Legislature(2007 - 2008)

08/02/2008 02:16 PM FIN


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                  HOUSE FINANCE COMMITTEE                                                                                       
                       August 2, 2008                                                                                           
                         2:16 P.M.                                                                                              
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 2:16:20 PM.                                                                                                          
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Mike Chenault, Co-Chair                                                                                          
Representative Kevin Meyer, Co-Chair                                                                                            
Representative Bill Stoltze, Vice-Chair                                                                                         
Representative Harry Crawford                                                                                                   
Representative Richard Foster                                                                                                   
Representative Les Gara                                                                                                         
Representative Mike Hawker                                                                                                      
Representative Mike Kelly                                                                                                       
Representative Mary Nelson                                                                                                      
Representative Bill Thomas Jr.                                                                                                  
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Reggie Joule                                                                                                     
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Bob   Roses;  Representative   Bryce  Edgmon;                                                                   
Representative David Guttenberg;  Representative Andrea Doll;                                                                   
Representative Woodie  Salmon; Representative  Max Gruenberg;                                                                   
Representative  Paul  Seaton; Representative  Max  Gruenberg;                                                                   
Representative  Jay  Ramras;  Representative  Sharon  Cissna;                                                                   
Representative  Beth  Kerttula;  Senator Con  Bunde;  Suzanne                                                                   
Armstrong,  Staff, Representative  Kevin  Meyer; David  Teal,                                                                   
Director,  Legislative   Finance  Division;   Randall  Ruaro,                                                                   
Special  Assistant, Office  of the  Governor; Jerry  Burnett,                                                                   
Director, Division of Administrative  Services, Department of                                                                   
Revenue; Sarah  Fisher-Goad, Deputy  Director of  Operations,                                                                   
Alaska  Industrial  Development   and  Export  Authority  and                                                                   
Alaska Energy  Authority, Department  of Commerce,  Community                                                                   
and Economic  Development; Amanda  Ryder, Director,  Division                                                                   
of   Administrative   Services,   Department   of   Commerce,                                                                   
Community and Economic Development;  Karen Rehfeld, Director,                                                                   
Office  of  Management  and Budget;  Frank  Richards,  Deputy                                                                   
Commissioner of  Highways & Public Facilities,  Department of                                                                   
Transportation   and    Public   Facilities;    Pat   Galvin,                                                                   
Commissioner,  Department  of   Revenue;  Tony  Palmer,  Vice                                                                   
President,  Alaska  Business  Development,  TransCanada;  Tom                                                                   
Irwin, Commissioner,  Department of Natural  Resources; Clark                                                                   
Bishop,  Commissioner,  Department  of  Labor  and  Workforce                                                                   
Development;   Larry  Ledoux   Commissioner,  Department   of                                                                   
Education  and Early  Development;  Marty Rutherford,  Deputy                                                                   
Commissioner, Department of Natural Resources                                                                                   
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Clyde   (Ed)  Sniffen   Jr.,   Assistant  Attorney   General,                                                                   
Department  of  Law;  Tara Jollie,  Director,  Community  and                                                                   
Regional  Affairs,  Department  of  Commerce,  Community  and                                                                   
Economic Development;                                                                                                           
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 4001   An Act making supplemental  appropriations, capital                                                                   
          appropriations,    reappropriations,   and    other                                                                   
          appropriations;     making    appropriations     to                                                                   
          capitalize  a fund; and providing for  an effective                                                                   
          date.                                                                                                                 
                                                                                                                                
          HB 4001 was HEARD and HELD in Committee for                                                                           
          further consideration.                                                                                                
                                                                                                                                
HB 4005   An  Act   amending  the  power   cost  equalization                                                                   
          program,  repealing the exclusion  from eligibility                                                                   
          for  power  cost  equalization  for  certain  power                                                                   
          projects that  take their power  from hydroelectric                                                                   
          facilities,   and   amending  the   definition   of                                                                   
          'eligible  electric utility' as  it applies  to the                                                                   
          power  cost  equalization  program  and  the  grant                                                                   
          program  for  small   power  projects  for  utility                                                                   
          improvements; and providing  for an effective date.                                                                   
                                                                                                                                
          HB 4005 was HEARD and HELD in Committee for                                                                           
          further consideration.                                                                                                
                                                                                                                                
2:18:53 PM                                                                                                                    
HOUSE BILL NO. 4005                                                                                                           
                                                                                                                                
     An  Act amending  the power  cost equalization  program,                                                                   
     repealing the exclusion from  eligibility for power cost                                                                   
     equalization for certain  power projects that take their                                                                   
     power  from hydroelectric  facilities, and amending  the                                                                   
     definition of 'eligible electric  utility' as it applies                                                                   
     to  the power cost  equalization  program and the  grant                                                                   
     program   for   small   power   projects   for   utility                                                                   
     improvements; and providing for an effective date.                                                                         
                                                                                                                                
Co-Chair Meyer  MOVED to ADOPT Amendment  #1, 25-LS1757\E.28,                                                                   
Kane, 8/2/08:                                                                                                                   
                                                                                                                                
     Page 1, line 1, following "program;":                                                                                    
          Insert   "authorizing   a  temporary   power   cost                                                                 
     assistance program;"                                                                                                     
                                                                                                                                
     Page 1, line 9, through page 3, line 6:                                                                                    
          Delete all material and insert:                                                                                       
        "* Section 1. AS 42.45.110(c) is amended to read:                                                                   
               (c)  The amount of power cost equalization                                                                       
          provided   for  each   [PER]  kilowatt-hour   under                                                               
          [SUBSECTION] (b) of  this section may not exceed 95                                                                   
          percent  of the  power costs,  or the average  rate                                                                   
          for   each  [PER]   eligible  kilowatt-hour   sold,                                                               
          whichever   is   less,   as   determined   by   the                                                                   
          commission. However,                                                                                                  
                    (1)  [DURING THE STATE FISCAL YEAR THAT                                                                     
          BEGAN  JULY 1,  1999,]  the power  costs for  which                                                                   
          power  cost  equalization  are  [WERE] paid  to  an                                                               
          electric  utility  are  [WERE] limited  to  minimum                                                               
          power  costs   of  more  than  12   cents  a  [PER]                                                               
          kilowatt-hour  and  less  than  75 [52.5]  cents  a                                                           
          [PER] kilowatt-hour;                                                                                                  
                    (2) each year [DURING EACH FOLLOWING                                                                    
          STATE  FISCAL YEAR],  the  commission shall  adjust                                                                   
          the power  costs for which power  cost equalization                                                                   
          may  be paid to  an electric  utility based  on the                                                                   
          weighted   average  retail   residential  rate   in                                                                   
          Anchorage,  Fairbanks,  and  Juneau;  however,  the                                                                   
          commission  may not  adjust the  power costs  under                                                                   
          this  paragraph  to  reduce the  amount  below  the                                                                   
          lower limit set out  in (1) of this subsection; and                                                                   
                    (3)  the power cost equalization for                                                                    
          each  [PER] kilowatt-hour may  be determined  for a                                                               
          utility  without  historical   kilowatt-hour  sales                                                                   
          data by using kilowatt-hours generated.                                                                               
        * Sec. 2. AS 42.45.110(c), as amended by sec. 1 of                                                                    
     this Act, is amended to read:                                                                                              
               (c)  The amount of power cost equalization                                                                       
          provided for  each kilowatt-hour under  (b) of this                                                                   
          section  may not  exceed  95 percent  of the  power                                                                   
          costs,  or  the  average  rate  for  each  eligible                                                                   
          kilowatt-hour   sold,   whichever   is   less,   as                                                                   
          determined by the commission. However,                                                                                
                    (1)  the power costs for which power                                                                        
          cost equalization  are paid to an  electric utility                                                                   
          are limited to minimum  power costs of more than 12                                                                   
          cents  a  kilowatt-hour  and  less than  52.5  [75]                                                               
          cents a kilowatt-hour;                                                                                                
                    (2) each year, the commission shall                                                                         
          adjust  the  power   costs  for  which  power  cost                                                                   
          equalization  may be  paid to  an electric  utility                                                                   
          based  on the weighted  average retail  residential                                                                   
          rate in Anchorage, Fairbanks,  and Juneau; however,                                                                   
          the  commission  may  not adjust  the  power  costs                                                                   
          under  this paragraph  to reduce  the amount  below                                                                   
          the lower limit set  out in (1) of this subsection;                                                                   
          and                                                                                                                   
                    (3)  the power cost equalization for                                                                        
          each kilowatt-hour may  be determined for a utility                                                                   
          without  historical  kilowatt-hour  sales  data  by                                                                   
          using kilowatt-hours generated."                                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 3, following line 7:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Sec. 4. The uncodified  law of the State of Alaska                                                               
     is amended by adding a new section to read:                                                                                
          POWER   COST  ASSISTANCE.   (a)   For  the   period                                                                   
     beginning October 1, 2008,  and ending June 30, 2011, an                                                                   
     electric  utility  that  does  not  receive  power  cost                                                                   
     equalization under AS 42.45.100  - 42.45.150 is entitled                                                                   
     to  receive  five  cents   a  kilowatt-hour  for  actual                                                                   
     consumption  for each residential  customer of  not more                                                                   
     than 500  kilowatt-hours a month  or a maximum  of 6,000                                                                   
     kilowatt-hours a year.                                                                                                     
          (b)   The assistance provided to the  utility under                                                                   
     this  section  shall be  passed  along directly  to  the                                                                   
     residential  customer in  the form  of a  credit by  the                                                                   
     electric utility.                                                                                                          
          (c)   The  assistance provided  under this  section                                                                   
     may  only accrue  to  a single  individual  at a  single                                                                   
     residence  with  an  individual  meter  for  residential                                                                   
     electric service.                                                                                                          
          (d)     An  electric  utility  that   receives  the                                                                   
     assistance  provided  under  this section  shall  comply                                                                   
     with the provisions of AS 42.45.120.                                                                                       
          (e)   The  Regulatory  Commission  of Alaska  shall                                                                   
     modify   the  tariffs  of   an  electric  utility   that                                                                   
     maintains  a tariff with  the commission to  reflect the                                                                   
     utility's participation under this section.                                                                                
          (f)  The Alaska Energy  Authority shall  administer                                                                   
     the program  established in  this section and  may adopt                                                                   
     regulations for that purpose.                                                                                              
          (g)   In this section,  "electric utility"  means a                                                                   
     public,  cooperative,  or  other  corporation,  company,                                                                   
     individual,  or  association of  individuals,  including                                                                   
     the  lessees,  trustees,  or receivers  appointed  by  a                                                                   
     court,  that  owns,  operates, manages,  or  controls  a                                                                   
     plant  or  system  for the  furnishing,  by  generation,                                                                   
     transmission,  or distribution,  of electric service  to                                                                   
     the  public  for  compensation  but does  not  meet  the                                                                   
     requirements of AS 42.45.150(2)(B) and (C)."                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 3, line 23:                                                                                                           
          Delete "$170"                                                                                                         
          Insert "$127.50"                                                                                                      
                                                                                                                                
