Legislature(2011 - 2012)HOUSE FINANCE 519
04/12/2011 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB103 | |
| HB104 | |
| HB183 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 102 | TELECONFERENCED | |
| += | HB 183 | TELECONFERENCED | |
| += | HB 103 | TELECONFERENCED | |
| += | HJR 4 | TELECONFERENCED | |
| += | HB 89 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 104 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
April 12, 2011
2:06 p.m.
2:06:50 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 2:06 p.m.
MEMBERS PRESENT
Representative Bill Stoltze, Co-Chair
Representative Bill Thomas Jr., Co-Chair
Representative Anna Fairclough, Vice-Chair
Representative Mia Costello
Representative Mike Doogan
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Reggie Joule
Representative Mark Neuman
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Senator Charlie Huggins; Sarah Fisher-Goad, Deputy Director
of Operations, Alaska Energy Authority, Department of
Commerce, Community and Economic Development; Brian Carey,
Engineer, Alaska Energy Authority, Department of Commerce,
Community and Economic Development; Representative Lance
Pruitt, Co-Chair, House Energy Committee; Mike Hanley,
Commissioner, Department of Education and Early Childhood
Development; Diane Barrans, Executive Director,
Postsecondary Education Commission, Department of Education
and Early Development; Shiela Peterson, Staff, Senator Alan
Dick.
PRESENT VIA TELECONFERENCE
Lindsay Wolter, Assistant Attorney General, Civil Division,
Environmental Section, Department of Law.
SUMMARY
HB 103 POWER PROJECT; ALASKA ENERGY AUTHORITY
CSHB 103(FIN) was REPORTED out of Committee with
a "do pass" recommendation and with two new
fiscal impact notes by the Department of
Commerce, Community and Economic Development.
HB 104 ALASKA PERFORMANCE SCHOLARSHIPS
CSHB 104(FIN) was REPORTED out of Committee with
a "no recommendation" and with two zero notes by
the Department of Revenue, one indeterminate note
by the Department of Education and Early
Development, and previously published fiscal
note: FN3 (EED).
HB 183 APPLICATION OF VILLAGE SAFE WATER ACT
CS HB 183 (FIN) was REPORTED out of committee
with a "do pass" recommendation and with attached
previously published fiscal note: FN 1 (DEC).
SB 102 AK AFFORDABLE HEATING PROGRAM PAYMENTS
SB 102 was SCHEDULED but not HEARD.
HOUSE BILL NO. 103
"An Act relating to the procurement of supplies,
services, professional services, and construction for
the Alaska Energy Authority; establishing the Alaska
Railbelt energy fund and relating to the fund;
relating to and repealing the Railbelt energy fund;
relating to the quorum of the board of the Alaska
Energy Authority; relating to the powers of the Alaska
Energy Authority regarding employees and the transfer
of certain employees of the Alaska Industrial
Development Export Authority to the Alaska Energy
Authority; relating to acquiring or constructing
certain projects by the Alaska Energy Authority;
relating to the definition of 'feasibility study' in
the Alaska Energy Authority Act; and providing for an
effective date."
2:07:19 PM
Vice-chair Fairclough referred to previous testimony
related to Coastal Zone Management [HB 106]. She relayed a
communique from Mayor Dan Sullivan that the City of
Anchorage has no formal position on the issue.
Vice-chair Fairclough MOVED work draft CSHB 103(FIN) (27-
GH1822\I, Kane, 4/11/11) as a working document before the
committee.
Co-Chair Stoltze OBJECTED for discussion.
SARAH FISHER-GOAD, DEPUTY DIRECTOR OF OPERATIONS, ALASKA
ENERGY AUTHORITY, DEPARTMENT OF COMMERCE, COMMUNITY AND
ECONOMIC DEVELOPMENT, explained the CS. She communicated the
differences between CS HB 103 ENE and the CS. The Energy
Committee version allowed Alaska Energy Authority (AEA) to
own and construct new projects. The CS narrowed the focus to
one specific project; the Susitna Project. The CS deleted
the creation of a new Alaska Railbelt Energy fund but
maintained the existing Railbelt Energy fund in statute.
Ms. Fisher-Goad pointed out that the CS removed the
provision allowing AEA to hire staff and avoided staff
transfers from Alaska Industrial Development Export
Authority (AIDEA) to AEA. The CS maintained the status quo
and eliminated five of seven fiscal notes. The fiscal notes
were restructured down to two: one AEA project fiscal note
and one AIDEA fiscal note to hire the positions funded by
inter-agency receipts.
