Legislature(2001 - 2002)

04/20/2001 01:46 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 20, 2001                                                                                           
                          1:46 PM                                                                                               
                                                                                                                                
TAPE HFC 01 - 89, Side A                                                                                                        
TAPE HFC 01 - 89, Side B                                                                                                        
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Williams called the House  Finance Committee meeting                                                                   
to order at 1:59 PM.                                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Eldon Mulder, Co-Chair                                                                                           
Representative Bill Williams, Co-Chair                                                                                          
Representative Con Bunde, Vice-Chair                                                                                            
Representative Eric Croft                                                                                                       
Representative John Davies                                                                                                      
Representative Carl Moses                                                                                                       
Representative Richard Foster                                                                                                   
Representative John Harris                                                                                                      
Representative Bill Hudson                                                                                                      
Representative Ken Lancaster                                                                                                    
Representative Jim Whitaker                                                                                                     
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Wendy  Hall,  Staff,  Senator   Kelly;  Dean  Guaneli,  Chief                                                                   
Assistant Attorney General, Criminal  Division, Department of                                                                   
Law;  Elmer  Lindstrom,  Special   Assistant,  Department  of                                                                   
Health and Social  Services; Russ Webb,  Deputy Commissioner,                                                                   
Department  of Health  and  Social Services;  Randall  Burns,                                                                   
Executive  Director,  Alaska Psychiatric  Institute;  Candace                                                                   
Brower,  Legislative  Liaison,   Department  of  Corrections;                                                                   
Michael  Stark,  Assistant Attorney  General,  Department  of                                                                   
Law;  Caren Robinson,  Chairman, Alaska  Mental Health  Trust                                                                   
Authority.                                                                                                                      
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Albert Taylor, Anchorage; Craig  Campbell, Executive Director                                                                   
of   Planning,  Development   and   Public   Works  for   the                                                                   
Municipality  of  Anchorage; Steve  Planchon,  Alaska  Mental                                                                   
Health   Trust  Authority;   Donald   Mahon,  Regional   Vice                                                                   
President, Alaska Power and Telephone;  Eric Yould, Executive                                                                   
Director,  Alaska  Rural  Electric  Cooperative  Association,                                                                   
Anchorage;   Robert   Wilkinson,   Copper   Valley   Electric                                                                   
Association, Glennallen; Steve  Haagenson, Acting President &                                                                   
CEO for Golden  Valley Electric Association,  Fairbanks; Norm                                                                   
Story, Homer Electric Association;  Joe Cook, Vice President,                                                                   
Cordova  Electric Cooperative  Inc.,  Cordova; Sylvia  Lange,                                                                   
Cordova; Katelyn  Markley, Alaska Industrial  Development and                                                                   
Export Authority (AIDEA).                                                                                                       
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 40     "An Act providing for the revocation of driving                                                                       
          privileges by  a court for a driver  convicted of a                                                                   
          violation  of  traffic laws  in  connection with  a                                                                   
          fatal  motor vehicle  or  commercial motor  vehicle                                                                   
          accident; amending Rules  43 and 43.1, Alaska Rules                                                                   
          of Administration;  and providing for  an effective                                                                   
          date."                                                                                                                
                                                                                                                                
          CSHB 40 (FIN) was REPORTED out of Committee with a                                                                    
          "do  pass" recommendation  and with two  previously                                                                   
          published zero  fiscal notes (#2 and  #3), and with                                                                   
          one previously published fiscal impact note (#1).                                                                     
                                                                                                                                
HB 52     "An Act relating to the Interstate Compact for                                                                        
          Adult  Offender Supervision  and the State  Council                                                                   
          for   Interstate   Adult    Offender   Supervision;                                                                   
          amending  Rules 4  and  24, Alaska  Rules of  Civil                                                                   
          Procedure; and providing for an effective date."                                                                      
                                                                                                                                
          HB 52 was REPORTED out of Committee with a "do                                                                        
          pass"  recommendation   and  with   two  previously                                                                   
          published fiscal impact  notes by the Department of                                                                   
          Corrections (#1 and #2).                                                                                              
                                                                                                                                
HB 76     "An Act authorizing the commissioner of health and                                                                    
          social  services  to  provide  for the  design  and                                                                   
          construction  of psychiatric  treatment  facilities                                                                   
          to   replace   the   facilities   of   the   Alaska                                                                   
          Psychiatric Institute."                                                                                               
                                                                                                                                
          CSHB 76 (FIN) was REPORTED out of Committee with a                                                                    
          "do  pass"  recommendation  and with  a  previously                                                                   
          published  (#1) zero fiscal  note by the  Committee                                                                   
         on Health, Education and Social Services.                                                                              
                                                                                                                                
HB 77     "An Act relating to appropriations for the design                                                                     
          and  construction  of  a  replacement  facility  or                                                                   
          facilities  for  the Alaska  Psychiatric  Institute                                                                   
          and  for  a  grant  to  study  the  feasibility  of                                                                   
          locating  certain health  programs at  the site  of                                                                   
          the  Alaska  Psychiatric Institute;  and  providing                                                                   
          for an effective date."                                                                                               
                                                                                                                                
