Legislature(1999 - 2000)
04/14/2000 08:55 AM House FIN
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* first hearing in first committee of referral
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+ teleconferenced
= bill was previously heard/scheduled
HOUSE FINANCE COMMITTEE
April 14, 2000
8:55 A.M.
TAPE HFC 00 - 118, Side 1.
CALL TO ORDER
Co-Chair Therriault called the House Finance Committee
meeting to order at 8:55 A.M.
PRESENT
Co-Chair Therriault Representative Foster
Vice Chair Bunde Representative Grussendorf
Representative Austerman Representative Moses
Representative G. Davis Representative Phillips
Representative J. Davies Representative Williams
Co-Chair Mulder was not present for the meeting.
ALSO PRESENT
Mike Tibbles, Staff, Representative Gene Therriault; Randy
Simmons, Executive Director, Alaska Industrial Development
and Export Authority (AIDEA), Department of Community and
Economic Development, Anchorage; Keith Laufer, Chief
Financial and Legal Affairs Manager, Alaska Industrial
Development and Export Authority (AIDEA), Department of
Community and Economic Development, Anchorage.
TESTIFIED VIA TELECONFERENCE
Brian Bjorkquist, Assistant Attorney General, Department of
Law, Anchorage.
SUMMARY
HB 446 An Act establishing and relating to the power cost
equalization endowment fund; relating to the power
cost equalization and rural electric
capitalization fund; authorizing and relating to
the sale of the four dam pool hydroelectric
project; establishing and relating to joint action
agencies created to purchase power projects; and
providing for an effective date.
CS HB 446 was reported out of Committee with a "do
pass" recommendation and with fiscal notes by the
Department of Revenue (new) and Alaska Industrial
Development and Export Authority (AIDEA) dated
4/12/00.
HB 447 An Act making appropriations relating to power
cost equalization and the sale of the four-dam
pool hydroelectric project and to capitalize
funds; and providing for an effective date.
CS HB 447 was reported out of Committee with a "do
pass" pass recommendation.
HOUSE BILL NO. 446
An Act establishing and relating to the power cost
equalization endowment fund; relating to the power cost
equalization and rural electric capitalization fund;
authorizing and relating to the sale of the four dam
pool hydroelectric project; establishing and relating
to joint action agencies created to purchase power
projects; and providing for an effective date.
Vice Chair Bunde MOVED to adopt work draft 1-GH2082\D,
Cramer, 4/14/00, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
KEITH LAUFER, CHIEF FINANCIAL OFFICIER, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), DEPARTMENT OF
COMMUNITY & ECONOMIC DEVELOPMENT, ANCHORAGE, explained the
technical changes which needed for the work draft.
? Section 4, Page 4, list the full names of the entities:
Copper Valley Electric Association, the City of
Ketchikan, Kodiak Electric Association, the City of
Petersburg, and the City of Wrangell.
Co-Chair Therriault MOVED to ADOPT that language change.
There being NO OBJECTION, it was adopted.
Mr. Laufer continued with the proposed changes:
? Page 8, Section 11, a technical change to the statutes,
which would only occur in the event that the sale is
consummated. In such an event, the inserted bottom
lines would not be needed: "For purposes of this
section, Tyee Lake, Swan Lake, Solomon Gulch, and
Terror Lake hydroelectric facilities are considered to
be one power project, and this power project is
referred to as the initial project".
Representative J. Davies asked why that language should be
deleted. Mr. Laufer explained that it no longer applies to
the Four Dam Pool projects.
Mr. Laufer continued, listing changes to:
? Section 13, adding a new repealler to AS 42.45.07c.
Co-Chair Therriault stated that section would only be
appropriate when the sale has been finalized.
Co-Chair Therriault MOVED to ADOPT the two changes
recommended by Mr. Laufer. There being NO OBJECTION, they
were adopted.
Mr. Laufer noted that the following sections need change:
? Sections 16, 17, and 18 of the bill, refers to the
"memorandum of understanding" (MOU) but do not provide
a definition. He recommended that there be a reference
to another MOU in the bill to be the definition for
MOU's in those sections.