2:11:24 PM
Ms. Fisher-Goad furthered that the CS deleted a provision
allowing AEA to form a subsidiary corporation. She believed
subsidiary authority was necessary in the future. AEA could
advance the project and file the preliminary permit
application with the Federal Energy Regulatory Commission
(FERC) without subsidiary authority.
Ms. Fisher-Goad added that the CS would also grant approval
for the Reynolds Creek Hydroelectric Project and Cordova
Electric Cooperative Humpback Creek Project loans. She
explained that approval did not require AEA to issue the
loans. The provision was merely the legislative
authorization required by statute to access a loan or grant
over $5 million from the power project fund.
Ms. Fisher-Goad concluded that the CS authorized AEA to
exercise eminent domain related to the Susitna project. She
related that eminent domain was not necessary through the
preliminary FERC process; the FERC would eventually grant
AEA eminent domain authority.
Representative Gara asked why the previous version
authorized AEA to directly hire staff. Ms. Fisher-Goad
explained that for the last 18 years AEA maintained a
contractual personnel relationship with AIDEA. The decision
to compromise on the issue was a matter of priorities to
advance the legislation on to the FERC process in the fall.
Representative Gara wondered if the decision was AEA's and
open to committee discussion.
2:15:14 PM
Ms. Fisher-Goad replied it was her decision to offer the
compromise to progress the legislation.
Representative Gara stated concerns. He acknowledged
consensus in the legislature to build a big hydropower
project. He referred to discussions about a choice between
the Chakachamna or Susitna hydroelectric projects. AEA
reported less fisheries impacts with the Susitna project.
He contacted the Department of Fish and Game (DFG). The
department's response was to propose a study of potential
impacts. He was concerned that the possible fisheries
impact on the Susitna was not known. Ms. Fisher-Goad
reported that the FERC process mandated studies on
potential environmental impacts.
BRIAN CAREY, ENGINEER, ALASKA ENERGY AUTHORITY, DEPARTMENT
OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained
that the AEA preliminary decision document reported on the
both projects fisheries impacts. The findings were
developed from discussions with various resource agencies,
hydrologists and biologists. The FERC process required that
the licensee and resource agencies carry out extensive
additional studies on fisheries impacts. Representative
Gara stated concerns on the impacts of hydro-dam created
high water and low-water flow times on the Susitna River
and the impact on salmon and rainbow trout downstream. He
worried that during low-water flow the downstream river
braids could dry up. Mr. Carey replied that environmental
contractors were conducting current data gap analysis to
determine further areas of study.
2:19:36 PM
Representative Gara wondered why preliminary reports stated
that fisheries impacts were less on the Susitna when the
truth was inconclusive. Mr. Carey explained why the
preliminary report favored the Susitna project. He
communicated that a significant salmon run returned to
Chakachamna Lake. The Chakachamna project would divert
water away from the lake and create a new drainage;
resulting in an inadequate water supply to maintain the red
salmon run. In addition, the Trading Bay State game refuge
wetlands, located downstream would dry and lose habitat for
water fowl and salmon. The amount of water needed to
protect the salmon and the wetlands refuge would reduce the
amount of energy generation and render operation
uneconomical. Preliminary studies suggested that the water
flow required to sustain salmon runs on the Susitna was
sufficient if restricted and regulated through license
conditions.
Representative Neuman spoke to concerns by the people in his
district about the Susitna project. He asked for
clarification on the FERC process. Ms. Fisher-Goad referred
to the "FERC Licensing - Public Processes"(copy on file)
memo distributed to committee members and the public. She
announced that AEA was committed to follow a very extensive
public process. The public process would begin once AEA
filed the preliminary application for FERC licensing. The
process included extensive communications with the
stakeholders. The Authority would establish working groups
comprised of stakeholders, state and federal resource
agencies, tribal organizations, non-governmental
organizations, and members of the public. She assured that
whether AEA applied for an alternative or integrative
license, the public process was exhaustive.
2:23:56 PM
Representative Neuman referred to the power of eminent
domain and asked how many land owners were affected. Mr.
Carey replied that the issue affected less than ten; state,
federal, or corporate land owners. Representative Neuman
advised that State and FERC oversight was warranted to
ensure a system of checks and balances.
Representative Doogan noted that the CS was substantially
different than the last version he had reviewed. He cited
page 3, line 30 "to acquire a Susitna River power project".