          HB 77 was HELD in Committee for further                                                                               
          consideration.                                                                                                        
                                                                                                                                
HB 175    "An  Act  making  an appropriation  to  the  Alaska                                                                   
          Industrial  Development  and Export  Authority  for                                                                   
          power  projects;  and  providing for  an  effective                                                                   
          date."                                                                                                                
                                                                                                                                
          HB 175 was heard and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
HB 236    "An Act  relating to the contracting  and financing                                                                   
          authority of the Alaska  Industrial Development and                                                                   
          Export  Authority;  authorizing  the  authority  to                                                                   
          issue  bonds in  a principal  amount not to  exceed                                                                   
          $76,000,000  to  finance the  acquisition,  design,                                                                   
          construction,  inventory, and operation  of natural                                                                   
          gas,  propane  air,   or  manufactured  gas  public                                                                   
          utility facilities;  and providing for an effective                                                                   
          date."                                                                                                                
                                                                                                                                
          HB 236 was REPORTED out of Committee with a "do                                                                       
          pass"  recommendation and  with a  new zero  fiscal                                                                   
          note  by the Department  of Community  and Economic                                                                   
          Development.                                                                                                          
                                                                                                                                
SB 154    "An  Act   relating  to  mental   health  treatment                                                                   
          facilities;  repealing the termination date  of the                                                                   
          mental  health  treatment assistance  program;  and                                                                   
          providing for an effective date."                                                                                     
                                                                                                                                
          SB  154 was REPORTED  out of  Committee with  a "do                                                                   
          pass"   recommendation   and  with   a   previously                                                                   
          published   fiscal   impact   note  (#1)   by   the                                                                   
         Department of Health and Social Services.                                                                              
HOUSE BILL NO. 40                                                                                                             
                                                                                                                                
     "An  Act   providing  for  the  revocation   of  driving                                                                   
     privileges  by  a court  for  a  driver convicted  of  a                                                                   
     violation  of traffic  laws in connection  with  a fatal                                                                   
     motor  vehicle  or commercial  motor  vehicle  accident;                                                                   
     amending   Rules   43   and  43.1,   Alaska   Rules   of                                                                   
     Administration; and providing for an effective date."                                                                      
                                                                                                                                
ALBERT  TAYLOR,  ANCHORAGE testified  via  teleconference  in                                                                   
support of  HB 40.  He noted that  a negligent driver  killed                                                                   
his only child. He stressed the need for accountability.                                                                        
                                                                                                                                
Representative John Davies MOVED to ADOPT Amendment 1:                                                                          
                                                                                                                                
     Page 2, line 3                                                                                                             
     Delete:                                                                                                                    
     "a preponderance of the evidence"                                                                                          
     Substitute:                                                                                                                
     "clear and convincing evidence"                                                                                            
                                                                                                                                
     Page 2, lines 7-8                                                                                                          
     Delete:                                                                                                                    
     "(3)  the  violation  of  traffic  laws  by  the  person                                                                   
     contributed to the accident."                                                                                              
     Insert:                                                                                                                    
     "(3) the violation  of traffic laws by the  person was a                                                                   
     significant contributing cause of the accident."                                                                           
                                                                                                                                
Representative John  Davies noted that the Department  of Law                                                                   
drafted the amendment  to address his concerns  regarding the                                                                   
standard  of   proof.  The   amendment  clarifies   that  the                                                                   
violation  must be a  significant contributing  cause  of the                                                                   
accident.                                                                                                                       
                                                                                                                                
DEAN  GUANELI,  CHIEF ASSISTANT  ATTORNEY  GENERAL,  CRIMINAL                                                                   
DIVISION,  DEPARTMENT   OF  LAW  spoke  in   support  of  the                                                                   
amendment. He  did not feel that  the increase in  the burden                                                                   
of  proof  to clear  and  convincing  evidence would  make  a                                                                   
practical   difference.   The   additional  language   of   a                                                                   
"significant  contribution"  allows the  judge  to take  into                                                                   
account the relative faults.                                                                                                    
                                                                                                                                
There being NO OBJECTION, Amendment 1 was adopted.                                                                              
                                                                                                                                
Representative Hudson  MOVED to report  CSHB 40 (FIN)  out of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
CSHB 40 (FIN) was REPORTED out  of Committee with a "do pass"                                                                   
recommendation and with two previously  published zero fiscal                                                                   
notes (#2 and  #3), and with one previously  published fiscal                                                                   
impact note (#1).                                                                                                               
HOUSE BILL NO. 236                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the  contracting  and  financing                                                                   
     authority  of  the  Alaska  Industrial  Development  and                                                                   
     Export  Authority; authorizing  the  authority to  issue                                                                   
     bonds in  a principal amount  not to exceed  $76,000,000                                                                   
     to  finance   the  acquisition,  design,   construction,                                                                   
     inventory,  and operation of  natural gas, propane  air,                                                                   
     or  manufactured  gas  public  utility  facilities;  and                                                                   
     providing for an effective date."                                                                                          
                                                                                                                                