Co-Chair Therriault suggested that they could refer back to
Section 15(d) which provides the definition for the
uncodified law in Subsection #11, on Page 10, Line 30. Co-
Chair Therriault noted that there could not be a definition
that applies to multiple sections. Every time the
definition must be repeated.
Representative G. Davis suggested that the names should also
be changed in the definition section. Mr. Laufer agreed for
purposes of the definition, the legal names are appropriate.
Co-Chair Therriault MOVED to ADOPT Amendment #3 which would
indicate that in the various definition sections, the legal
names of the entities be used. There being NO OBJECTION, it
was adopted.
Co-Chair Therriault referenced Sections 16, 17 and 18. Co-
Chair Therriault MOVED to ADOPT Amendment #4 which would
instruct the drafters to insert a reference back to the MOU
definition sections.
BRIAN BJORKQUIST, (TESTIFIED VIA TELECONFERNCE), ASSISTANT
ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, interjected
that amendment should also apply to Section 19 of the bill.
Co-Chair Therriault agreed and AMENDED the MOTION to include
Section 19. There being NO OBJECTION, all four sections
were changed.
Mr. Laufer continued:
? Delete Section 21 of the bill, which was a "hold-over"
from a very early draft. At that time, AIDEA
understood that they needed a delayed repealler. With
the current drafting of the bill, that would not be
necessary. He noted that Sections #3 and #12 would
have the same effective date, July 1st, 2000.
Co-Chair Therriault pointed out that there had been
discussion on the "findings" section. Representative J.
Davies noted for the record that $15.7 would be a subsidy
for the residential. He added that having the residential
subsidy does help to move the power on the commercial side
and it does not subsidize that area.
MIKE TIBBLES, STAFF, REPRESENTATIVE GENE THERRIAULT, spoke
to the proposed amendment. He noted that since there was a
reference to the initial project on Line 20, the option
would be to delete all of #525 or put the description that
is being deleted under AS 44.83.398.
Mr. Laufer asked to consult Mr. Bjorkquist regarding that
change. Mr. Laufer suggested the reference to the initial
project was no longer necessary.
Mr. Bjorkquist advised that provision would not be
applicable after the sale of the Four Dam Pool. It should
only be applicable to other contracts. If it does not apply
to other power projects, then the entire section should be
deleted. He reiterated that there should be no reference to
initial project.
Mr. Laufer asked if Mr. Bjorkquist thought that language
would work. Mr. Bjorkquist replied that it would work. Mr.
Laufer clarified the language:
? "A power sales agreement for the sale of power from a
project financed with a loan under AS 44.83.510";
including the rest of the provision as written and then
deleting the new language at the bottom.
Co-Chair Therriault MOVED to ADOPT Amendment #5 the above
language. There being NO OBJECTION, it was adopted.
Representative Foster MOVED to report CS HB 446 (FIN) out of
Committee with individual recommendations and with the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CS HB 446 (FIN) was reported out of Committee with a "do
pass" recommendation and with a new fiscal note by
Department of Revenue and a note by the Alaska Industrial
Development and Export Authority dated 4/12/00.
HOUSE BILL NO. 447
An Act making appropriations relating to power cost
equalization and the sale of the four-dam pool
hydroelectric project and to capitalize funds; and
providing for an effective date.
KEITH LAUFER, CHIEF FINANCIAL OFFICIER, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), ANCHORAGE, advised
that there had been a change made to Section 1 of the bill.
Monies that were appropriated for the Southeast inter-tie
loans in Section 5, Chapter 19, were appropriated under the
bill, some to Alaska Energy Authority (AEA) for cost of the
sale and the bulk to the Power Cost Equalization (PCE)
endowment fund. That language has been rewritten under
Section 1(a) of the bill. The original appropriation for
the Southesat inter-tie loan lapses back to the Railbelt
Energy Fund, Sections (b) & (c) and would be appropriated
from the Constitutional Budget Reserve (CBR).