He asked if the language was vague for a reason. Ms.
Fisher-Goad reported that the intent of the CS was to
define the Susitna project at the Watana location but
remain broad enough not to bind it to a more specific site.
2:28:18 PM
AT EASE
2:31:44 PM
RECONVENED
Representative Doogan queried the appropriation of Railbelt
Energy Fund money for the Susitna project.
Co-Chair Stoltze informed that the Senate proposed a
Capital budget appropriation of Railbelt Energy Funds for
$65.7 million. Ms. Fisher-Goad corrected that the funds
were comprised of general funds appropriated for the
Susitna project. She explained that the funding source for
the AEA fiscal note for contractual services was Capital
Improvement Projects (CIP) receipts. The AIDEA fiscal note
reflected personnel costs.
Vice-chair Fairclough noted that the AEA fiscal note
depicted increased costs in the out years. She questioned
why the new AIDEA fiscal note ($1.125 million) was only
funded for one year. Ms. Fisher-Goad expounded that the
AIDEA fiscal note reflected the funding transfer for
personnel from AEA interagency receipts. In FY12 the costs
would roll into the base of the budget. The AEA fiscal note
carried out the cost for the positions in the out years.
2:35:04 PM
Vice-chair Fairclough thought the AIDEA fiscal note was
incorrect. Ms. Fisher-Goad offered to amend the AIDEA
fiscal note. Vice-chair Fairclough clarified that the CS
eliminated creation of a new Railbelt Energy Fund but a
vehicle existed to receive money for the project. Ms.
Fisher-Goad affirmed. She reiterated that the existing
Railbelt Energy Fund remained in statute.
Vice-chair Fairclough noted that the energy version of HB
103 provided for creation of subsidiaries to protect the
state. She asked how the state was protected under the CS.
Ms. Fisher-Goad restated that AEA must create a subsidiary
in the future. Subsidiary creation was not necessary in the
preliminary stage of the project. AEA would request
subsidiary authority once the FERC process was completed
and a financing plan was emerging. A subsidiary corporation
was necessary to form a financing structure.
Vice-chair Fairclough alluded to a threatening email from a
concerned Alaskan. She hoped that frustrated people would
communicate with legislators rather than make threats. She
hoped that all voices are heard in meaningful dialog.
2:41:04 PM
Co-Chair Thomas commiserated with Vice-chair Fairclough. He
distanced himself from anyone in his district involved in
making threats. He referred to the disturbing email and
advised "If you don't like the show, shut it off."
REPRESENTATIVE LANCE PRUITT, CO-CHAIR, HOUSE ENERGY
COMMITTEE, approved the CS version under discussion. He
addressed the intent of CS HB 103 (ENE). He explained that
the Energy Committee version planned for the Susitna
project long term. The energy version provided AEA the
authorization to proceed well into the future and included
additional authority for other projects. He stressed that
the Susitna project was the backbone behind CSHB 103 (ENE).
He felt that the new CS was "pared down" but the intent to
proceed with the Susitna project was the same. He pointed
out that AEA would not have the same authority or autonomy
in the CS.
Representative Pruitt addressed why the Chakachamna Project
was not considered. He stated that the fisheries issues
were vast. There were five salmon runs in the river. He
described how the fish behaved. They would not be able to
travel back through the tapped lake to the ocean. The
Chakachamna project would eliminate the runs. He stated
that the Susitna project would have minimal impact compared
to Chakachamna. The $65.7 million would include extensive
studies.
Representative Pruitt confirmed that the Senate version
included funding for the project in the capital budget. He
believed it was vital to keep the project in the budget. He
referred to the subsidiary issue. He spoke to concerns in
the Senate. The suspicion was that an organization without
legislative control would misuse their autonomy if
authorized to create multiple subsidiaries. He noted that
the new CS limited AEA to the creation of one subsidiary.
He hoped that would waylay the fears. A subsidiary does not
have authority beyond the owner company's authority. The CS
granted enough authority to begin the process and issue
bonds. He assured that AEA exercised restraint with bonding
authority in the past.
2:47:11 PM
Representative Pruitt appreciated work done on the CS. He
believed that it was a step in the right direction. He
noted wide support from both bodies and both parties. The
project would benefit Anchorage and the Railbelt region,
Valdez, and some rural regions. He argued that if the
Susitna project was constructed in the 1980's the Kenai LNG
[liquefied natural gas] plant would operate today and an
established low-cost form of energy. He warned that the
longer the delay, the more expensive the project and energy
costs to the consumer.
