152 was taken later in this hearing.]
HB 202-COMMUNITY REVENUE SHARING
CO-CHAIR FAIRCLOUGH, noting that public testimony had been
closed on HB 202, allowed testimony from those who had missed
the earlier opportunity to testify on HB 202.
9:22:09 AM
JEROME SELBY, Mayor, Kodiak Island Borough, expressed the
significance and level of desperation that exists in a number of
the smaller communities in the state. There are a number of
villages in the state, he opined, that have about a year left.
If the legislature can't determine how to help these villages
this year, there will be a disaster in these small communities
in Alaska. He opined that the issue embodied in HB 202 will be
the issue that defines this legislature. Mayor Selby urged the
committee to move HB 202 and HB 152 forward. He noted that for
villages such as Ouzinkie, the cost of electricity is partly
what's driving it out of existence and renewable energy is part
of the long-term solution to help bring operating costs down in
rural Alaska.
[Further testimony on HB 202 was taken later in this hearing.]
HB 152-ESTABLISHING A RENEWABLE ENERGY FUND
CO-CHAIR FAIRCLOUGH then allowed those who had missed the
earlier opportunity to testify on HB 152 the ability to do so.
9:27:08 AM
CHRIS ROSE, Executive Director, Renewable Energy Alaska Project,
related his support of HB 152 and urged its passage.
9:28:20 AM
CO-CHAIR FAIRCLOUGH again closed public testimony on HB 152.
[HB 152 was held over.]
HB 202-COMMUNITY REVENUE SHARING
9:29:01 AM
CO-CHAIR FAIRCLOUGH then returned the committee's attention to
HB 202 and reopened public testimony.
9:29:11 AM
TOM ABELL, Member, Kodiak Island Borough Assembly; President,
Southwest Alaska Municipal Conference (SWAMC), informed the
committee that he is one of the 20 percent who voted to use the
permanent fund for the "rainy day." He then informed the
committee that the Public Employees' Retirement System (PERS)
and the Teachers' Retirement System (TRS) [contributions planned
by the legislature] don't help the small villages and
communities as it's a minute matter for them. He echoed earlier
comments that small communities are being devastated. These
communities, he opined, need sustainable revenue sharing in
order to budget things such as landfills. Mr. Abell related
that although Ouzinkie is one of the better funded areas, it's
within a few months of going bankrupt at which point [the
responsibility] will fall to the municipalities.
9:31:35 AM
REPRESENTATIVE NEUMAN recalled that Mr. Ritchie, former
executive director of the Alaska Municipal League (AML), had
testified that AML would identify the permanent fund as the
source of funding for revenue sharing. He asked if that's what
AML has been discussing.
MR. ABELL deferred to Mayor Selby.
9:32:30 AM
REPRESENTATIVE CISSNA acknowledged the importance of the
communities around Kodiak Island to be healthy in order to
maintain the health of the town of Kodiak itself. She inquired
as to the impact on Kodiak, if the surrounding communities
failed.
MR. ABELL said that he can't specify a percentage of financial
impact because he believes that the devastation is to a way of
life. He explained that people live in small towns because they
don't want to live in the larger town and if there's no
government to keep the smaller town moving forward, the
community ceases to exist. He pointed out that those in the
outlying communities surrounding Kodiak have to come into Kodiak
for supplies and it's where the tourism industry is located. As
an example of the deterioration of these smaller communities, he
highlighted that in the small town of Port Lyons the grocery
store just closed. Mr. Abell then pointed out that such
communities can't afford to come and represent themselves in
larger venues.
9:36:05 AM
JEROME SELBY, Mayor, Kodiak Island Borough, related that after
trying to work through revenue sharing last year, basically AML
stepped back. He further related that [AML] feels that revenue
sharing isn't about a pot of money but rather about providing,
at the local level, basic services to live wherever an
individual chooses to live. From that perspective the notion
was borne to take a percentage of the revenues coming to the
state, the largest of which comes from the state's natural
resources. Furthermore, according to the constitution the
revenue from the state's natural resources is the people's
money. He then left the committee documentation from Ouzinkie
illustrating its dwindling resources over the past few years.
Ouzinkie's situation is repeated in roughly 200 communities in
the state.
9:39:01 AM
REPRESENTATIVE CISSNA identified two dynamics: government and
public funding, and the private sector. She then inquired as to
the value of smaller communities for Kodiak Island as a whole
and whether there would be tangible impacts were those smaller
communities to go away.
MAYOR SELBY submitted that Alaska is about its smaller
communities and which is why they are important. Mayor Selby
opined that the smaller communities of Alaska are the state's
identity and hold the "real Alaskans." He then opined that
leaders have a responsibility to ensure that those in rural
areas have the ability to live wherever they want. "It's a
matter of us sharing," he said. He further said that it's a
matter of where the state's priorities lie rather than whether
there's money available. These individuals in smaller
communities contribute to the larger communities as well as the
state economy. However, these smaller communities are too small
to generate enough property tax to pay for basic needs. The
aforementioned is why revenue sharing is necessary, he said.
"And in a state with $37 billion in the bank and a $3 billion
operating budget, we rank either 49th or 50th ... in how much is
shared back," he related. He further related that the
aforementioned is embarrassing to him.
9:43:37 AM
CO-CHAIR FAIRCLOUGH pointed out that Alaska ranks last, after
the distribution of the permanent fund, for taxes. Therefore,
she opined that the state shares the wealth and it's a matter of
perspective. Still, she maintained that [the state] needs to
look to provide viable communities in rural Alaska.
9:44:23 AM
CO-CHAIR FAIRCLOUGH, upon determining no one else wished to
testify, again closed public testimony.
[HB 202 was held over.]
A conversation then ensued regarding time limitations that may
not always allow already closed public testimony to be reopened.
There was also commentary with regard to attendance of committee
hearings and the various responsibilities of legislators and
ways in which they can participate in the process.
9:51:51 AM
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 9:51 a.m.
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