Representative  Harris   MOVED  to  report  HB   236  out  of                                                                   
Committee with the accompanying fiscal note.                                                                                    
                                                                                                                                
Representative John  Davies spoke in support of  the bill but                                                                   
pointed  out that the  legislation provides  approval  of the                                                                   
bond issuance  contingent  on the due  diligence findings  of                                                                   
Alaska Industrial  Development and Export  Authority (AIDEA).                                                                   
He asked AIDEA to communicate  with the Legislature regarding                                                                   
their due  diligence findings.  Co-Chair Williams  agreed and                                                                   
noted  that   he  would  send   a  communication   to  AIDEA.                                                                   
Representative Lancaster  agreed with Representative  Davies'                                                                   
concerns  and maintained  that  it is  imperative that  AIDEA                                                                   
tell the Legislature  how they are going to  proceed with the                                                                   
bonds.                                                                                                                          
                                                                                                                                
There being NO OBJECTION, HB 236 was moved from Committee.                                                                      
                                                                                                                                
HB  236  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and  with  a  new zero  fiscal  note  by  the                                                                   
Department of Community and Economic Development.                                                                               
SENATE BILL NO. 154                                                                                                           
                                                                                                                                
     "An Act relating to mental  health treatment facilities;                                                                   
     repealing  the termination  date  of  the mental  health                                                                   
     treatment  assistance  program;  and  providing  for  an                                                                   
     effective date."                                                                                                           
                                                                                                                                
WENDY HALL, STAFF, SENATOR KELLY  spoke in support of SB 154.                                                                   
She  observed  that  the  bill repeals  the  sunset  date  on                                                                   
previously passed  legislation, which created  the Designated                                                                   
Evaluation  Program.  She  maintained   that  the  Designated                                                                   
Evaluation Program  is a critical component  of mental health                                                                   
services in  Alaska, particularly  for indigent persons  with                                                                   
mental illnesses who are being  civilly committed or who meet                                                                   
the criteria for civil commitment.  Through this program many                                                                   
poor people with mental illnesses  who have not qualified for                                                                   
Medicaid are able to receive services  in community hospitals                                                                   
around the state.  Without the program it would  be necessary                                                                   
to  transport   many   clients  in  crisis   to  the   Alaska                                                                   
Psychiatric Institute. She observed  that the previous sunset                                                                   
date was placed  on the program as a result  of concerns that                                                                   
the funding would cease to exist,  but funding has continued.                                                                   
                                                                                                                                
ELMER LINDSTROM, SPECIAL ASSISTANT,  DEPARTMENT OF HEALTH AND                                                                   
SOCIAL SERVICES  testified in support of the  legislation. He                                                                   
explained that  the department  had just received  a one-time                                                                   
federal  grant  at  the time  the  original  legislation  was                                                                   
adopted. Another source of non-general  funds have since been                                                                   
identified. Federal  DSH funds  through the Medicaid  program                                                                   
have been  utilized as  an on going  stream of revenue.  They                                                                   
are  expected   to  continue  to  support  the   program.  He                                                                   
explained  the fiscal note  and pointed  out that the  fiscal                                                                   
cost is included in the Senate and House FY02 budgets.                                                                          
                                                                                                                                
Mr. Lindstrom  gave examples of  the success of  the program.                                                                   
The  number  of   expected  transports  to  API   has  fallen                                                                   
dramatically from 75 to less than 10.                                                                                           
                                                                                                                                
Representative  Davies   MOVED  to  report  SB   154  out  of                                                                   
Committee with the accompanying  fiscal note. Co-Chair Mulder                                                                   
OBJECTED for the purpose of a  question. He asked how success                                                                   
has been defined and when the program was established.                                                                          
                                                                                                                                
Mr. Lindstrom  noted that the  program has been on  the books                                                                   
for many years. Legislation was  enacted two years ago, which                                                                   
defined eligibility  and outlined  how the payments  would be                                                                   
made. The  key measure of success  has been the  reduction in                                                                   
transports to API and the ability to treat clients locally.                                                                     
                                                                                                                                
Co-Chair Mulder  acknowledged the clinical value  of treating                                                                   
locally and questioned the cost.  Mr. Lindstrom did not think                                                                   
that  it was  more expensive  to operate  locally. He  stated                                                                   
that he  would prepare a  cost comparison. He  clarified that                                                                   
these clients  are not Medicaid  eligible and  explained that                                                                   
clients  between 21  and 65  are not  Medicaid eligible.  The                                                                   
income  eligibility is  185 percent  of  the federal  poverty                                                                   
level.                                                                                                                          
                                                                                                                                
There being NO OBJECTION, SB 154 was moved from Committee.                                                                      
                                                                                                                                
SB  154  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation and with a previously  published fiscal impact                                                                   
note (#1) by the Department of Health and Social Services.                                                                      
HOUSE BILL NO. 76                                                                                                             
                                                                                                                                