     Page 3, line 31:                                                                                                           
          Delete "$170"                                                                                                         
          Insert "$127.50"                                                                                                      
                                                                                                                                
     Page 4, following line 12:                                                                                                 
          Insert new subsections to read:                                                                                       
          "(d)  An individual may elect not to receive the                                                                      
     $1,000  resource  rebate authorized  under  (a) of  this                                                                   
     section.  An individual  who elects  not to receive  the                                                                   
     $1,000  resource  rebate authorized  under  (a) of  this                                                                   
     section  may provide notice  of the  election on  a form                                                                   
     provided by  the Department  of Revenue. Notice  must be                                                                   
     postmarked or received by  the Department of Revenue not                                                                   
     later than September 2, 2008.                                                                                              
          (e)  Notwithstanding any contrary provision of                                                                        
     law,  an  individual who  did  not  apply for  the  2008                                                                   
     permanent  fund dividend and  is eligible for  veterans'                                                                   
     benefits  under 38  U.S.C. 1315,  1513, 1521, 1541,  and                                                                   
     1542  may  apply for  a  $1,000 Alaska  resource  rebate                                                                   
     payment  for   2008.  The  veteran  or   the  spouse  or                                                                   
     dependent of a living or  deceased veteran must apply to                                                                   
     the  Department  of Revenue  not later  than  October 1,                                                                   
     2008,  and demonstrate  that the  individual would  have                                                                   
     been eligible to receive  a 2008 permanent fund dividend                                                                   
     under AS 43.23,  except for  not having applied  for the                                                                   
     2008 permanent fund dividend previously.                                                                                   
          (f)  The veteran or the spouse or dependent of a                                                                      
     living  or deceased  veteran who  is denied or  receives                                                                   
     reduced payments or reduced  health care benefits solely                                                                   
     because the  $1,000 payment under this  section received                                                                   
     by the individual  is counted as income  is eligible for                                                                   
     benefits     under     AS 47.25.120     -     47.25.300.                                                                   
     Notwithstanding  the limit in AS 47.25.130,  the veteran                                                                   
     or  the spouse  or  dependent of  a  living or  deceased                                                                   
     veteran is  entitled to receive  the same amount  as the                                                                   
     individual  would have  received under  38 U.S.C.  1315,                                                                   
     1513,  1521, 1541,  and 1542  had a  $1,000 payment  not                                                                   
     been received under this section."                                                                                         
                                                                                                                                
     Page 4, following line 29:                                                                                                 
          Insert a new bill section to read:                                                                                    
        "*  Sec.  9.  Section  4  of  this  Act  is  repealed                                                               
     June 30, 2011."                                                                                                            
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 30:                                                                                                           
          Delete "Sections 1 and 3"                                                                                             
          Insert "Sections 1 and 4"                                                                                             
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 8"                                                                                                    
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 3 and 5 - 7"                                                                                         
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
SUZANNE   ARMSTRONG,  STAFF,   REPRESENTATIVE  KEVIN   MEYER,                                                                   
explained the first change in  the formula, which would alter                                                                   
the method for calculating Power  Cost Equalization (PCE) and                                                                   
revert  back to  the formula  currently in  statute with  the                                                                   
exception of a  higher ceiling rate of 75 cents.  The ceiling                                                                   
would return to 52.5 cents on  June 30, 2011. Section 4, Page                                                                   
2 would  insert a  new section  into uncodified law  entitled                                                                   
the  Power Cost  Assistance because  it  is not  part of  the                                                                   
equalization  program. This exists  for the period  beginning                                                                   
October 1,  2008 and ending  June 30,  2011. Page 3,  Line 17                                                                   
addressed  the dollar  value of  the  community heating  cost                                                                   
point under  the Low  Income Home  Energy Assistance  Program                                                                   
(LIHEAP)  program  and  similarly  under  the  state  heating                                                                   
assistance program  $1.27, which  would increase  the current                                                                   
value  one and  one half  times. Page  3, Line  25 was a  new                                                                   
section inserted under the resource  rebate portion, allowing                                                                   
individuals  to  opt out  of  receiving the  resource  rebate                                                                   
through the  Department of Revenue.  Page 4, Line  1 included                                                                   
two new  provisions. The  first would  allow individuals  who                                                                   
received  certain veteran's  benefits  under  federal law  to                                                                   
apply  for the  Alaska resource  rebate  program. The  second                                                                   
provision  would  allow  for these  individuals  to  be  held                                                                   
harmless if they loose their federal benefits.                                                                                  
                                                                                                                                
Representative  Crawford referenced  Page 3,  Line 27,  which                                                                   
states  that a person  may elect  not to  receive the  $1,000                                                                   
resource   rebate.  He  suggested   amending  Amendment   #1,                                                                   
deleting Amendment  #16 and divert  the money refused  to the                                                                   
Renewable  Energy Fund. Co-Chair  Meyer suggested  addressing                                                                   
the recommendation as a separate  amendment after determining                                                                   
the cost by the Department of Revenue.                                                                                          
                                                                                                                                
2:25:03 PM                                                                                                                    
                                                                                                                                
Representative  Nelson  noted   two  issues  that  were  also                                                                   
included in her  amendment. Amendment #10 would  increase the                                                                   
Power Cost  Equalization (PCE) cap  from 75 cents per  kWh to                                                                   
$1.15  per  kWh.  She  referenced  information  by  Mr.  Teal                                                                   
regarding  anticipated  FY09 rates  before  PCE  in which  70                                                                   
utilities  would pay  more than  75 cents per  kWh hour.  She                                                                   
requested  that  the  amendment be  amended.  Co-Chair  Meyer                                                                   
stated that  he preferred  Representative Nelson's  amendment                                                                   
be addressed separately.                                                                                                        
                                                                                                                                
Representative Nelson  felt that leaving the cap  at 75 cents                                                                   
per kWh and then  lowering the amount to 6 cents  per kWh for                                                                   
Anchorage consumers  does not  support the philosophy  of the                                                                   
PCE program.                                                                                                                    
                                                                                                                                
2:28:32 PM                                                                                                                    
                                                                                                                                
Representative  Gara  requested the  PCE  cap  amount for  CS                                                                   
draft version E.  He asked if it was the actual  cost minus a                                                                   
certain amount. Ms. Armstrong  responded that the ceiling was                                                                   
$.75 per  kWh and  the established floor  was 120  percent of                                                                   
the urban average calculated under  the bill. The state would                                                                   
pay  the difference  between  15.4 cents  and  75 cents;  the                                                                   
state would  cover 100% of  the cost  if the actual  cost was                                                                   
lower.                                                                                                                          
                                                                                                                                
Representative Gara  asked about the power cost  portion. Ms.                                                                   
Armstrong referenced  the handout: "FY09 Costs  under Various                                                                   
Assumptions"  (copy on  file). She noted  the House  proposal                                                                   
predicted  a cost of  $54,667,204 for  payments to  currently                                                                   
qualified utilities.                                                                                                            
                                                                                                                                
Representative Gara thought that  subsidizing power costs for                                                                   
individuals  in Anchorage  who  have the  lowest  electricity                                                                   
costs in the state would not be  equitable. Rural costs would                                                                   
remain high  despite PCE assistance.  He asked  how Anchorage                                                                   
could pay  six cents per kWh  when Lime Village would  pay 40                                                                   
cents  per kWh.  He  discussed extending  the  equity of  the                                                                   
proposal to  rural Alaska.  He thought that  it would  not be                                                                   
expensive to reduce  those rural utility costs  by decreasing                                                                   
the amount  of money allocated  to Anchorage. He  agreed with                                                                   
the proposal made by Representative Nelson.                                                                                     
                                                                                                                                
2:32:58 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asserted that the  maximum benefit for non PCE                                                                   
recipients  in Anchorage  and  Southeast areas  is a  maximum                                                                   
amount of  $25 dollars per month.  He admitted that  it moved                                                                   
from  $.52 to  $.75 per  kWh based  on  public testimony.  He                                                                   
wanted to see  a balanced package. Other assistance  would be                                                                   
available from LIHEAP and the resource rebate program.                                                                          
                                                                                                                                
Representative  Gara asked the  amount needed to  extend full                                                                   
PCE  coverage  to  $1.17  per   kWh  for  rural  communities.                                                                   
Representative Nelson stated that  at $1.15 per kWh, it would                                                                   
be $63.9 million.                                                                                                               
                                                                                                                                
2:35:15 PM                                                                                                                    
                                                                                                                                
DAVID TEAL, DIRECTOR, LEGISLATIVE  FINANCE DIVISION, informed                                                                   
that  the numbers  mentioned  by Representative  Nelson  were                                                                   
provided by the  Senate. He pointed out that  the Senate bill                                                                   
is not currently before the House  Finance Committee. Raising                                                                   
the ceiling to $1.15 would instead cost about $3 million.                                                                       
                                                                                                                                
Representative Gara thought that  was reasonable. He proposed                                                                   
a friendly amendment,  to fully cover rural  Alaska. He asked                                                                   
how  much money  would  subsidize  the cost  for  individuals                                                                   
currently charged less than 11  cents per kWh. Co-Chair Meyer                                                                   
answered that  the bill's proposed  floor was 12.8  cents per                                                                   
kWh  and   five  cents  per   kWh  would  be   allocated  for                                                                   
individuals below the floor.                                                                                                    
                                                                                                                                
2:37:46 PM                                                                                                                    
                                                                                                                                
Representative  Kelly commented  that  the .52  cent cap  has                                                                   
been in effect for over a decade.  The reason that cap is not                                                                   
at the maximum  is because if  it was removed in  the future,                                                                   
the shock would  be significant. He stressed  that structural                                                                   
changes within the PCE program should be handled carefully.                                                                     
                                                                                                                                
Representative  Nelson   pointed  out  that  there   were  70                                                                   
utilities anticipating the 75  cent cap in FY09. They are not                                                                   
dying  villages and  school construction  is  at 210  percent                                                                   
capacity.  She listed the amount  many villages will pay. She                                                                   
maintained that in two years,  there will be many individuals                                                                   
issuing a human cry to retain this program.                                                                                     
                                                                                                                                
2:40:32 PM                                                                                                                    
                                                                                                                                
Representative  Crawford  agreed  with  Representative  Kelly                                                                   
that  it could  be  a shock,  but the  bill  attempts to  get                                                                   
"people over the  hump" while seeking other  alternatives. He                                                                   
hoped to see many structural changes.                                                                                           
                                                                                                                                