Co-Chair Stoltze appreciated all of the work done on the
legislation by both bodies and both parties.
Co-Chair Stoltze REMOVED his OJBECTION to adopting the CS.
There being NO OBJECTION, it was so ordered.
Representative Guttenberg asked for more information about
AEA's eminent domain authority. He wondered how much and
what kind of property was involved. MS. Fisher-Goad
answered that the FERC licensing process would provide AEA
some authority to exercise eminent domain. She added that
it was premature to predict AEA's application of eminent
domain.
2:51:34 PM
Representative Guttenberg asked if FERC will grant AEA
eminent domain authority regardless of legislative
approval. Ms. Fisher-Goad affirmed that the FERC licensing
process will provide the authority.
Representative Guttenberg asked what the difference was
between the alternative and integrated FERC licensing
process. Mr. Carey explained that there were three
different licensing processes: integrated licensing process
(ILP), alternative licensing process (ALP), and the
traditional licensing process (TLP) used in the 1980s.
Currently, the ILP was the default licensing process for
FERC. The FERC preferred the ILP because it mandated very
specific timelines the licensee and resource agencies must
meet. Much of the licensing in Alaska used the ALP. The ALP
provided more latitude in the timing of the licensing
process. The timing worked more favorably with conducting
studies during Alaska's extreme seasons. He added that the
ALP was a more collaborative process and not as tight on
timelines. The overall process can take more time.
Representative Guttenberg requested that AEA research
whether the different licenses dictate different timelines
for the public process.
2:55:18 PM
Representative Edgmon identified the words "acquisition"
and "acquire" in the legislation. He asked if the
legislation set up the ability for AEA to own a multi-
billion dollar energy project. Ms. Fisher-Goad affirmed.
Representative Edgmon asked if the bill allowed utility
companies to partner with AEA on the project. Ms. Fisher-
Goad referred to the Bradley Lake project. She elaborated
that AEA owns the Bradley Lake hydroelectric project. The
Bradley Lake Project Management Committee comprised of
utility companies co-managed the project with AEA. The
Authority contracted with Homer Electric Association to
operate the project. She viewed the Bradley Lake structure
as the appropriate model for the Susitna project.
Representative Edgmon asked how the Susitna project will
help the power situation in rural Alaska. Ms. Fisher-Goad
maintained that lower costs in the Railbelt directly
impacted rural Alaska through the Power Cost Equalization
(PCE) program weighted average cost. The floor for PCE
rates were established by a weighted average rate paid
between Anchorage, Fairbanks, and Juneau. Less expensive
Railbelt energy costs directly correlated to a greater PCE
range for rural communities.
Co-Chair Thomas asked if a power-sales agreement was
required before the project was approved.
2:58:44 PM
Ms. Fisher-Goad reported that although not explicit in the
legislation the power-sales agreement between the utilities
purchasing the power and AEA was required at the time the
license was issued in order to develop the financing plan.
Co-Chair Thomas queried the repercussions of operating
costs exceeding the power-sales agreement. Ms. Fisher-Goad
reminded the committee that the project was in its infancy.
License restrictions will reveal increased project costs.
Representative Gara announced that the fisheries on the
Susitna River were much more important than on the
Chakachumna Lake. In addition, the legislature received
information that the Chakachumna Lake project could sustain
a fish run and generate power. He asked how the conclusion
was reached that the fisheries impact was less on the
Susitna. Mr. Carey explained the differences between both
projects fisheries impacts. He related that resource
agencies have conditional licensing ability or "mandatory
conditioning"; part of their duty to protect the fisheries.
The highest priority with the Chakachumna project was to
protect the salmon run for the bears and eagles of the
national park [Lake Clark National Park]. Regulating water
flow between the power tunnel and the river to sustain the
runs would be difficult with a lake tap on Chakachamna
Lake. Most of the salmon runs on the Susitna River use side
channels or rivers. He added that the location of the
Wantana Dam would only use 16 percent of the flow of
Susitna River's total flow. Flow reductions down river
remained above historic flow minimums. License conditions
would regulate river flow reductions. Extensive spawning
ground studies were required. The draft environmental
statement from the 1980's reported a positive impact to
main stream Chinook salmon population on the Susitna River.
In addition, mitigation money was available to DFG for
habitat enhancement along the Susitna to mitigate any
potential impact. He concluded a possible overall positive
impact on the fisheries with mitigation.