     "An  Act  authorizing  the commissioner  of  health  and                                                                   
     social   services  to   provide  for   the  design   and                                                                   
     construction  of  psychiatric  treatment  facilities  to                                                                   
     replace  the   facilities  of  the   Alaska  Psychiatric                                                                   
     Institute."                                                                                                                
                                                                                                                                
Co-Chair Mulder MOVED to ADOPT  proposed committee substitute                                                                   
work  draft 22-LS0349\P,  Utermohle 4/20/01.  There being  NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
RUSS  WEBB, DEPUTY  COMMISSIONER,  DEPARTMENT  OF HEALTH  AND                                                                   
SOCIAL SERVICES  testified in support of the  legislation. He                                                                   
stated that  the legislation would  be an effective  means to                                                                   
replace  API,  which has  been  a long-standing  problem.  He                                                                   
noted  that the  Department of  Health  and Social  Services,                                                                   
Alaska Mental  Health Trust Authority, University  of Alaska,                                                                   
and  Providence  Medical  Center   have  worked  together  to                                                                   
develop  better  land use  in  the  area. The  Department  of                                                                   
Health  and Social  Services will  not use  the old  facility                                                                   
under  their site  plan. He  pointed out  that the  committee                                                                   
substitute reduces cost.                                                                                                        
                                                                                                                                
Co-Chair Mulder  explained that the objective  was to provide                                                                   
a price  tag that the state  could afford. The  original cost                                                                   
was  $56  million   dollars.  A  ranch  style   approach  was                                                                   
consolidated into a two story,  which dropped the cost to $45                                                                   
million dollars.  A competitively  bid design build  achieved                                                                   
an additional  savings for  a total  cost of $41.744  million                                                                   
dollars. A  little over  $19 million  dollars remains  from a                                                                   
previous  appropriation  to  the  Department  of  Health  and                                                                   
Social  Services. The  Alaska Mental  Health Trust  Authority                                                                   
has made available  an additional $3 million  dollars to help                                                                   
with construction  costs. An additional $3.5  million dollars                                                                   
in interest  earnings from the  remaining $19  million dollar                                                                   
appropriation would be reappropriated.  The remaining project                                                                   
cost would be  $16 million dollars, which would  be paid with                                                                   
the issuance  of a  15-year note  of $1.6  million dollars  a                                                                   
year. He observed that it would  not cost the state "any cash                                                                   
out of the pocket."                                                                                                             
                                                                                                                                
Representative  Hudson asked  if the  debt retirement  on the                                                                   
bond issuance would be offset with reduced energy costs.                                                                        
                                                                                                                                
RANDALL   BURNS,  EXECUTIVE   DIRECTOR,  ALASKA   PSYCHIATRIC                                                                   
INSTITUTE  noted  that  the  current  heating  cost  is  $300                                                                   
thousand dollars  a year. He felt confident  that these costs                                                                   
would be reduced.                                                                                                               
                                                                                                                                
Representative  Hudson  suspected  that  the  cost  would  be                                                                   
reduced. Mr.  Burns observed that  the boiler  and mechanical                                                                   
systems are not  very efficient. He thought  that there would                                                                   
be significant savings within the utilities.                                                                                    
                                                                                                                                
Co-Chair  Mulder  noted that  the  proposal  has brought  the                                                                   
competing interests  of the Department  of Health  and Social                                                                   
Services,  Alaska Mental Health  Trust Authority,  University                                                                   
of Alaska, Providence Medical  Center and the Municipality of                                                                   
Anchorage together. All the parties  signed the memorandum of                                                                   
agreement.  He  referred to  item  #8  of the  memorandum  of                                                                   
agreement.                                                                                                                      
                                                                                                                                
Co-Chair Mulder  referred to the  legislation as  it pertains                                                                   
to removal of the facility:                                                                                                     
                                                                                                                                
     The  Memorandum  of Understanding  contemplates  a  road                                                                   
     extension  through the  property  presently occupied  by                                                                   
     the  Alaska  Psychiatric  Institute facility.  The  road                                                                   
     construction  will  be  addressed  separately,  possibly                                                                   
     through federal funding.                                                                                                   
                                                                                                                                
Co-Chair Mulder clarified that  the demolition costs were not                                                                   
included in the legislation and  are estimated at $13 million                                                                   
dollars. A  fiscal note would  include the demolition  costs.                                                                   
He  emphasized   the  importance  of  timing.   He  expressed                                                                   
confidence that federal funding  would be forthcoming for the                                                                   
demolition.                                                                                                                     
                                                                                                                                
CAREN  ROBINSON,   CHAIRMAN,   ALASKA  MENTAL  HEALTH   TRUST                                                                   
AUTHORITY provided  information relating to  the legislation.                                                                   
She  discussed  the memorandum  of  agreement,  Track E.  She                                                                   
noted that a  due diligence finding would be  provided. It is                                                                   
the intent  to carry  forward and utilize  the land  with the                                                                   
understanding that  when the University  of Alaska  is ready,                                                                   
they would have the first right to purchase the land.                                                                           
                                                                                                                                