2:41:43 PM                                                                                                                    
                                                                                                                                
Representative Hawker commented  that the policy created must                                                                   
be efficient,  equitable, and effective. When  providing rate                                                                   
based  indemnity,  the  incentive   to  reduce  the  cost  of                                                                   
operations  is  removed. He  thought  that Amendment  #1  was                                                                   
reasonable.                                                                                                                     
                                                                                                                                
2:44:28 PM                                                                                                                    
                                                                                                                                
Representative Gara proposed an  easy fix that would cost the                                                                   
state only  $3 million dollars. If  a change to Page  2, Line                                                                   
26, from the urban  subsidy of 5 cents per kWh  to 4.75 cents                                                                   
per kWh was made,  then a $3 million dollar  savings would be                                                                   
seen.  Anchorage would  continue  to get  a  subsidy, but  it                                                                   
would  allow  the dollars  to  extend  full coverage  to  the                                                                   
higher  cost  areas.  The  renewable   energy  fund  provides                                                                   
incentive. He respected the comments  regarding the incentive                                                                   
of  choosing alternative  energy  sources in  the future.  He                                                                   
reiterated  that  the amount  necessary  is  only $3  million                                                                   
dollars.                                                                                                                        
                                                                                                                                
2:47:01 PM                                                                                                                    
                                                                                                                                
Representative Nelson  emphasized that the  village residents                                                                   
are efficient.  She compared electricity  use in  villages at                                                                   
an average  of 300 kWh  per month to  Anchorage's use  of 750                                                                   
kWh per  month. It  is impossible to  have a healthy  economy                                                                   
without clinics  and schools, which  are not covered  by PCE.                                                                   
The villages  will be  paying twice as  much as Anchorage  at                                                                   
six cents.                                                                                                                      
                                                                                                                                
Co-Chair  Chenault   pointed  to  the  $20   million  dollars                                                                   
allocated  for  school's  energy  costs. He  added  that  the                                                                   
municipal  revenue sharing  plan  had been  reinstituted  for                                                                   
community facilities.   He stressed that the  legislature has                                                                   
moved forward in addressing those needs.                                                                                        
                                                                                                                                
2:49:15 PM                                                                                                                    
                                                                                                                                
Representative  Nelson voiced  appreciation for the  latitude                                                                   
provided  by  the Chair  for  the  committee to  discuss  the                                                                   
issue.  She read  a letter  from the  Yupiit School  District                                                                   
regarding  district cuts  of nearly  $900  thousand from  the                                                                   
operating  budget   because  of  fuel  delivery   costs.  She                                                                   
asserted  that preparation  for rates  rising so  drastically                                                                   
would have  been impossible.  She appreciated the  discussion                                                                   
in  light  of   the  crisis.  Co-Chair  Meyer   advised  that                                                                   
Amendment #1 should not be amended  but proposed that changes                                                                   
be inserted into Amendment #10.                                                                                                 
                                                                                                                                
2:51:09 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  for  an explanation  of Line  17,                                                                   
Page 3.  Ms. Armstrong  explained that  the dollar  amount of                                                                   
the community heating  cost points in the LIHEAP  program was                                                                   
changed from $170 dollars to $127.50 dollars.                                                                                   
                                                                                                                                
Representative  Gara   clarified  that  the   legislature  is                                                                   
increasing  the individual's  potential  LIHEAP payment.  Co-                                                                   
Chair Meyer responded  that the additional $10  million added                                                                   
to LIHEAP will  now include eligible recipients in  up to 225                                                                   
percent of the poverty level.                                                                                                   
                                                                                                                                
Representative Gara asked if this  would increase or decrease                                                                   
the individual  potential payment. Ms. Armstrong  stated that                                                                   
the change would  increase from the current value  by one and                                                                   
one half times.                                                                                                                 
                                                                                                                                
Representative Gara  asked what the additional  appropriation                                                                   
for  LIHEAP  would  be  with   this  change.  Co-Chair  Meyer                                                                   
responded $10 million dollars.                                                                                                  
                                                                                                                                
Representative  Gara clarified that  the $40 million  dollars                                                                   
discussed  in prior  meetings  was for  the former  proposal.                                                                   
Ms. Armstrong agreed.                                                                                                           
                                                                                                                                
2:56:56 PM                                                                                                                    
                                                                                                                                
Representative  Gara  directed  comments on  the  appropriate                                                                   
amount of the  rebate. Co-Chair Meyer noted that  a family of                                                                   
four at  225 percent  poverty  level had a  $60 thousand  per                                                                   
year income.                                                                                                                    
                                                                                                                                
Representative  Nelson  asked if  a LIHEAP  household,  under                                                                   
this  proposal, with  an  average of  ten  points, would  get                                                                   
$1270   dollars  per   year.  Ms.   Armstrong  replied   that                                                                   
Representative Nelson was correct;  the benefit is awarded on                                                                   
an annual basis.   Representative Nelson estimated  that this                                                                   
amount  would pay  for  only 200  gallons  of fuel.  Co-Chair                                                                   
Meyer wanted to see the "right  package". He listed available                                                                   
benefits,  which  included  PCE,  LIHEAP,  and  the  resource                                                                   
rebate.                                                                                                                         
                                                                                                                                
Representative  Nelson  commented that  home  heating is  the                                                                   
most expensive  utility. For low income families,  40 percent                                                                   
of their  budget is spent on  home heating. She  liked LIHEAP                                                                   
because  it addresses  the poorest  of the  poor and  ensures                                                                   
that  they do  not fall  through the  cracks. She  emphasized                                                                   
that LIHEAP  applicants are some  of the poorest  individuals                                                                   
in the state.                                                                                                                   
                                                                                                                                
Co-Chair Meyer disagreed because  he felt the amendment would                                                                   
increase the amount significantly.                                                                                              
                                                                                                                                
3:00:50 PM                                                                                                                    
                                                                                                                                
Representative Gara  opined that there was no  doubt that the                                                                   
amendment  was inequitable.  The bill  allocates $65  million                                                                   
dollars to  Anchorage. He  proposed that  instead of  5 cents                                                                   
per kWh change  to 4 cents per kWh, which saves  $13 million.                                                                   
This  proposal  would  provide  little change  for  those  in                                                                   
Anchorage  while  providing a  big  change rural  Alaska.  He                                                                   
urged  the change  as it  would  have very  little effect  on                                                                   
Anchorage and he encouraged full PCE cap at $1.17 per kWh.                                                                      
                                                                                                                                
Co-Chair  Meyer interjected  that Anchorage  is a large  area                                                                   
and that  one cent does  add up to  a considerable  amount of                                                                   
money. Ms. Armstrong  added that the allocation  would not be                                                                   
limited  to the  Anchorage  area; Fairbanks,  Juneau,  Homer,                                                                   
Mat-Su, Kodiak,  Seward, Petersburg, Wrangell,  and Ketchikan                                                                   
would also be included. The population  density increases the                                                                   
number. Co-Chair Meyer agreed.                                                                                                  
                                                                                                                                
3:04:50 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze observed the  number of municipalities and                                                                   
noted that one half million people  fell under the 5 cent per                                                                   
kWh. This would  constitute 80 percent of the  population. He                                                                   
understood equitable  to mean that each  legislative district                                                                   
would  receive  equal benefits.  The  goal  was to  allow  80                                                                   
percent of  the people  to receive some  of the benefit.  Co-                                                                   
Chair Meyer  was sympathetic  to rural  Alaska and  wanted to                                                                   
see the package reflect equity.                                                                                                 
                                                                                                                                
3:06:38 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze WITHDREW the  OBJECTION.   Representative                                                                   
Nelson OBJECTED.                                                                                                                
                                                                                                                                
3:07:07 PM                                                                                                                    
                                                                                                                                
Representative  Gara MOVED to  AMEND Amendment  1 on  Page 1,                                                                   
Line 14:                                                                                                                        
                                                                                                                                
     Delete 75 cents per kWh                                                                                                    
     Insert 1.17 per kWh                                                                                                        
                                                                                                                                
     Page 2, Line 26;                                                                                                           
     Delete 5 cents per kWh                                                                                                     
     Insert 4 cents per kWh                                                                                                     
                                                                                                                                
     Delete Page 3, Line 17-23.                                                                                                 
                                                                                                                                
Co-Chair Meyer OBJECTED to the amendment to the amendment.                                                                      
                                                                                                                                
Representative  Gara clarified  that the  original intent  of                                                                   
Special Session was to help people  in crisis. Co-Chair Meyer                                                                   
countered  that  there  are  people   in  Anchorage  who  are                                                                   
struggling to pay their electric bills.                                                                                         
                                                                                                                                
Representative Hawker discussed  the argument to redistribute                                                                   
the wealth  from the  customer  of non PCE  utilities to  PCE                                                                   
utilities.  He spoke  to the poverty  and wealth  in his  own                                                                   
community.                                                                                                                      
                                                                                                                                
3:14:59 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze  asked  how the  amendment  would  reduce                                                                   
utilities for  the non PCE applicants. Ms.  Armstrong offered                                                                   
to  run  the  numbers;  she  thought   it  would  reduce  the                                                                   
assistance  around  $13 million  dollars  per  kWh. Mr.  Teal                                                                   
informed  that on  Page 6  of the  spreadsheet the  utilities                                                                   
that  are not  currently  eligible for  PCE  are listed.  For                                                                   
every penny reduction, each consumer's  bill would be reduced                                                                   
by $5.  Every consumer  would have a  $25 reduction  in their                                                                   
monthly bill. If  the reduction was dropped to  4 cents there                                                                   
would be a $20 reduction in a monthly bill.                                                                                     
                                                                                                                                
Representative Gara  clarified that each penny  per kWh would                                                                   
equal $13 million  dollars. He conceded that  there should be                                                                   
a  component  of  this  program   that  benefits  individuals                                                                   
regardless of  their wealth.  Co-Chair Meyer reiterated  that                                                                   
the total benefit with the change  proposed by Representative                                                                   
Gara would be $240 per year versus $300 per year.                                                                               
                                                                                                                                
3:19:46 PM                                                                                                                    
                                                                                                                                
Representative Thomas stated that he would vote against the                                                                     
amendment. He thought that the bill would provide more                                                                          
advantages to all communities.                                                                                                  
                                                                                                                                
Representative Gara WITHDREW the change.                                                                                        
                                                                                                                                
Representative Nelson maintained her OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion to adopt Amendment                                                                     
1.                                                                                                                              
                                                                                                                                
IN FAVOR: Foster, Hawker, Kelly, Stoltze, Thomas, Meyer,                                                                        
Chenault.                                                                                                                       
OPPOSED:  Gara, Nelson, Crawford                                                                                                
                                                                                                                                
Representative Joule was not present for the vote.                                                                              
                                                                                                                                
The MOTION PASSED (7-3).                                                                                                        
                                                                                                                                
3:22:22 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #2:                                                                                     
                                                                                                                                
     Page 4, following line 27:                                                                                                 
                                                                                                                                