Representative Gara asked for project cost estimates and
queried if a state subsidy was required. Ms. Fisher-Goad
reported a current cost estimate of $4.5 billion. AEA
worked with a financial firm to produce a model that
established the state participation's effect on power
costs. Unknown license conditions and material costs make
rough estimates difficult to determine.
3:07:29 PM
Ms. Fisher-Goad shared a simplified estimate. The formula
was 50 percent of the cost of the project at approximately
$0.06 or $0.07 wholesale power costs. She qualified that
until the model was complete cost estimates or state
subsidies were almost impossible to predict.
Vice-chair Fairclough asked what amount of acreage was
involved in eminent domain. Mr. Carey reported that the
property owners at the reservoir area were: Bureau of Land
Management (BLM) (state selected land), state land, and
Native Corporation land (Tyonek and Cook Inlet Region, Inc.
(CIRI)). The project estimated twenty thousand acres of
land submerged at the reservoir. Negotiations to purchase
or trade property with Tyonek and CIRI would occur. Vice-
chair Fairclough discussed that the committee members
received email from concerned citizens. She felt
consideration of eminent domain was part of the committee
process. She wondered about the concerns. Mr. Carey
responded that individual property owners did not occupy
land at the dam site or the intertie at Gold Creek.
Vice-chair Fairclough probed if it was possible for a no
build recommendation or "record of no decision" after the
FERC public process. Ms. Fisher-Goad affirmed. She
identified multiple opportunities during the FERC licensing
process and future points suitable to consider a no build
recommendation related to alternative costs of power.
Discussions at the financial level about reasonable costs
of power and legislative funding or failure to execute a
power-sales agreement could foster a no-build approach.
Ms. Fisher-Goad disclosed that AEA received concerns by
residents that live near the dam site. She reported
concerns related to effects on local business, seismic
activity, and catastrophic dam failure. She suggested that
the public concerns were varied and not necessarily focused
on eminent domain.
3:13:20 PM
Vice-chair Fairclough referred to the coastal trail project
in Anchorage. She reported that the state reached a record
of no decision based on the trail's impact on property
owners. The federal government had concurred. The state
does not grant eminent domain lightly. She referred to page
3, line 4, of the CS "to enter into the contract with any
persons and the United States" and wondered how the
language impacted the Alaska Energy Authority. Ms. Fisher-
Goad replied the language was currently in the statute.
Representative Neuman wondered whether there was an
opportunity for the legislature to pull the plug on the
project if it was not in the best interest of the state.
Ms. Fisher-Goad replied in the affirmative. The legislature
could restrict any future funding for the project.
Representative Doogan referred to the phrase "reasonable
cost of power." He wondered how the department determined
reasonable cost of power. Ms. Fisher-Goad informed that the
agency would determine reasonable cost of power in the
future when AEA solicited legislative appropriation to
begin the project. The reasonable cost depended on the
amount the state contributed to buy down the cost of power
and fund construction costs. She speculated that a
reasonable cost of power would not provide rate shock to
the utilities. Representative Doogan asked for
clarification. He recapped that the project required a
state subsidy and at some point the legislature was
expected to pay down the costs at an undetermined amount to
provide affordable power.
3:19:08 PM
Ms. Fisher-Goad affirmed. She relayed that AEA's financial
analyst, Seattle Northwest, concluded that a project of
Susitna's magnitude could not recover costs through revenue
(utility rates). The expectation involved a scenario
similar to Bradley Lake Hydroelectric project; funded by 50
percent state participation. She referred to a meeting with
FERC and the congressional delegation in Washington DC. She
learned that through special congressional action the
project was eligible for an IRS waiver for tax exempt
financing.
Representative Wilson believed that the bill might not work
out as well for Anchorage than for Fairbanks. She wondered
how that was reflected in the formula. Ms. Fisher-Goad
responded that the power sales agreement would provide a
wholesale power cost from AEA to the utilities similar to
Bradley Lake. She noted that Bradley Lake Hydro provides
Golden Valley Electric some of its cheapest power. She
added that Anchorage has less expensive power costs.
Representative Wilson wondered whether it would be possible
for Fairbanks to receive more generation from the Susitna
project than Anchorage to hold down rates. Ms. Fisher-Goad
responded that it depended on how much of the capacity the
Fairbanks utility committed to purchase based on their
projected generation needs.
Co-Chair Stoltze offered that he did not know how to define
reasonable cost.