Representative  John  Davies   noted  that  the  university's                                                                   
concern is that  there could be some action  taken in respect                                                                   
to  the land  that  would make  it  not in  the  university's                                                                   
interest  to subsequently  acquire it.  The university  would                                                                   
like  the Trust  to  work with  them regarding  actions  that                                                                   
might be taken  which could be negative in  respect to future                                                                   
acquisition.                                                                                                                    
                                                                                                                                
Ms. Robinson stressed the importance  of working with all the                                                                   
involved individuals.  She noted  that they have  worked with                                                                   
the University of Alaska and felt  that they would continue a                                                                   
close relationship  to assure that the lands  are utilized in                                                                   
an appropriate way.                                                                                                             
                                                                                                                                
Co-Chair  Mulder observed  that the  University is  concerned                                                                   
that the  land could be used  to expand the  McLaughlin Youth                                                                   
facility.  He stressed  the importance  of  working with  the                                                                   
University  on   any  future  activities  that   utilize  the                                                                   
property.                                                                                                                       
                                                                                                                                
Representative  Hudson  noted  that there  are  some  private                                                                   
landholders and  questioned if they have been  contacted. Ms.                                                                   
Robinson  acknowledged  that South  central  Foundation  owns                                                                   
some  of the  adjoining  property. There  is  also a  Respite                                                                   
Center on  parcel D. The  city might  want to build  a health                                                                   
facility  on  parcel  E. There  are  concerns  regarding  the                                                                   
neighborhood.                                                                                                                   
                                                                                                                                
Representative  Croft referred  to page  3, line  8 - 9:  The                                                                   
replacement  facility  must include  a  forensic  psychiatric                                                                   
unit.  Mr. Webb  responded  that the  state  is committed  to                                                                   
maintaining the forensic unit, but it will not be expanded.                                                                     
                                                                                                                                
TAPE HFC 01 - 89, Side B                                                                                                      
HOUSE BILL NO. 77                                                                                                             
                                                                                                                                
     "An Act  relating to appropriations  for the  design and                                                                   
     construction  of a  replacement  facility or  facilities                                                                   
     for the Alaska Psychiatric  Institute and for a grant to                                                                   
     study  the   feasibility  of  locating   certain  health                                                                   
     programs   at  the  site   of  the  Alaska   Psychiatric                                                                   
     Institute; and providing for an effective date."                                                                           
                                                                                                                                
Co-Chair Mulder  explained that  funding is contained  in the                                                                   
capital budget  and a new  appropriation bill is  not needed.                                                                   
Authorization is provided in HB 76.                                                                                             
HOUSE BILL NO. 175                                                                                                            
                                                                                                                                
     "An   Act  making   an  appropriation   to  the   Alaska                                                                   
     Industrial  Development and  Export Authority  for power                                                                   
     projects; and providing for an effective date."                                                                            
                                                                                                                                
STEVE HAAGENSON,  ACTING  PRESIDENT &  CEO FOR GOLDEN  VALLEY                                                                   
ELECTRIC ASSOCIATION,  FAIRBANKS testified in support  of the                                                                   
legislation.                                                                                                                    
                                                                                                                                
     The  upgrade   of  the  Anchorage  to   Fairbanks  power                                                                   
     transmission  intertie,  to  230  kilowatts  is  a  very                                                                   
     important project for Interior  Alaska. This project, at                                                                   
     a minimum, should, involve  the construction of a second                                                                   
     transmission  line  between Douglas  Substation  located                                                                   
     near Willow  and Teeland Substation located  in Wasilla.                                                                   
     The  new  transmission  line  would  ho  constructed  to                                                                   
     operate  at 230 thousand  volts,  and would provide  the                                                                   
     source,  for converting the  remainder of the  Anchorage                                                                   
     to Fairbanks intertie to 230 thousand volts operation.                                                                     
                                                                                                                                
     The  existing   line  from  Douglas  to   Teeland  is  a                                                                   
     bottleneck  for  delivery  of power  from  Anchorage  to                                                                   
     Fairbanks.  The  electrical   capacity  to  Healy  would                                                                   
     increase   from  70  megawatts   to  approximately   130                                                                   
     megawatts,  after project  completion.  The increase  in                                                                   
     transfer capacity  would provide access to  both now and                                                                   
     existing gas-fired cogeneration in Anchorage.                                                                              
                                                                                                                                
     Power can  flow either direction Oil  these transmission                                                                   
     lines.  After the  natural-gas  pipeline is  constructed                                                                   
     the  transmission  capacity  increase  could  allow  for                                                                   
     delivery  of  130  megawatts of  North-Slope  gas  fired                                                                   
     power to the Anchorage bowl.                                                                                               
                                                                                                                                
     The  increased capacity  will also  provide a method  to                                                                   
     share spinning reserves,  which are not always available                                                                   
     to Fairbanks.                                                                                                              
                                                                                                                                
     The  existing  line  from  Douglas to  Teeland  has  had                                                                   
     numerous  faults due to  insulator flashovers  and other                                                                   
     causes.  Every   time  this  line  tripsa    significant                                                                   
                                                                                                                                
     portion,  if not  all, of  the power  in Fairbanks  goes                                                                   
     off.  The  addition of  a  second circuit  will  improve                                                                   
     reliability between Teeland  and Douglas by providing an                                                                   
     alternative path during faults.                                                                                            
                                                                                                                                