          Insert:                                                                                                               
                                                                                                                                
               "(c) A retail dealer located in a                                                                                
     municipality or community of 1,000 or fewer residents                                                                      
     that purchases or receives a transfer of gasoline,                                                                         
     diesel, or aviation fuel from a person that would have                                                                     
     been subject to AS 43~4OMl0(c) except for the                                                                              
     suspension established in (a) of this section, shall                                                                       
     pass on to the end user 100 percent of the tax savings                                                                     
     realized from the tax suspension provided under (a) of                                                                     
     this section.                                                                                                              
                                                                                                                                
     (d)  While  the suspension of  the state motor  fuel tax                                                                   
     is in  effect, a  retail dealer  described under  (c) of                                                                   
     this section  shall annually submit a  signed statement,                                                                   
     under penalty of unsworn  falsification, on a form or in                                                                   
     a  format  prescribed  by   the  Department  of  Revenue                                                                   
     stating that                                                                                                               
                                                                                                                                
               (1) the retail dealer will pass on to end                                                                        
                  users 100 percent of the tax savings while                                                                    
                  the suspension under (a) of this section                                                                      
                  is in effect;                                                                                                 
                                                                                                                                
               (2) the retail dealer will not increase its                                                                      
                    price for motor fuel based solely in                                                                        
                    response to the suspension of the state                                                                     
                    motor fuel tax; and                                                                                         
                                                                                                                                
 Representative Hawker OBJECTED.                                                                                                
                                                                                                                                
3:22:41 PM                                                                                                                    
                                                                                                                                
RANDALL  RUARO, SPECIAL  ASSISTANT, OFFICE  OF THE  GOVERNOR,                                                                   
Mr.  Ruaro  explained that  Amendment  #2  is an  attempt  to                                                                   
ensure that gas  retailers will pass on the eight  cent  fuel                                                                   
tax suspension savings.                                                                                                         
                                                                                                                                
Representative  Hawker  noted   that  this  amendment  is  an                                                                   
attempt to address  concerns that the tax  suspension savings                                                                   
would be a benefit  to the consumer, but he  sees no evidence                                                                   
that it will be effective.                                                                                                      
                                                                                                                                
Co-Chair  Meyer  asked  how many  retailers  this  suspension                                                                   
would  impact.  Mr. Ruaro  said  the amendment  would  impact                                                                   
retailers operating in communities  with a population of 1000                                                                   
or less. He expected that it would have a positive effect.                                                                      
                                                                                                                                
3:25:53 PM                                                                                                                    
                                                                                                                                
Representative  Gara noted that  not all  the benefit  can be                                                                   
expected to  go to consumers.  He is concerned  about sending                                                                   
someone to jail  for inadvertently failing to  pass along the                                                                   
savings.  He  asked how  to  determine  that a  retailer  was                                                                   
passing  on the savings  with variables  like market  forces,                                                                   
competition, etc.                                                                                                               
                                                                                                                                
Mr. Ruaro  cited the  case in Florida  where failure  to pass                                                                   
along the savings was a crime.  There, the state reviewed the                                                                   
gross receipts  of the suppliers. Subsequent  analysis showed                                                                   
even greater savings passed along to consumers.                                                                                 
                                                                                                                                
Representative   Gara  maintained   that  in  two   different                                                                   
situations  in  Alaska,  different  market  conditions  would                                                                   
cause suppliers to behave differently.                                                                                          
                                                                                                                                
Mr. Ruaro  explained his thinking.  Competition in  the urban                                                                   
market  will  pass the  savings  on  to the  consumers.  Fuel                                                                   
stations that refrain  from passing the saving  will not sell                                                                   
as much  gas. The amendment  addresses the rural  concerns by                                                                   
providing incentives to pass on the savings.                                                                                    
                                                                                                                                
3:30:05 PM                                                                                                                    
                                                                                                                                
Representative  Gara  appreciated  the  effort  to  encourage                                                                   
people to be more honest, but  felt that there was not a sure                                                                   
method of  enforcing the  law. It  is difficult to  determine                                                                   
whether or not the law has been broken.                                                                                         
                                                                                                                                
CLYDE   (ED)  SNIFFEN   JR.,   ASSISTANT  ATTORNEY   GENERAL,                                                                   
DEPARTMENT OF  LAW testified  via teleconference,  that there                                                                   
are some mechanisms  in place that could help  determine that                                                                   
the savings are  being passed along. There is  a provision in                                                                   
the Amendment that allows the  Department of Revenue to audit                                                                   
books.                                                                                                                          
                                                                                                                                
3:32:12 PM                                                                                                                    
                                                                                                                                
Representative  Thomas  commented   on  the  constituents  he                                                                   
served  who live  primarily in  areas  with populations  less                                                                   
than  1000.  These individuals  are  routinely  checking  the                                                                   
barge  as the  fuel  arrives, to  note the  cost  of gas.  He                                                                   
asserted that  these constituents  would know immediately  if                                                                   
the savings had not been passed along.                                                                                          
                                                                                                                                
Representative Hawker believed  that while the vendors in the                                                                   
smaller towns  may be well observed  they are also  the least                                                                   
equipped to  implement the  detailed provisions listed  here.                                                                   
He asked about  the fiscal note associated with  auditing the                                                                   
retailers' fuel books.                                                                                                          
                                                                                                                                
3:34:01 PM                                                                                                                    
                                                                                                                                
JERRY   BURNETT,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                   
SERVICES, DEPARTMENT OF REVENUE,  responded that audits would                                                                   
not occur  unless complaints  are issued  from consumers.  He                                                                   
thought that any complaints would be resolved easily.                                                                           
                                                                                                                                
Representative  Hawker agreed that  the need to  enforce this                                                                   
penalty is not  anticipated. What is the point  of putting it                                                                   
in  statute if  there is  no anticipation  of complaints  and                                                                   
audits? The weight of evidence  falls against this amendment.                                                                   
                                                                                                                                
3:36:20 PM                                                                                                                    
                                                                                                                                
Representative Crawford voiced  concern with Amendment #2. He                                                                   
disagreed  with this amendment  because he  did not  think it                                                                   
was a good use of the state's  resources. The simplest way to                                                                   
get the  $40 million to Alaskans  would be to issue  a direct                                                                   
payment.                                                                                                                        
                                                                                                                                
3:39:26 PM                                                                                                                    
                                                                                                                                
Mr.  Ruaro  disagreed  and  pointed   out  the  Unfair  Trade                                                                   
Practices currently  written on  the books. The  amendment is                                                                   
consistent with those statutes  where a business is regulated                                                                   
and the  government is allowed to  check and make sure  it is                                                                   
followed.  A retailer would have  to intentionally defraud to                                                                   
be found guilty under the bill.                                                                                                 
                                                                                                                                
Representative  Kelly admitted  that  the administration  has                                                                   
attempted  to  address the  situation.  He testified  to  the                                                                   
liability  of  the  state.  He  did  not  want  to  give  the                                                                   
impression  that  a person  should  call  the state  if  they                                                                   
suspect  that  they  are  not benefiting  from  the  gas  tax                                                                   
suspension. Sending  the message that the state  is liable is                                                                   
the wrong message to send. The effort of the administration                                                                     
was good but the result was not.                                                                                                
                                                                                                                                
3:43:14 PM                                                                                                                    
                                                                                                                                
Representative Hawker maintained his OBJECTION.                                                                                 
                                                                                                                                
A roll call vote was taken on the motion to adopt Amendment                                                                     
2.                                                                                                                              
                                                                                                                                
IN FAVOR: Meyer                                                                                                                 
OPPOSED: Gara, Hawker, Kelly, Nelson, Stoltze, Thomas,                                                                          
Crawford, Foster, Chenault                                                                                                      
                                                                                                                                
Representative Joule was not present for the vote.                                                                              
                                                                                                                                
The MOTION FAILED (1-9).                                                                                                        
                                                                                                                                
3:44:31 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED to ADOPT Amendment #3, 25-                                                                          
LS1757\E.1, Kane, 7/31/08:                                                                                                      
                                                                                                                                
     Page 1, lines 5 - 7:                                                                                                       
          Delete "relating to Alaska resource rebates, and                                                                    
     increasing the amount of the 2008 permanent fund                                                                         
     dividend by the amount of the rebate"                                                                                    
                                                                                                                                
     Page 4, lines 1 - 12:                                                                                                      
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 8"                                                                                                    
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 5 - 7"                                                                                               
                                                                                                                                
   Vice-Chair Stoltze OBJECTED.                                                                                                 
                                                                                                                                
     Page 1, Lines 5-7, delete: "relating to the Alaska                                                                         
     resource rebates and increasing the amount of the 2008                                                                     
     permanent fund dividend by the amount of the rebate"                                                                       
                                                                                                                                
     Delete all  material on Page 4, Lines  1-12. Renumbering                                                                   
     the following  bill sections  accordingly, Page  5, Line                                                                   
     1, delete "Section  9" and insert "Section 8".   Page 5,                                                                   
     Line 2, delete "Sections 5-8" and insert "Sections 5-                                                                      
     7".                                                                                                                        
                                                                                                                                
Representative Hawker  explained Amendment #3.   He discussed                                                                   
the three "E's":                                                                                                                
                                                                                                                                
   ·    efficient                                                                                                               
   ·    equitable                                                                                                               
   ·    effective                                                                                                               
                                                                                                                                
There is  nothing written in  this bill that  would encourage                                                                   
people to switch to renewable  energy. Once the oil wealth is                                                                   
gone, it's  gone for  good. If  the money  were spent  with a                                                                   
policy and a plan,  then much good could be done.  There is a                                                                   
billion  dollars worth  of deferred maintenance  on roofs  of                                                                   
state  buildings  alone. There  are  a tremendous  amount  of                                                                   
state  infrastructure   improvements  that  could   be  done.                                                                   
"Throwing cash  at people is not  good policy but it  is what                                                                   
politicians  do when  they don't  have  policy." Giving  away                                                                   
money does not  encourage any incentive to invest  in changes                                                                   
that will benefit communities for the long term.                                                                                
                                                                                                                                
3:51:24 PM                                                                                                                    
                                                                                                                                
Representative  Thomas  spoke   to  the  other  side  of  the                                                                   
amendment. His  communities pay for  electricity at 22  to 58                                                                   
cents per  kWh. Home  heating fuel  is being used  throughout                                                                   
Southeast  Alaska, unlike  the natural  gas available  on the                                                                   
railbelt. This  is the only part  of the bill  where everyone                                                                   
is treated  equally no matter  where they live.  The villages                                                                   
in  Southeast are  shrinking due  to high  energy costs.  The                                                                   
people deserve to benefit from the wealth of the state.                                                                         
                                                                                                                                