3:23:29 PM
Vice-chair Fairclough questioned the accuracy of the new
fiscal note. She requested to amended the new fiscal note
FN (CED) (4/12/2011 3:00 PM). She advised that the addition
of eight new employees each year was incorrect. She was
uncertain the inter-agency receipts were correctly
appropriated.
Representative Doogan cited FN (CED) (4/11/2011 5:00 PM).
He asked if the $1,763.milliom CIP receipts in FY 12
indicated a transfer of funds to the other fiscal note
(4/12/2011 3:00 PM) FN (CED). Ms. Fisher-Goad affirmed that
a transfer applied to a portion of the funding. She
identified the transfer of $1.125 million in FY 2012 from
AEA inter-agency receipts to AIDEA to fund the positions.
The other project funds remained an AEA appropriation.
Vice-chair Fairclough clarified that the two fiscal notes
relevant to the CS were FN (CED) (4/11/2011 5:00 PM) and
(4/12/2011 3:00 PM) FN (CED).
3:28:14 PM
Co-Chair Stoltze asked if an annual report on the project
was required. Ms. Fisher-Goad replied that she was
expecting to report quarterly.
Representative Edgmon pondered including a reporting
requirement in the legislation. Ms. Fisher-Goad opined that
it was not necessary since the request was on the record.
Representative Edgmon moved Conceptual Amendment 1:
Require AEA to submit an annual report to the
legislature due at the start of each legislative
session.
There being NO OBJECTION, it was so ordered. Conceptual
Amendment 1 was adopted.
Co-Chair Stoltze asked if AEA expected to exceed that
requirement. Ms. Fisher-Goad affirmed.
Representative Gara asked if the fiscal notes appropriated
$67 million from the Railbelt Energy Fund. Ms. Fisher-Goad
responded that the fiscal notes reflected the operating
budget portion of the appropriation for facilities and
staff. The studies and contractual costs remained capital
budget expenditures.
Representative Costello referred to the Alaska Rate Payers
group, who worked for decades on the Susitna project. The
group advocated for alternative legislation. She mentioned
exceptions from the personnel act and changing who retained
the authority to set rates. She offered to share the
information with AEA at a later date. She asked if the
authority was aware of the group and if they might address
the issues in the future.
3:33:25 PM
Ms. Fisher-Goad reported that AEA engaged in frequent
discussions with the rate-payers. She indicated their
position was to create an independent entity to advance the
project. She countered their position was in opposition to
HB 106 which established AEA as the agency to carry the
project. She asserted that AEA was the most experienced
entity to expedite the FERC process. The legislation
reflected the Governor's preferred structure. An
investigation into what a more autonomous agency provided
that AEA cannot was a legitimate policy question for the
future. She pledged continued dialog with the rate-payers.
Co-Chair Stoltze reported for the record that he had a
relative involved in the rate-payers group.
Vice-chair Fairclough MOVED to report CSHB 103(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 103(FIN) was REPORTED out of Committee with a "do
pass" recommendation and with two new fiscal impact notes
by the Department of Commerce, Community and Economic
Development.
3:37:39 PM
AT EASE
4:06:27 PM
RECONVENED
HOUSE BILL NO. 104
"An Act renaming the Alaska performance scholarship
and relating to the scholarship and tax credits
applicable to contributions to the scholarship;
establishing the Alaska performance scholarship
investment fund and the Alaska performance scholarship
award fund and relating to the funds; making
conforming amendments; and providing for an effective
date."
4:06:42 PM
Vice-chair Fairclough listed the four fiscal notes: FN
(REV) (3/29/11); zero fiscal impact, FN (REV) (3/21/11);
zero fiscal impact, FN (EED) (3/23/11); indeterminate
fiscal impact, FN 3 (EED) indeterminate fiscal impact. She
noted a previous hearing (4/7/11) on the bill that allowed
public testimony.
4:09:56 PM
Vice-chair Fairclough MOVED to report CSHB 104(EDC) out of
Committee with individual recommendations and the
accompanying fiscal notes.
Representative Gara OBJECTED.
Co-Chair Stoltze WITHDREW the motion.
Representative Gara MOVED Amendment 1 (27-GH1893\D.5,
Mischel, 4/7/11):
Page 3, following line 8:
Insert a new bill section to read:
"* Sec. 4. AS 14.43.820, as enacted by sec. 5, ch.