     The addition  of a second transmission line  will reduce                                                                   
     electrical  transmission   losses  between  Teeland  and                                                                   
     Douglas,  as  will  the   voltage  conversion  from  138                                                                   
     kilovolts  to   230  kilovolts  will,  for   the  entire                                                                   
     Anchorage in Fairbanks transmission line.                                                                                  
                                                                                                                                
Representative  Davies clarified  that  the estimated  amount                                                                   
needed to build the 26 miles between  Teeland and Douglas and                                                                   
convert  other substations  to 230 kilovolts  is $24  million                                                                   
dollars.                                                                                                                        
                                                                                                                                
ROBERT  WILKINSON, CEO,  COPPER  VALLEY ELECTRIC  ASSOCIATION                                                                   
(CVEA), GLENNALLEN  testified  via teleconference in  support                                                                   
of the legislation:                                                                                                             
                                                                                                                                
     In 1993, the 18th Alaska  Legislature appropriated a $35                                                                   
     million,  50-year, zero-interest  loan  for an  intertie                                                                   
     project.  The purpose  of the  loan was  to benefit  the                                                                   
     region by lowering electrical rates.     After      much                                                                   
     effort  and expense  the  intertie project  ground to  a                                                                   
     halt in  1996. Instead CVEA  constructed a state  of the                                                                   
     art  combustion   turbine  cogeneration   project.  That                                                                   
     project has  numerous benefits. It  is high tech,  it is                                                                   
     green, and  it turns  Alaska crude into  kilowatt-hours.                                                                   
     It also  adds five megawatts  of generating  capacity to                                                                   
     Copper Valley's  system. Having  said that,  the project                                                                   
     does nothing  to lower the high cost of  electricity for                                                                   
     the  region.  Copper  Valley's  request  accomplishes  a                                                                   
     number  of things.  It reduces  the fixed  costs of  the                                                                   
     Cogeneration  project. It  replaces  30-year old  diesel                                                                   
     fired  units, thereby improving  system reliability  and                                                                   
     air  quality.  It  also  reduces  fuel  and  maintenance                                                                   
     expenses.  In addition, a  project, which recovers  heat                                                                   
     from  the  Glennallen  diesel plant  to  reduce  heating                                                                   
     expense for the Copper River  School District Glennallen                                                                   
     schools.  Finally, it reimburses  Copper Valley  for the                                                                   
     DCRA   intertie  feasibility   study  required   by  the                                                                   
     Legislature.                                                                                                               
                                                                                                                                
NORM  STORY,   HOMER  ELECTRIC   ASSOCIATION  testified   via                                                                   
teleconference in  support of the legislation.  He noted that                                                                   
Homer  Electric's  appropriation  request  would  replace  an                                                                   
underwater  cable that  spans 3.8 miles  across Kachemak  Bay                                                                   
from Homer  to the  Southside of the  bay [McKeon  Flats]. It                                                                   
would also  replace four  backup diesel  generators  that are                                                                   
approximately  50  years old,  which  are used  during  power                                                                   
outages.                                                                                                                        
                                                                                                                                
Mr.  Story  maintained  that  it is  critical  that  the  700                                                                   
consumers in villages south of  Kachemak Bay continue to have                                                                   
access  to  reliable  and  affordable   electric  power.  The                                                                   
underwater cable  is the only access to the  electrical grid.                                                                   
The people in  these communities are doing their  part now to                                                                   
keep electric costs  down. The average consumer  in this area                                                                   
uses only 440-kilowatt hours per  month per consumer compared                                                                   
to almost 700-kilowatt  hours per consumer north  of the bay.                                                                   
He  noted  that  the general  membership  of  Homer  Electric                                                                   
Association  has  always  subsidized the  cost  of  providing                                                                   
service to these communities.  In the absence of this subsidy                                                                   
the villages  would probably receive Power  Cost Equalization                                                                   
bonds or some other assistance.  The calculated rate [without                                                                   
subsidy] would  be .20  cents a  kilowatt-hour as opposed  to                                                                   
the  current cost  of .11  cents. The  costs associated  with                                                                   
replacement  of the  cable and  the  diesel generators  would                                                                   
have a catastrophic  impact on the electrical  rates in these                                                                   
villages.  Recovering   costs  in  these   small  communities                                                                   
endangers their  already fragile economy. They  cannot afford                                                                   
the  additional  .5 cents  a  kilowatt-hour.  A zero  percent                                                                   
interest loan  repaid over 25  years would greatly  assist in                                                                   
lessening the impacts to villages south of the bay.                                                                             
                                                                                                                                