3:54:27 PM                                                                                                                    
                                                                                                                                
Representative   Gara  agreed   with  most  everything   that                                                                   
Representative  Hawker said  but  disagreed with  him on  the                                                                   
vote.  There are  other  important needs  in  the state.  The                                                                   
expense will be $800 million.  He announced that $200 million                                                                   
of  this resource  rebate will  go to  families with  incomes                                                                   
over $100  thousand per  year. He believed  that there  was a                                                                   
better  use for that  $200 million.  He tried  to shave  this                                                                   
proposal down to  get money to the people who  do need it but                                                                   
not to those  who don't need it.  But he couldn't find  a way                                                                   
to get the committee to go along  with his idea. Therefore he                                                                   
was supporting  it in  order to  get the  funds to those  who                                                                   
really need it.                                                                                                                 
                                                                                                                                
3:57:22 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  told a story  about Wally Hickel  and his                                                                   
admiration of him.                                                                                                              
                                                                                                                                
Representative Kelly  agreed that many people  are not asking                                                                   
for  the support  check. The  opinion most  expressed by  his                                                                   
constituents  is that  they would  take the  check if it  was                                                                   
passed out,  but it is  a poor way  to do business.  The cost                                                                   
would be  at least one billion  dollars. He would  rather see                                                                   
the money  spent on a  road to Western  Alaska, which  he had                                                                   
been hearing about since he was  young. The road would make a                                                                   
difference for  energy costs. He  would also prefer  to build                                                                   
the Susitna  Dam, or  to build an  electric intertie  to Tok.                                                                   
These projects would provide long  term impacts on energy. He                                                                   
was  concerned about  the loss  of  self-reliance in  Alaska.                                                                   
Some people are helping themselves  by installing wood pellet                                                                   
stoves  and others  efficient wood  burning devices.  Helping                                                                   
the poorest of the poor often  turns into helping people with                                                                   
high income  levels. He is worried  about handing a  check to                                                                   
his grandchildren - what kind  of a message does this send to                                                                   
them? At  statehood, the founders  didn't have in  mind using                                                                   
our   resources  to   pay  electric   or   fuel  bills.   The                                                                   
constitution  was not set  up for people  to get  the natural                                                                   
resource  proceeds  themselves, but  to  allow  the state  to                                                                   
build the infrastructure  necessary to build  the economy. He                                                                   
is unsure  what his  position is  on the  final bill,  but he                                                                   
will support this amendment because  he would rather have the                                                                   
money pay for infrastructure.                                                                                                   
                                                                                                                                
4:05:38 PM                                                                                                                    
                                                                                                                                
Representative Crawford felt trepidation  about this bill. He                                                                   
opposed  Representative  Thomas'  bill offered  earlier.  The                                                                   
vast majority  of his constituents have  expressed opposition                                                                   
to this bill,  but there are some  who really need  it. He is                                                                   
going to  oppose this amendment  for now,  but he may  not be                                                                   
able  to  support  the  final bill  unless  there  are  other                                                                   
changes made.                                                                                                                   
                                                                                                                                
4:08:33 PM                                                                                                                    
                                                                                                                                
Representative Hawker  explained that this policy  call was a                                                                   
classic  dilemma,   the  choice   between  two   unacceptable                                                                   
alternatives. He decided he would  like to have a vote on the                                                                   
issue because he wanted to encourage  a thorough debate about                                                                   
the state's policy. He advocated  for a frugal government. He                                                                   
did not want to face the issue  of comparing this expenditure                                                                   
with  the  many  other  projects  that  are  truly  a  higher                                                                   
priority.  He believed  that the $800  million expended  here                                                                   
did not rise to the level of building  schools or alternative                                                                   
energy projects.                                                                                                                
                                                                                                                                
4:12:27 PM                                                                                                                    
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
3.                                                                                                                              
                                                                                                                                
IN FAVOR:      Hawker, Kelly, Foster                                                                                            
OPPOSED:       Nelson, Stoltze, Thomas, Crawford, Gara,                                                                         
               Meyer, Chenault                                                                                                  
                                                                                                                                
Representative Joule was not present for the vote.                                                                              
                                                                                                                                
The MOTION FAILED (3-7).                                                                                                        
                                                                                                                                
4:14:41 PM                                                                                                                    
                                                                                                                                
Representative Thomas WITHDREW Amendment #4.                                                                                    
                                                                                                                                
4:15:07 PM                                                                                                                    
                                                                                                                                
Representative Thomas WITHDREW Amendment #5.                                                                                    
                                                                                                                                
4:15:28 PM                                                                                                                    
                                                                                                                                
Representative Thomas MOVED to ADOPT Amendment #6, #25-                                                                         
LS1757\E.13, Mischel & Kane, 8/1/08:                                                                                            
                                                                                                                                
     Page 1, following line 8:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 42.45.110(b) is amended to read:                                                                   
               (b)  An eligible electric utility is entitled                                                                    
          to receive power cost equalization                                                                                    
                    (1)  for sales of power to local                                                                            
          community  facilities, calculated in  the aggregate                                                                   
          for each community served  by the electric utility,                                                                   
          for  actual   consumption  of  not  more   than  70                                                                   
          kilowatt-hours  a month  for each  resident of  the                                                                   
          community; the number  of community residents shall                                                                   
          be  determined annually  by the  latest figures  of                                                                   
          the  United States  Bureau of  the Census  or other                                                                   
          population  data that  the Department of  Commerce,                                                                   
          Community,  and Economic Development  determines is                                                                   
          reliable; and                                                                                                         
                    (2)  for actual consumption of not more                                                                     
          than  500  kilowatt-hours  a  month  sold  to  each                                                                   
          residential and business customer."                                                                               
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 1, line 13, following "rate":                                                                                         
          Insert "for a residential  customer, and the retail                                                                   
     commercial power rate, for a business customer,"                                                                           
                                                                                                                                
     Page 2, line 19, following "rate":                                                                                         
          Insert "for a residential  customer, and the retail                                                                   
     commercial power rate, for a business customer,"                                                                           
                                                                                                                                
     Page 2, following line 21:                                                                                                 
          Insert a new bill section to read:                                                                                    
       "* Sec. 4. AS 42.45.110(d) is amended to read:                                                                       
               (d) An electric utility whose customers                                                                          
          receive power cost equalization  under AS 42.45.100                                                                   
          - 42.45.150  shall set out in its  tariff the rates                                                                   
          without the power cost  equalization and the amount                                                                   
          of   power  cost   equalization   for  each   [PER]                                                               
          kilowatt-hour   sold.  The  rate  charged   to  the                                                                   
          customer  shall be the  difference between  the two                                                                   
          amounts.   Power  cost   equalization  paid   under                                                                   
          AS 42.45.100  - 42.45.150 shall  be used  to reduce                                                                   
          the  cost  of all  power  sold to  local  community                                                                   
          facilities,  in the aggregate, to the  extent of 70                                                                   
          kilowatt-hours   a  [PER]  month  for   each  [PER]                                                           
          resident of  the community, and to  reduce the cost                                                                   
          of the  first 500 kilowatt-hours for  each business                                                               
          and  each   [PER]  residential  customer   a  [PER]                                                           
          month."                                                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 24, following "residential":                                                                                  
          Insert "and business"                                                                                                 
                                                                                                                                
     Page 4, line 30:                                                                                                           
          Delete "Sections 1 and 3"                                                                                             
          Insert "Sections 1, 2, 4, and 5"                                                                                      
                                                                                                                                
     Page 4, line 31:                                                                                                           
          Delete "Section 2"                                                                                                    
          Insert "Section 3"                                                                                                    
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 11"                                                                                                   
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 7 - 10"                                                                                              
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Representative  Thomas  explained  that  Amendment  #6  would                                                                   
allow  businesses to  qualify  for the  benefits  of PCE  for                                                                   
consumption of not more than 500 kWh per month.                                                                                 
                                                                                                                                
Representative Meyer  asked for history as to  why businesses                                                                   
were  not  included.  Representative   Nelson  answered  that                                                                   
businesses  and schools  were included  for many years.  They                                                                   
were  excluded  in  the late  1990's,  when  the  legislature                                                                   
lowered  the  ceiling  and raised  the  floor  for  allowable                                                                   
residential PCE.                                                                                                                
                                                                                                                                
4:17:24 PM                                                                                                                    
                                                                                                                                
Representative  Kelly stated that  this amendment would  be a                                                                   
structural change  to a temporary solution.   The PCE program                                                                   
was meant  to be temporary, until  the problems of  roads and                                                                   
transmission  lines  were  fixed.   The  proposed  structural                                                                   
change  would best  be handled  during  regular session  with                                                                   
more time to think about it. He opposed the amendment.                                                                          
                                                                                                                                
4:18:46 PM                                                                                                                    
                                                                                                                                
Representative Hawker  argued that the amendment  does result                                                                   
in  a policy  call  that  is more  efficient,  equitable  and                                                                   
effective.  He supported the amendment.                                                                                         
                                                                                                                                
Co-Chair Meyer  asked the  cost associated with  implementing                                                                   
the amendment.                                                                                                                  
                                                                                                                                
4:20:16 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Stoltze  asked   if   Department  of   Commerce,                                                                   
Community  and  Economic  Development could  testify  to  the                                                                   
precise  definition  of  technicalities  regarding  the  term                                                                   
"business."                                                                                                                     
                                                                                                                                
Representative  Gara questioned if  the sponsor would  accept                                                                   
businesses    from   communities    of   10,000   or    less.                                                                   
Representative   Thomas   understood   that  when   PCE   was                                                                   
initiated, the  businesses in Anchorage were  not considered.                                                                   
It was easier to cut the rural  without the votes than it was                                                                   
to  cut   the  businesses  from   Anchorage.  He   wanted  to                                                                   
reintroduce fairness.                                                                                                           
                                                                                                                                
4:23:47 PM                                                                                                                    
                                                                                                                                
TARA  JOLLIE,  DIRECTOR,  COMMUNITY   AND  REGIONAL  AFFAIRS,                                                                   
DEPARTMENT  OF COMMERCE, COMMUNITY  AND ECONOMIC  DEVELOPMENT                                                                   
testified via teleconference that  the language is commercial                                                                   
as  opposed  to  non residential.  She  offered  to  do  some                                                                   
research on the language and report later.                                                                                      
                                                                                                                                
4:24:38 PM                                                                                                                    
                                                                                                                                
SARAH  FISHER-GOAD,  DEPUTY DIRECTOR  OF  OPERATIONS,  ALASKA                                                                   
INDUSTRIAL  DEVELOPMENT  AND   EXPORT  AUTHORITY  AND  ALASKA                                                                   
ENERGY  AUTHORITY,  DEPARTMENT  OF  COMMERCE,  COMMUNITY  AND                                                                   
ECONOMIC DEVELOPMENT,  commented on  potential costs  for all                                                                   
commercial customers in PCE eligible  communities. She stated                                                                   
that  those customers  have  not been  in  the program  since                                                                   
FY99.  If they came back into  the program, with a ceiling of                                                                   
72.5 cents; the estimated cost  would be $18 million dollars.                                                                   
The state  has not had commercial  customers in  this program                                                                   
for about ten years.                                                                                                            
                                                                                                                                