14, SLA 2010, is amended by adding a new subsection to
read:
(c) Notwithstanding the eligibility
requirements in (a)(2) - (4) of this section, the
department shall adopt regulations to provide for
the eligibility of a student who has attained a
general education development certificate, and
for waiver or delay of a portion of the core
academic curriculum requirements in (a)(3) of
this section if that portion of the curriculum is
not available to a student at a public school in
the district in which the student resides. To
demonstrate high academic performance for
eligibility under this section, the department
may require a student to
(1) provide alternative minimum
standardized test scores established under this
section;
(2) complete some or all of the core
curriculum requirements in (a)(3) of this section
after graduation; or
(3) provide a measure of academic
achievement equivalent to (2) of this
subsection."
Renumber the following bill sections accordingly.
Page 3, following line 24:
Insert a new bill section to read:
"* Sec. 7. AS 14.43.825, as enacted by sec. 5, ch.
14, SLA 2010, is amended by adding a new subsection to
read:
(g) Notwithstanding the grade-point average
requirements in (a) of this section, the
department shall adopt regulations to provide for
the eligibility of a student who has attained a
general education development certificate."
Renumber the following bill sections accordingly.
Page 8, line 21:
Delete "Section 15"
Insert "Section 17"
Page 8, line 22:
Delete "sec. 6"
Insert "sec. 8"
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Vice-chair Fairclough OBJECTED.
Representative Gara explained the amendment. He identified
the provisions as an "Alternative Pathway" to eligibility
for the merit scholarship. He elaborated that GED
recipients, including some home school students, were not
eligible to participate, and some schools did not offer the
courses required for qualification. He noted that other
states with a merit scholarship program offered an
"alternative pathway"; scholarship eligibility for students
unable to meet the traditional requirements.
Representative Gara cited page 1, line 16 of the amendment.
He informed that the language provided the Department of
Education and Early Development (DEED) the discretion to
impose alternative academic achievement measures equivalent
to core classes to ensure that the student can catch up or
has met the merit level of academic standards.
MIKE HANLEY, COMMISSIONER, DEPARTMENT OF EDUCATION AND
EARLY CHILDHOOD DEVELOPMENT, responded to the amendment. He
noted that the department already allowed exceptions to
traditional diplomas. Diplomas were not required of
homeschool students; course requirements, SAT or ACT scores
were sufficient. WorkKeys scores for technical education
students were accepted and GED without requirements or
restrictions.
4:14:19 PM
Commissioner Hanley continued that only three schools in
the state did not offer the core classes required of the
merit scholarship. The department did not want to punish
students because the courses were not available. The
department had a two year grace period for the students in
the schools. He concluded that an alternative pathway
existed.
Representative Neuman reported that 10 percent of students
in Alaska were home schooled. He asked whether they had the
same ability as public school students to qualify for the
scholarship program. Commissioner Hanley affirmed. Home
school students can verify that they completed the required
courses or use SAT, ACT, or WorkKeys scores as the sole
qualifier. Representative Neuman asked if high school
students acquired credit for taking college level classes.
Commissioner Hanley replied that courses with higher
standards than set for performance scholarships were
accepted.
4:18:05 PM
Representative Wilson spoke against the amendment. She
agreed with the intent but did not want to make exceptions
at this point. She was willing to closely monitor the
results over the years and make allowances as needed. She
trusted the department would provide the information.
Commissioner Hanley noted that regular reporting was a
requirement of the legislation.
Representative Gara responded to testimony by the
commissioner that students were currently allowed to take
required courses during a two-year grace period after
graduation. He argued that the amendment put the same
option into statute and allowed the department to set the
standards. For example, the department could decide to use
standardized test scores, allow for classes after
graduation, or come up with something else. He did not
understand why the department opposed the amendment.
Commissioner Hanley clarified that the mentioned grace
period was built in as the scholarship was implemented over
the next two years; it was not a true grace period.
4:21:03 PM
AT EASE
4:21:16 PM
RECONVENED
A roll call vote was taken on the motion.
IN FAVOR: Guttenberg, Neuman, Costello, Doogan, Edgmon,
Gara, Joule
OPPOSED: Wilson, Fairclough, Stoltze, Thomas
The MOTION PASSED (7/4). Amendment 1 was ADOPTED.
Representative Doogan asked for clarification of the
funding estimate in FN (EED) (3/23/11).