JOE COOK, VICE PRESIDENT, CORDOVA  ELECTRIC COOPERATIVE INC.,                                                                   
CORDOVA testified  via teleconference  in support of  HB 175.                                                                   
The Power  Creek Hydroelectric  project has been  a community                                                                   
priority for  the past four years  and will be  the salvation                                                                   
of Cordova.  Funding is  critical, as  it will have  positive                                                                   
long-term effects on Cordova's  economy, due to reductions in                                                                   
electrical power rates, which  would lower the cost-of-living                                                                   
and the cost-of-doing business  in Cordova. Lower power costs                                                                   
would  improve   operating  conditions  in   the  community's                                                                   
economic sectors and increase job opportunities.                                                                                
                                                                                                                                
SYLVIA  LANGE,   CORDOVA  testified  via   teleconference  in                                                                   
support  of HB  175. She  noted that  as an owner  of a  fish                                                                   
processor facility,  that the  single greatest impediment  to                                                                   
economic  diversity and  survival is  the exorbitant  cost of                                                                   
electricity.  Electric rates  including  fuel surcharges  and                                                                   
taxes were over .30 cents a kilowatt-hour  as compared to .04                                                                   
cents  an  hour in  Seattle.  She  maintained that  they  are                                                                   
forced  to send  their product  elsewhere  for "value  added"                                                                   
processing.                                                                                                                     
                                                                                                                                
Representative  Ken Lancaster,  Sponsor testified in  support                                                                   
of  HB  175.   He  clarified  that  the   Anchorage/Fairbanks                                                                   
Transmission Line Bottleneck project  is a state project. The                                                                   
Power Creek  Hydropower  project in Cordova  would provide  a                                                                   
payback of approximately  $600 thousand dollars.  He observed                                                                   
that he will have a technical  amendment to add back language                                                                   
that was inadvertently deleted.  The Railbelt Energy Fund was                                                                   
the initial fund  source. The legislation was  changed in the                                                                   
House Labor and  Commerce Committee to fund  the project from                                                                   
the Constitutional Budget Reserve.                                                                                              
                                                                                                                                
In  response   to  a   question  by  Representative   Hudson,                                                                   
Representative  Lancaster  clarified   that  there  would  be                                                                   
sufficient funding  in the Railbelt  Energy Fund to  fund the                                                                   
projects. He noted  that $71 million dollars  of interest has                                                                   
accrued  since 1973.  However,  it was  felt  that the  money                                                                   
should remain  in the  fund to  be used  as leverage  or seed                                                                   
money when the gas pipeline comes to fruition.                                                                                  
                                                                                                                                
Representative  Croft clarified  that there is  approximately                                                                   
$80 million dollars  in the Fund. The appropriations  [in the                                                                   
legislation] total $62 million dollars.                                                                                         
                                                                                                                                
In  response   to  a   question  by  Representative   Davies,                                                                   
Representative  Lancaster clarified  that the  appropriations                                                                   
would be  no interest  loans. He noted  that the  $25 million                                                                   
dollars  for  the Anchorage/Fairbanks   intertie would  be  a                                                                   
state project and the costs would be recovered.                                                                                 
                                                                                                                                
DONALD  MAHON,  REGIONAL  VICE PRESIDENT,  ALASKA  POWER  AND                                                                   
TELEPHONE  testified via  teleconference  in  support of  the                                                                   
legislation. He noted that two  of the communities they serve                                                                   
are  on   stand-alone  high   cost  diesel  generation.   The                                                                   
Tok/Chistochina  Transmission   Intertie  would   reduce  the                                                                   
energy cost for these communities by .15 cents a kilowatt-                                                                      
hour and provide central station  power for an additional 100                                                                   
customers  along the  highway.  He maintained  that it  makes                                                                   
good sense to tie these communities to the Tok power plant.                                                                     
                                                                                                                                
ERIC  YOULD,   EXECUTIVE  DIRECTOR,  ALASKA   RURAL  ELECTRIC                                                                   
COOPERATIVE    ASSOCIATION,     ANCHORAGE    testified    via                                                                   
teleconference  in support of  HB 175.  He observed  that the                                                                   
Board  expressed strong  support for  HB 175.  He added  that                                                                   
Chugach Electrical  Association  and the Anchorage  Municipal                                                                   
Light  and Power  Association  also support  the project.  He                                                                   
asked why the appropriation fund source was changed.                                                                            
                                                                                                                                
Representative Hudson asked the  affect of the legislation on                                                                   
Power Cost Equalization.                                                                                                        
                                                                                                                                
Mr.  Yould responded  that  the Cordova  project  would be  a                                                                   
grant  in  exchange  for  relinquishing   their  annual  $600                                                                   
thousand  dollar PCE  grant. The  original project  structure                                                                   
would have  reduce the Chistochina  Mine's PCE  amount. Under                                                                   
the long-term,  low interest  loan, power  costs for  Cordova                                                                   
would  be  lower  but they  would  continue  to  receive  PCE                                                                   
adjustments.                                                                                                                    
                                                                                                                                
Representative  John  Davies  asked  what  use  the  Railbelt                                                                   
Energy Fund would be put to in regards to the gas pipeline.                                                                     
                                                                                                                                