4:26:31 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer questioned  changing PCE  to include  non PCE                                                                   
members. Ms.  Fisher-Goad offered  to run estimates  on those                                                                   
numbers.                                                                                                                        
                                                                                                                                
Representative Kelly clarified  the legislature is not adding                                                                   
a  single   utility  or   community  to   the  PCE   program.                                                                   
Additionally,  he clarified  that the  subsidy was  allocated                                                                   
for 500 kWh;  the maximum benefit available  to a residential                                                                   
consumer  in a non  PCE community  is $25  dollars. In  a PCE                                                                   
community,  the  75  cent  ceiling  results  in  $115  dollar                                                                   
subsidy increase. Ms. Fisher-Goad  clarified that the maximum                                                                   
was $295  per month. Typically  the PCE eligible  communities                                                                   
are not reaching 500 kWh.                                                                                                       
                                                                                                                                
4:32:47 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer  addressed the issues and  questions regarding                                                                   
Amendment #6. He asked if mining  would qualify for PCE.  Ms.                                                                   
Fisher-Goad  responded  that  most  of the  high  users  self                                                                   
generate.   Golden  Valley  Electric   has  four   commercial                                                                   
customers.                                                                                                                      
                                                                                                                                
4:34:24 PM                                                                                                                    
                                                                                                                                
Representative Thomas WITHDREW Amendment #6.                                                                                    
                                                                                                                                
4:34:36 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  MOVED to  ADOPT conceptual Amendment  #7,                                                                   
#25-GH4060\C.3, Bullock, 8/1/08:                                                                                                
                                                                                                                                
     Page 1, line 1:                                                                                                            
          Delete "motor fuel tax"                                                                                             
          Insert "state motor fuel tax and municipal taxes                                                                    
     on the sale of motor fuel"                                                                                               
                                                                                                                                
     Page 1, following line 2:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. The uncodified law of the State of                                                                    
     Alaska is amended by adding a new section to read:                                                                         
          LEGISLATIVE INTENT. (a) It is the intent of the                                                                       
     legislature that                                                                                                           
               (1)  secs. 2 and 3 of this Act will result in                                                                    
     a decrease in the cost of motor fuel to the people of                                                                      
     the state by reducing the taxes applicable to the sale                                                                     
     or transfer of motor fuel; and                                                                                             
               (2)  during the suspension period described                                                                      
     in secs. 2 and 3 of this Act, no new tax be imposed by                                                                     
     the state or a municipality on the sale or transfer of                                                                     
     motor fuel.                                                                                                                
          (b)  For the purposes of (a) of this section, "new                                                                    
     tax" means a tax on the sale or transfer of motor fuel                                                                     
     that  would be applicable  after  the effective  date of                                                                   
     this  Act and that  was not  levied or collected  before                                                                   
     the effective date of this Act."                                                                                           
                                                                                                                                
     Page1, line 3:                                                                                                             
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, following line 5:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Sec. 3. The uncodified  law of the State of Alaska                                                                 
     is amended by adding a new section to read:                                                                                
          SUSPENSION OF MUNICIPAL TAXES ON THE SALE OF MOTOR                                                                    
     FUEL.  Notwithstanding  any other  provision  of law,  a                                                                   
     municipality may not levy  and collect a tax on the sale                                                                   
     of gasoline,  diesel, or aviation motor fuel  for the 12                                                                   
     consecutive  calendar months  immediately following  the                                                                   
     month of the effective date of this Act."                                                                                  
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
Representative Gara OBJECTED.                                                                                                   
                                                                                                                                
Vice-Chair Stoltze explained the  amendment which is directed                                                                   
at a large segment of energy users  and identifies motor fuel                                                                   
sales  tax. The sales  tax is  the most  regressive tax.  The                                                                   
attempt of the  amendment is to suspend sales tax.  This is a                                                                   
policy  mandate.  He  pointed  out that  individuals  in  his                                                                   
district spend the  largest portion of their  income on motor                                                                   
fuels. The amendment had been  written to a different version                                                                   
of  the bill.  Originally, he  wanted to  see this  amendment                                                                   
attached to  coincide with the  suspension period.  The other                                                                   
intent  was to  have  this amendment  apply  to home  heating                                                                   
fuel. The  amendment would  also impact  marine and  aviation                                                                   
fuel costs.                                                                                                                     
                                                                                                                                
4:39:01 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked  which  communities  have a  motor                                                                   
fuel tax. Vice-Chair  Stoltze replied that it  is rolled into                                                                   
sales tax statewide and has a  large effect on the per gallon                                                                   
price.                                                                                                                          
                                                                                                                                
Representative  Gara thought  that  many communities  already                                                                   
have policy  and he would  prefer not to interfere.  Co-Chair                                                                   
Chenault  stated that  he  was "caught  in  the middle".  The                                                                   
Borough sales tax is three cents.                                                                                               
                                                                                                                                
4:41:41 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  commented that  while he could  appreciate                                                                   
the intent  of the amendment, he  knew that the sales  tax in                                                                   
his  borough  was  used  for  education.  This  method  helps                                                                   
minimize property  taxes. In Kenai  the 3.5 cent tax  is used                                                                   
to  fund their  government. He  spoke  in favor  of the  idea                                                                   
because he  saw the need with  the price of gas so  high. The                                                                   
majority of  complaints that he  heard from his  constituents                                                                   
included the  high price of gas  and the need to  commute for                                                                   
work. He would  not support the amendment but  he agreed with                                                                   
the concept of  limiting the amount of sales  tax that cities                                                                   
charge.                                                                                                                         
                                                                                                                                
4:43:49 PM                                                                                                                    
                                                                                                                                
Representative  Hawker reported  that he  also represents  an                                                                   
area  that  has  a  large  sales  tax  and  is  dedicated  to                                                                   
education.  He agreed in  theory, but  could not support  the                                                                   
amendment  because it would  shift the  burden of the  energy                                                                   
cost to the schools or property tax payers.                                                                                     
                                                                                                                                
4:45:29 PM                                                                                                                    
                                                                                                                                
Representative  Thomas explained  that the amendment  appears                                                                   
to be an  unfunded mandate. He thought that  communities were                                                                   
going to issue  a cap on the  amount of tax they are  able to                                                                   
collect with  the rising  prices. He  said he cannot  support                                                                   
the amendment.                                                                                                                  
                                                                                                                                
Vice-Chair Stoltze disagreed that  the amendment would punish                                                                   
communities.  The  high costs  of  fuel were  unexpected.  He                                                                   
maintained  that the  excess money  was not  budgeted in  for                                                                   
schools. He termed it a significant  step toward lowering gas                                                                   
prices. He  shared a  personal story of  high gas  prices. He                                                                   
emphasized that this would be  a significant way to lower gas                                                                   
prices.                                                                                                                         
                                                                                                                                
4:51:06 PM                                                                                                                    
                                                                                                                                
Representative Gara maintained his OBJECTION.                                                                                   
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
7.                                                                                                                              
                                                                                                                                
IN FAVOR: Stoltze, Meyer                                                                                                        
OPPOSED:  Kelly,  Nelson,  Thomas,  Crawford,  Foster,  Gara,                                                                   
Hawker, Chenault                                                                                                                
                                                                                                                                
The MOTION FAILED (2-8).                                                                                                        
                                                                                                                                
4:52:34 PM                                                                                                                    
                                                                                                                                
Representative  Kelly  MOVED  to  ADOPT  Amendment  #8,  #25-                                                                   
LS1757\E.6, Kane, 8/1/08:                                                                                                       
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
          Insert  "establishing the  Alaska energy  efficient                                                                 
     home heating loan fund and a loan program using the                                                                      
     loan fund balance;"                                                                                                      
                                                                                                                                
     Page 1, following line 8:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 18.56 is amended by adding a new                                                                   
     section to read:                                                                                                           
               Sec. 18.56.415. Alaska energy efficient home                                                                   
          heating loan fund. (a)  There is established in the                                                                 
          corporation   the  Alaska  energy   efficient  home                                                                   
          heating loan fund consisting  of money appropriated                                                                   
          to  it by the  legislature and  deposited in  it by                                                                   
          the corporation.                                                                                                      
               (b)       Subject   to   appropriation,    the                                                                   
          corporation  may  provide  to  qualified  residents                                                                   
          zero-interest   loans   from  the   Alaska   energy                                                                   
          efficient  home  heating  loan  fund to  assist  in                                                                   
          installing  in  dwellings   wood,  wood-pellet,  or                                                                   
          barley-fired  stoves,  or  other  energy  efficient                                                                   
          heating systems  that meet criteria adopted  by the                                                                   
          corporation.                                                                                                          
               (c)  The corporation shall                                                                                       
                    (1)  administer the Alaska energy                                                                           
          efficient home heating loan fund; and                                                                                 
                    (2)  adopt guidelines and procedures for                                                                    
          the  fund and for  administering the loan  program,                                                                   
          both  as established under  the provisions  of this                                                                   
          section."                                                                                                             
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2                                                                                                      
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 30:                                                                                                           
          Delete "Sections 1 and 3"                                                                                             
          Insert "Sections 2 and 4"                                                                                             
                                                                                                                                
     Page 4, line 31:                                                                                                           
          Delete "Section 2"                                                                                                    
          Insert "Section 3"                                                                                                    
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 10"                                                                                                   
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 1 and 6 - 9"                                                                                         
                                                                                                                                
Co-Chair Meyer objected.                                                                                                        
                                                                                                                                
Representative  Kelly  explained that  the  amendment was  to                                                                   
provide  an alternative  home  heating loan  fund.  It is  an                                                                   
attempt  to help  those who  are trying  to help  themselves.                                                                   
Time  did  not  permit  the  inclusion  of  this  within  the                                                                   
existing program.                                                                                                               
                                                                                                                                
Representative Kelly WITHDREW Amendment 8.                                                                                      
                                                                                                                                
Co-Chair  Meyer  said  he  would  like  address  this  during                                                                   
regular session.                                                                                                                
                                                                                                                                
Representative  Kelly  realized   how  difficult  it  was  to                                                                   
include it in a regular program.                                                                                                
                                                                                                                                
4:56:10 PM                                                                                                                    
                                                                                                                                
Representative Kelly WITHDREW Amendment 9.                                                                                      
                                                                                                                                
4:57:12 PM                                                                                                                    
                                                                                                                                
Representative   Crawford   spoke   strongly  in   favor   of                                                                   
Amendments  8 and  9 and requested  that they  be brought  up                                                                   
again.  Representative Kelly agreed.                                                                                            
                                                                                                                                