DIANE BARRANS, EXECUTIVE DIRECTOR, POSTSECONDARY EDUCATION
COMMISSION, DEPARTMENT OF EDUCATION AND EARLY DEVELOPMENT,
explained that the Education Committee added a provision to
fund the Alaska Advantage Education Grant (AEG) but did not
stipulate a level of funding for the program. The analysis
section described what full funding would look like based
on the current year applicant pool [$6,969.6 million in FY
12]. She referred to the chart on page 2, of the fiscal
note. She explained that the estimates used were the same
used to fund FY 11 Alaska Performance Scholarship program
(APS). Representative Doogan wanted an actual number in
order to evaluate the program costs. Ms. Barrans stated
that $1.1 million was appropriated for FY 2012. The program
existed for five years and was funded from a variety of
sources but never as a general fund operating expense. She
added that the legislature would determine the level of
funding. Representative Doogan confirmed that full funding
was estimated in the fiscal notes. Ms. Barrans affirmed.
4:25:27 PM
Vice-chair Fairclough recapped that the fiscal notes were
zero or indeterminate. Other legislation was needed to
capitalize the fund.
Representative Doogan replied that he still wanted accurate
costs. He thought that whether the funding mechanism was
split off or attached to HB 106 there was a cost.
Vice-chair Fairclough MOVED to report CSHB 104(FIN) out of
Committee with individual recommendations and the
accompanying fiscal notes. There being NO OBJECTION, it was
so ordered.
CSHB 104(FIN) was REPORTED out of Committee with a "no
recommendation" and with two zero notes by the Department
of Revenue, one indeterminate note by the Department of
Education and Early Development, and previously published
fiscal note: FN3 (EED).
4:27:35 PM
AT EASE
4:31:03 PM
RECONVENED
HOUSE BILL NO. 183
"An Act relating to the Village Safe Water Act."
4:31:11 PM
SHIELA PETERSON, STAFF, SENATOR ALAN DICK, relayed that the
parties involved in the bill's creation determined the CS
was drafted correctly. The legislation expanded the
program, provided a governing body for recipients, and
included the community of Nenana.
LINDSAY WOLTER, ASSISTANT ATTORNEY GENERAL, CIVIL DIVISION,
ENVIRONMENTAL SECTION, DEPARTMENT OF LAW (via
teleconference), understood that all unincorporated
communities were included in the legislation. She did not
have any further concerns.
Vice-chair Fairclough contended that the issue of the
status of tribal organizations was a constitutional issue.
She did not believe that the constitutional issues that had
been raised were included in the CS. Ms. Wolter responded
in the affirmative. All local governments were included in
the bill.
Representative Edgmon spoke with DEC officials. He
confirmed that references to village councils and IRA's
(Indian Reorganization Act communities) in the CS
strengthened the department's ability to procure federal
funds.
Vice-chair Fairclough MOVED to report CS HB 183 (FIN) out
of committee with individual recommendations and the
accompanying fiscal note.
CS HB 183 (FIN) was REPORTED out of committee with a "do
pass" recommendation and with attached previously published
fiscal note: FN 1 (DEC).
SENATE BILL NO. 102
"An Act relating to certain payments made under the
Alaska affordable heating program."
SB 102 was SCHEDULED but not HEARD.
4:37:13 PM
ADJOURNMENT
The meeting was adjourned at 4:37 PM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 103 CS WORKDRAFT 27-GH1822-I 041211.pdf |
HFIN 4/12/2011 1:30:00 PM |
HB 103 |
| HB 103 support.pdf |
HFIN 4/12/2011 1:30:00 PM |
HB 103 |
| SB 102Program Stats DPA Region-Census District- Community.xlsx |
HFIN 4/12/2011 1:30:00 PM |
SB 102 |
| SB 102HAP FUNDING 2008-2011 INCLUDING TRIBES.xlsx |
HFIN 4/12/2011 1:30:00 PM |
SB 102 |
| SB 102Affordable Heating Program Vendor Information (1).docx |
HFIN 4/12/2011 1:30:00 PM |
SB 102 |
| SB 102 conceptual AAHP regulations.docx |
HFIN 4/12/2011 1:30:00 PM |
SB 102 |
| HB103-CCED-NEW AIDEA-04-11-11.pdf |
HFIN 4/12/2011 1:30:00 PM |
HB 103 |
| HB103-CCED-NEW AEA-04-11-11.pdf |
HFIN 4/12/2011 1:30:00 PM |
HB 103 |
| HB 104 AMENDMENT #1.pdf |
HFIN 4/12/2011 1:30:00 PM |
HB 104 |