KATELYN  MARKLEY, ALASKA  INDUSTRIAL  DEVELOPMENT AND  EXPORT                                                                   
AUTHORITY (AIDEA) testified via  teleconference in support of                                                                   
the  legislation. She  noted that  HB 238  would address  the                                                                   
concerns  of AIDEA.  The  Alaska Industrial  Development  and                                                                   
Export Authority (AIDEA) felt  that funding should go through                                                                   
the  Alaska  Energy  Authority.   She  stated  that  all  the                                                                   
projects have merit.                                                                                                            
                                                                                                                                
HB  175  was   heard  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
HOUSE BILL NO. 52                                                                                                             
                                                                                                                                
     "An  Act relating  to the Interstate  Compact for  Adult                                                                   
     Offender   Supervision  and   the   State  Council   for                                                                   
     Interstate Adult Offender  Supervision; amending Rules 4                                                                   
     and 24, Alaska  Rules of Civil Procedure;  and providing                                                                   
     for an effective date."                                                                                                    
                                                                                                                                
CANDACE   BROWER,   LEGISLATIVE    LIAISON,   DEPARTMENT   OF                                                                   
CORRECTIONS  provided information  on HB  52. She noted  that                                                                   
the legislation  would repeal the current  Interstate Compact                                                                   
for  adult offender  supervision and  replace it  with a  new                                                                   
Compact. The old  compact was enacted nationally  in 1937 and                                                                   
in Alaska  in 1957.  The compact  governs the  state-to-state                                                                   
transfer and supervision of parolees  and probationers. It is                                                                   
a  reciprocal  agreement  to exchange  these  persons  across                                                                   
state  lines and  continue  needed supervision.  The  current                                                                   
compact is  old and outdated.  There are currently  2 million                                                                   
probationers  and  parolees  nationwide.  She noted  that  if                                                                   
Alaska  were one of  the first  states to  enact the  compact                                                                   
that it would have a voice in  decisions. The current compact                                                                   
is  not  much  more  than  a  gentleman's  agreement  between                                                                   
states. There  is no mechanism  for acquiring  or maintaining                                                                   
routine  data   or  structure  to  adopt  rules   to  enforce                                                                   
compliance,    or    adequately   consider    victims.    The                                                                   
restructuring provides  more oversight at state  and national                                                                   
levels and promotes communications  between states. Offenders                                                                   
that  cross  state   lines  are  overseen  by   thousands  of                                                                   
different  parole  and probation  officers  operating  within                                                                   
hundreds of different agencies.  This fragmented system makes                                                                   
it difficult  to account for  offenders. The compact  creates                                                                   
an effective  management system that addresses  public safety                                                                   
concerns  and  offender  accountability.  There have  been  a                                                                   
variety of entities  working on the legislation.  The compact                                                                   
would go into effect  when it has been enacted  by 35 states.                                                                   
The department  feels that it is  important to be one  of the                                                                   
first 35 states  to enact the legislation in order  to have a                                                                   
voice in the rule making process.                                                                                               
                                                                                                                                
Representative   John  Davies   spoke  in   support  of   the                                                                   
legislation   and  stressed   the   importance  of   Alaska's                                                                   
participation.                                                                                                                  
                                                                                                                                
Representative  Whitaker asked if  any states indicated  that                                                                   
they would  refuse involvement.  Ms. Brower pointed  out that                                                                   
many  of the  Western states  have  enacted the  legislation.                                                                   
Fees are based on population and  volume. Alaska exports more                                                                   
offenders than it imports.                                                                                                      
                                                                                                                                
Representative Hudson  asked if there is  anything comparable                                                                   
with  Canada. Ms.  Brower  stated that  there  is no  similar                                                                   
agreement with Canada.                                                                                                          
                                                                                                                                
In  response  to  a question  by  Representative  Croft,  Ms.                                                                   
Brower  observed  that  there  are 343  Alaskan  parolees  or                                                                   
probationers  being supervised outside  of Alaska.  There are                                                                   
220  parolees   or  probationers  from  other   states  being                                                                   
supervised in Alaska.                                                                                                           
                                                                                                                                
MICHAEL STARK, ASSISTANT ATTORNEY  GENERAL, DEPARTMENT OF LAW                                                                   
provided information on the legislation.  He pointed out that                                                                   
there  is no way  for the  state to  enforce rule  violations                                                                   
under  the current  compact.  The  new compact  will  provide                                                                   
enforcement  mechanisms. He  stressed the  need to prevent  a                                                                   
dumping of parolees  or probationers. The compact  is looking                                                                   
at the establishment  of a national registry  system to track                                                                   
all parolees or  probationers outside of their  states. There                                                                   
would  be an  annual report.  Alaska would  have recourse  to                                                                   
require other states to recall  parolees or probationers that                                                                   
are not authorized in Alaska.                                                                                                   
                                                                                                                                
Representative  John Davies  MOVED  to report  HB  52 out  of                                                                   
Committee with  the accompanying fiscal note.  There being NO                                                                   
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
HB  52  was  REPORTED  out of  Committee  with  a  "do  pass"                                                                   
recommendation  and  with  two  previously  published  fiscal                                                                   
impact notes by the Department of Corrections (#1 and #2).                                                                      
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 3:16 p.m.                                                                                          

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