4:58:35 PM                                                                                                                    
                                                                                                                                
Representative  Gara  agreed  with Amendment  9.  He  thought                                                                   
Amendment  8  could  be  introduced.   The  policy  could  be                                                                   
established, even though it would  not be effective until the                                                                   
Alaska  Housing Finance  Corporation  (AHFC) could  determine                                                                   
the  amount  of  money  needed and  the  legislature  made  a                                                                   
decision to  fund it. He thought  that it was a good  idea to                                                                   
help individuals help themselves.                                                                                               
                                                                                                                                
Co-Chair  Meyer explained  that the  amendment should  remain                                                                   
withdrawn due to the absence of AHFC.                                                                                           
                                                                                                                                
5:00:37 PM                                                                                                                    
                                                                                                                                
Representative  Nelson  MOVED to  ADOPT  Amendment #10,  #25-                                                                   
LS1757\E.11, Luckhaupt & Kane, 8/1/08:                                                                                          
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
          Insert "establishing the Alaska energy efficient                                                                    
     home heating grant fund and a grant program using the                                                                    
     grant fund balance;"                                                                                                     
                                                                                                                                
     Page 1, following line 8:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 18.56 is amended by adding a new                                                                   
     section to read:                                                                                                           
               Sec. 18.56.415. Alaska energy efficient home                                                                   
          heating  grant fund.  (a) There  is established  in                                                                 
          the  corporation the  Alaska energy efficient  home                                                                   
          heating    grant   fund    consisting   of    money                                                                   
          appropriated   to  it   by   the  legislature   and                                                                   
          deposited in it by the corporation.                                                                                   
               (b)       Subject   to   appropriation,    the                                                                   
          corporation  may  provide  to  qualified  residents                                                                   
          grants  of  up to  $1,000  from the  Alaska  energy                                                                   
          efficient  home  heating grant  fund  to assist  in                                                                   
          installing  in  dwellings   wood,  wood-pellet,  or                                                                   
          barley-fired  stoves,  or  other  energy  efficient                                                                   
          heating systems  that meet criteria adopted  by the                                                                   
          corporation.                                                                                                          
               (c)  The corporation shall                                                                                       
                    (1)  administer the Alaska energy                                                                           
          efficient home heating grant fund; and                                                                                
                    (2)  adopt guidelines and procedures for                                                                    
          the fund  and for administering the  grant program,                                                                   
          both  as established under  the provisions  of this                                                                   
          section."                                                                                                             
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 30:                                                                                                           
          Delete "Sections 1 and 3"                                                                                             
          Insert "Sections 2 and 4"                                                                                             
                                                                                                                                
     Page 4, line 31:                                                                                                           
          Delete "Section 2"                                                                                                    
          Insert "Section 3"                                                                                                    
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 10"                                                                                                   
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 1 and 6 - 9"                                                                                         
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Representative Nelson  explained that this  amendment deletes                                                                   
75  cents  as  the  cap  for  PCE  eligible  communities  and                                                                   
increases  it to $1.15.  More than  seventy communities  have                                                                   
electricity costs well over the cap of 75 cents.                                                                                
                                                                                                                                
5:02:48 PM                                                                                                                    
                                                                                                                                
Representative Nelson WITHDREW Amendment 10.                                                                                    
                                                                                                                                
5:03:10 PM                                                                                                                    
                                                                                                                                
Representative  Nelson  MOVED to  ADOPT  Amendment #11,  #25-                                                                   
LS1757\E.10, Kane, 8/1/08:                                                                                                      
                                                                                                                                
     Page 2, line 5:                                                                                                            
          Delete "75 cents"                                                                                                     
          Insert "$1.15"                                                                                                        
                                                                                                                                
Co-Chair Meyer OBJECTED.                                                                                                        
                                                                                                                                
Representative  Nelson explained  that amendment #11  changes                                                                   
the  calculation  of  PCE  floor to  take  into  account  the                                                                   
proposed 5 cent  reduction in electric rates for  the non PCE                                                                   
users. If the floor is tied to  the weighted average of urban                                                                   
utilities, then  the floor should  reflect the  rate actually                                                                   
paid by the consumers in the PCE  communities. Co-Chair Meyer                                                                   
summarized the intent as spreading  the floor and the ceiling                                                                   
to the  amount before the  non PCE was added.  Representative                                                                   
Nelson concurred.                                                                                                               
Ms. Armstrong  explained how the  formula is structured.  She                                                                   
noted  that it does  not apply  to the  current formula.  She                                                                   
explained the  lower limit is  12 cents according to  the way                                                                   
the statute is written.                                                                                                         
                                                                                                                                
5:05:53 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked  if this is in conflict  with a previous                                                                   
amendment.  Ms.   Armstrong  explained   that  there   is  no                                                                   
equalization  that occurs  after the  formula is  calculated.                                                                   
There is no potential for equalization  after the calculation                                                                   
occurs.                                                                                                                         
                                                                                                                                
Representative Nelson  said her intent was to  bring the rate                                                                   
down 5 cents for PCE and non PCE users.                                                                                         
                                                                                                                                
Co-Chair Meyer clarified  that the intention is  to lower the                                                                   
floor from  12.8 down to 7.8.  He said there would  be a cost                                                                   
associated  with lowering  the  floor. Representative  Nelson                                                                   
spoke  to  the intent  of  PCE  program.  She felt  that  the                                                                   
program  was helping rural  Alaskans but  not addressing  the                                                                   
disparity. Having  made her point, she chose  to withdraw the                                                                   
amendment because it was confusing.                                                                                             
                                                                                                                                
Representative Nelson WITHDREW Amendment 11.                                                                                    
                                                                                                                                
5:07:59 PM                                                                                                                    
                                                                                                                                
Representative  Nelson  MOVED to  ADOPT  Amendment 10,  which                                                                   
would delete "75 cents" and insert  "$1.15.".  Co-Chair Meyer                                                                   
OBJECTED.                                                                                                                       
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR: Nelson, Crawford, Foster, Gara                                                                                        
OPPOSED: Kelly, Stoltze, Thomas, Hawker, Meyer, Chenault                                                                        
                                                                                                                                
The MOTION FAILED (4-6).                                                                                                        
                                                                                                                                
5:09:45 PM                                                                                                                    
                                                                                                                                
Representative Nelson MOVED to  ADOPT Amendment #12. Co-Chair                                                                   
Meyer OBJECTED.                                                                                                                 
                                                                                                                                
     The proposed changes were:                                                                                                 
     Page 3, line 23:                                                                                                           
     Delete "$170"                                                                                                              
     Insert "$300"                                                                                                              
                                                                                                                                
     Page 3, Line 31:                                                                                                           
     Delete "$170"                                                                                                              
     Insert "$300"                                                                                                              
                                                                                                                                
Representative Nelson explained  that the figures are related                                                                   
to  LIHEAP. She  noted  she was  attempting  to increase  the                                                                   
number for possible future need.                                                                                                
                                                                                                                                
Representative Kelly  referred to the debate  on Amendment 1.                                                                   
He said  his reasons  against the amendment  are the  same as                                                                   
stated during the discussion on Amendment 1.                                                                                    
                                                                                                                                
Representative  Gara MOVED to  ADOPT conceptual  amendment to                                                                   
Amendment 12 -increasing the point  system to $170 as written                                                                   
in the CS. Vice-Chair Stoltze OBJECTED.                                                                                         
                                                                                                                                
Representative  Gara explained  his  reasoning. He  suggested                                                                   
raising the  amount of the cap  and argued for it.  The money                                                                   
would only  be available for  those in serious  need. Heating                                                                   
costs for some Alaskans will be substantial.                                                                                    
                                                                                                                                
5:14:50 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  spoke to his  objection. He  commented on                                                                   
$2000  a month for  fuel heating  and felt  that this  number                                                                   
might  reflect   inefficient   heating.  He  questioned   the                                                                   
accuracy   of    the   $2000   per   month    heating   bill.                                                                   
Representative Nelson  said that $11 per gallon  is accurate.                                                                   
Vice-Chair  Stoltze  thought  the  number was  too  high  and                                                                   
irrelevant.                                                                                                                     
                                                                                                                                
Representative  Nelson stated  that the  rates were  accurate                                                                   
before the weatherization program was implemented.                                                                              
                                                                                                                                
5:16:33 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  observed  that the  dollar  amount  being                                                                   
discussed  is "per  point."  The legislature  cannot  address                                                                   
every need, but the best package will be developed.                                                                             
                                                                                                                                
Co-Chair Meyer commented that  most rural homes would qualify                                                                   
for the full 35 points. He maintained  that those individuals                                                                   
who need energy assistance would get help.                                                                                      
                                                                                                                                
Representative Nelson argued that  raising the cap would keep                                                                   
it from  being written  in statute.  The cap  has never  been                                                                   
written  in statute.  The intention  of the  amendment is  to                                                                   
help the  poorest  people if the  price of  oil continues  to                                                                   
rise.                                                                                                                           
                                                                                                                                
Co-Chair Meyer  said that  if the price  of oil continues  to                                                                   
rise, then this issue will be visited next session.                                                                             
                                                                                                                                
A roll call vote  was taken on the motion to  amend Amendment                                                                   
12.                                                                                                                             
                                                                                                                                
IN FAVOR: Nelson, Crawford, Foster, Gara, Hawker                                                                                
OPPOSED: Stoltze, Thomas, Kelly, Chenault, Meyer                                                                                
                                                                                                                                
The MOTION FAILED (5-5.)                                                                                                        
                                                                                                                                
5:21:26 PM                                                                                                                    
                                                                                                                                
Representative Nelson WITHDREW Amendment 12.                                                                                    
                                                                                                                                
5:21:57 PM                                                                                                                    
                                                                                                                                
Representative  Nelson  MOVED to  ADOPT  Amendment #13,  #25-                                                                   
LS1757\E.5, Mischel & Kane, 7/31/08:                                                                                            
                                                                                                                                
     Page 1, line 1, following "Act":                                                                                         
          Insert "amending the bulk fuel bridge loan fund;"                                                                   
                                                                                                                                
     Page 1, following line 8:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 29.60.660(c) is amended to read:                                                                   
               (c)  Loans made from the bulk fuel bridge                                                                        
          loan fund to one borrower in a fiscal year                                                                            
                    (1)  may not exceed $750,000 [$500,000];                                                                
          and                                                                                                                   
                    (2)  shall be repaid within one year                                                                        
          after the date of the award."                                                                                         
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 3, following line 5:                                                                                                  
          Insert a new bill section to read:                                                                                    
       "* Sec. 5. AS 42.45.250(e) is amended to read:                                                                       
               (e)  Loans made from the bulk fuel revolving                                                                     
          loan fund to one borrower in any fiscal year                                                                          
                    (1)  may not exceed $750,000 [$500,000],                                                                
          or,  if the borrower  is a cooperative  corporation                                                                   
          organized    under   AS 10.15   or    an   electric                                                                   
          cooperative  organized under AS 10.25 and  uses the                                                                   
          loan to  purchase bulk fuel on behalf  of more than                                                                   
          one  community,  may   not  exceed  the  lesser  of                                                                   
          $750,000  [$500,000]  multiplied by  the number  of                                                               
          communities on whose  behalf the bulk fuel is to be                                                                   
          purchased, or $1,800,000;                                                                                             
                    (2)  shall be repaid in one year or                                                                         
          less; and                                                                                                             
                    (3)  may not exceed 90 percent of the                                                                       
          wholesale price of the fuel purchased."                                                                               
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, line 30:                                                                                                           
          Delete "Sections 1 and 3"                                                                                             
          Insert "Sections 2 and 4"                                                                                             
                                                                                                                                