Representative J. Davies asked the amount expected to be
lapsed to that fund. Mr. Laufer replied $20 million
dollars.
Vice Chair Bunde MOVED to ADOPT the work draft #1-GH2083\D,
Cramer, 4/13/00, as the version of the bill before the
Committee. There being NO OBJECTION, it was adopted.
Representative Phillips questioned if the interest would be
going into the endowment. Co-Chair Therriault replied that
it has been accruing into the general fund.
Mr. Laufer advised that there were no other changes to the
bill except the recommendation to Section 5 to add the legal
names of each entity.
Representative J. Davies referenced Page 2, Line 10,
"purchasing the utilities". He believed that the previous
version contained a definition of that language.
BRIAN BJORKQUIST, (TESTIFIED VIA TELECONFERNCE), ASSISTANT
ATTORNEY GENERAL, DEPARTMENT OF LAW, ANCHORAGE, acknowledged
that the other bill had a definition of "purchasing
utilities". Picking up that definition would insert after
"Wrangle" the language "purchasing a utility,". To Page 2,
Line 27, Co-Chair Therriault MOVED to ADOPT the proposed
Amendment #1, the language recommended by Mr. Bjorkquist.
There being NO OBJECTION, it was adopted.
Representative Austerman MOVED to ADOPT Amendment #2, which
would delete "$19.5 million dollars" and would insert
"$100,000,000". [Copy on File]. Representative Austerman
noted that the amendment would fully fund a Power Cost
Equalization (PCE) endowment fund so that it would not need
to be addressed every year. Representative J. Davies voiced
support for the amendment.
Co-Chair Therriault asked if the amendment were to pass,
would it cause technical problems with HB 446. Mr. Laufer
replied that it would reduce the dividends that flow from
the endowment, however, it would not impact HB 446.
Vice Chair Bunde pointed out that there is a statutory limit
for $17 million dollars. The current scheme does not fully
fund PCE. There would continue to be a need for a smaller
amount to fund that. He noted concern that even with the
amendment, there would most likely be additional funding
requests for unanticipated growth.
RANDY SIMMONS, EXECUTIVE DIRECTOR, ALASKA INDUSTRIAL
DEVELOPMENT AND EXPORT AUTHORITY (AIDEA), ANCHROAGE, advised
that the statutory language states that a minimum of $17.3
million dollars in that language would be taken from the
1993 Act. The current formula in statute is for $17 million
dollars.
Mr. Bjorkquist interjected that in Chapter 18, SLA 1993,
there is legislative intent that provides funding remain at
a minimum of $17 million dollars. Co-Chair Therriault asked
if that was considered intent language. Mr. Bjorkquist
replied it was. Vice Chair Bunde reminded members the value
of intent language.
Representative Bunde suggested that the amendment could be a
partial solution to the problem. Co-Chair Therriault asked
if the current statutory formula drives that number. He
noted that language would not modify the passage of either
of the bills; instead, it calls for proration.
Representative J. Davies agreed that the amendment would not
fully fund the endowment. He stated that if the next
legislature were to appropriate more or less, it would give
strong statutory support. He emphasized that it would not
bind future legislatures.
Representative Phillips spoke in favor of the amendment.
She stated that it would bring the issue of the PCE battle
"off the table".
A roll call vote was taken on the motion.
IN FAVOR: Austerman, Bunde, J. Davies, G. Davis,
Foster, Grussendorf, Moses, Phillips,
Williams
OPPOSED: Therriault
Co-Chair Mulder was not present for the vote.
The MOTION PASSED (9-1).
Representative Foster MOVED to report CS HB 447 (FIN) out of
Committee with individual recommendations. There being NO
OBJECTION, it was ordered.
CS HB 447 (FIN) was reported out of Committee with a "do
pass" recommendation.
ADJOURNMENT
The meeting adjourned at 9:35 A.M.
H.F.C. 7 4/14/00 a.m.
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