     Page 4, line 31:                                                                                                           
          Delete "Section 2"                                                                                                    
          Insert "Section 3"                                                                                                    
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 11"                                                                                                   
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 7 - 10"                                                                                              
                                                                                                                                
 Vice-Chair Stoltze objected.                                                                                                   
                                                                                                                                
Representative Nelson explained that the amendment amends                                                                       
the bulk fuel bridge loan fund. The loan amount would be                                                                        
increased from $500.000 to $750.000.                                                                                            
                                                                                                                                
5:23:13 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault requested the administration's opinion                                                                        
regarding the increased loan and the appropriate amount.                                                                        
                                                                                                                                
5:23:59 PM                                                                                                                    
                                                                                                                                
AMANDA RYDER, DIRECTOR, DIVISION  OF ADMINISTRATIVE SERVICES,                                                                   
DEPARTMENT OF  COMMERCE, COMMUNITY AND ECONOMIC  DEVELOPMENT,                                                                   
explained  that the loan  cap increase  would cost  the state                                                                   
more money. The  bulk fuel bridge fund would  need about $2.5                                                                   
million  more and  the bulk  fuel revolving  loan fund  would                                                                   
require  an additional  $5.5 million.  As the  cap rises  and                                                                   
larger loan are  obtained, increased funds will  be necessary                                                                   
for both funds.                                                                                                                 
                                                                                                                                
Co-Chair   Chenault  asked   about   potential  increase   in                                                                   
administrative costs.                                                                                                           
                                                                                                                                
Ms. Ryder  said that there  would be an anticipated  increase                                                                   
estimated at $200  thousand to operate a $5  million program.                                                                   
She did not  have definitive numbers, but would  get those to                                                                   
the committee as soon as possible.                                                                                              
                                                                                                                                
Co-Chair  Chenault  asked  about   administrative  costs  and                                                                   
whether  they would be  recouped through  the revolving  loan                                                                   
fund.                                                                                                                           
                                                                                                                                
Ms.   Ryder   explained   how    administrative   costs   are                                                                   
appropriated  from the  fund.  Without an  appropriation  the                                                                   
Department  of Community  and  Regional  Affairs (DCRA)  will                                                                   
have to absorb the administrative expenses.                                                                                     
Co-Chair Chenault restated his  question.  Ms. Ryder reported                                                                   
that the bulk fuel bridge loan  fund is a zero interest fund,                                                                   
and  is  designed  as  a  last  resort.  It  differs  from  a                                                                   
revolving  loan  fund  which,  earns  interest  and  supports                                                                   
itself.                                                                                                                         
                                                                                                                                
Ms. Ryder  said that the  administration had requested  about                                                                   
four percent from the fund for administrative costs.                                                                            
                                                                                                                                
5:28:14 PM                                                                                                                    
                                                                                                                                
Representative   Hawker   had    difficulty   accepting   the                                                                   
administration's  need  for  an  increase  in  administrative                                                                   
costs. The  amount of borrowers  has not increased,  only the                                                                   
amount  available to  loan. He  encouraged  attention to  the                                                                   
fiscal note.                                                                                                                    
                                                                                                                                
5:30:19 PM                                                                                                                    
                                                                                                                                
Representative  Hawker   took  issue  with  the   amount  the                                                                   
increased  administration   needs  would  cost.   He  thought                                                                   
"implement" would be a better choice of words than "cost."                                                                      
                                                                                                                                
5:31:11 PM                                                                                                                    
                                                                                                                                
Ms.  Ryder  agreed  that  better   terminology  would  be  to                                                                   
anticipate  additional "needs"  resulting  from the  proposed                                                                   
increase in loan funds.                                                                                                         
                                                                                                                                
Representative  Hawker  observed  that  the  amendment  would                                                                   
affect the  title of the  bill and the  drafters of  the bill                                                                   
should be notified.                                                                                                             
                                                                                                                                
Representative Nelson suggested changing the title now.                                                                         
                                                                                                                                
5:32:39 PM                                                                                                                    
                                                                                                                                
Representative Hawker  moved to adopt a  conceptual amendment                                                                   
to Amendment  13 to amend the  language on Line 2  to reflect                                                                   
both  components  of the  bill.  This  amends the  bulk  fuel                                                                   
bridge  loan fund  and  the bulk  fuel  revolving loan  fund.                                                                   
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
5:33:50 PM                                                                                                                    
                                                                                                                                
Representative  Kelly asked if  the administration  supported                                                                   
this.                                                                                                                           
                                                                                                                                
Ms.  Fisher-Goad  stated  that the  Alaska  Energy  Authority                                                                   
(AEA) agrees with amending the  bulk fuel revolving loan fund                                                                   
to increase  the cap.  Ms. Ryder commented  that DCRA  has no                                                                   
objection  to raising  the cap, but  they request  additional                                                                   
funding.                                                                                                                        
                                                                                                                                
There being NO OBJECTION, Amendment 13 was adopted.                                                                             
                                                                                                                                
AT-EASE:       5:35:34 PM                                                                                                     
RECONVENE:6:53:12 PM                                                                                                          
                                                                                                                                
Representative  Gara MOVED to  ADOPT new Amendment  #14, #25-                                                                   
LS1757\E.7, Bullock & Kane, 8/1/08:                                                                                             
                                                                                                                                
     Page 1, line 7, following "tax":                                                                                         
          Insert "during certain  months based on the average                                                                 
     price per barrel for Alaska North Slope crude oil for                                                                    
     sale on the United States West Coast"                                                                                    
                                                                                                                                
     Page 3, following line 5:                                                                                                  
          Insert new bill sections to read:                                                                                     
       "* Sec. 4. AS 43.40.010(c) is amended to read:                                                                       
               (c)  Except as provided in AS 43.40.013,                                                                     
          [EVERY]  dealer who  sells  or otherwise  transfers                                                                   
          motor fuel  in the state  shall collect the  tax at                                                                   
          the  time   of  sale,  and  remit   the  total  tax                                                                   
          collected during  each calendar month  of each year                                                                   
          to  the   department  by  the  last   day  of  each                                                                   
          succeeding  month. Every user shall  likewise remit                                                                   
          the tax accrued on motor  fuel actually used by the                                                                   
          user during  each month. If the monthly  tax return                                                                   
          is timely  filed, one percent of the  total monthly                                                                   
          tax  due, limited  to  a maximum  of  $100, may  be                                                                   
          deducted  and  retained  to cover  the  expense  of                                                                   
          accounting  and filing the  monthly tax  return. At                                                                   
          the  time the  remittance is  made, each dealer  or                                                                   
          user  shall submit  a statement  to the  department                                                                   
          showing  all fuel that  [WHICH] the dealer  or user                                                               
         has distributed or used during the month.                                                                              
        * Sec. 5. AS 43.40 is amended by adding a new                                                                         
     section to read:                                                                                                           
               Sec. 43.40.013. Temporary suspension of tax                                                                    
          collection. (a) The  collection of the tax required                                                                 
          to be collected under  AS 43.40.010(c) is suspended                                                                   
          for  the calendar month  immediately following  the                                                                   
          end  of a 30-day  period during  which the  average                                                                   
          price per  barrel for Alaska North  Slope crude oil                                                                   
          for sale  on the United  States West Coast  is more                                                                   
          than $80.                                                                                                             
               (b)  The department shall adjust the average                                                                     
          price per  barrel in (a)  of this section  based on                                                                   
          the  percentage  increase  in  the  Consumer  Price                                                                   
          Index for  urban wage earners and  clerical workers                                                                   
          for   Anchorage,   Alaska,  during   the   previous                                                                   
          calendar year,  as determined by the  United States                                                                   
          Department of Labor, Bureau of Labor Statistics.                                                                      
               (c)  The department shall adopt regulations                                                                      
          necessary   to  implement   this   section  and   a                                                                   
          procedure  for  notifying persons  responsible  for                                                                   
          the  collection  of the  tax levied  and  collected                                                                   
          under this chapter."                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 4, lines 13 - 29:                                                                                                     
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete all material.                                                                                                  
                                                                                                                                
     Renumber the following bill section accordingly.                                                                           
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 4, 5, and 7 - 10"                                                                                    
                                                                                                                                
 Co-Chair Meyer OBJECTED.                                                                                                       
                                                                                                                                
Representative  Gara explained the  amendment. The  budget is                                                                   
roughly balanced  at $70 dollars  per barrel. When  the price                                                                   
of oil is over $80 per barrel,  the gas tax is applied to all                                                                   
sales and when  the price of oil is less than  $80 per barrel                                                                   
then the gas tax is suspended.                                                                                                  
                                                                                                                                
6:56:58 PM                                                                                                                    
                                                                                                                                
Representative Crawford disagreed  that the suspension of the                                                                   
gas tax  makes sense at  any price. He  did not see  that the                                                                   
consumer would benefit from a  suspension. He did not support                                                                   
the amendment.                                                                                                                  
                                                                                                                                
Co-Chair Meyer clarified that  Representative Gara was not in                                                                   
support  of the  gas tax  suspension either,  but a  variable                                                                   
means of implementing it instead.                                                                                               
                                                                                                                                
Vice-Chair  Stoltze wanted  the clean  and simple version  of                                                                   
the gas tax. He reiterated that  the motorists are in need of                                                                   
help. He opposed the amendment.                                                                                                 
                                                                                                                                
6:59:41 PM                                                                                                                    
                                                                                                                                
Mr. Burnett voiced  concern with administering  the tax under                                                                   
the proposed amendment.  It could potentially  be as volatile                                                                   
as oil prices are. The larger  issue is the confusion for the                                                                   
consumers.  He  noted  the competitive  disadvantage  to  the                                                                   
merchants who buy a large inventory  and sell it over time. A                                                                   
smaller player is likely to have  a competitive disadvantage.                                                                   
It is an administrative problem.                                                                                                
                                                                                                                                
Representative   Gara  WITHDREW   Amendment  #14  (new).   He                                                                   
commented  that   his  intention  was  not   to  over  charge                                                                   
consumers. "To  most effectively relieve  consumers' burdens,                                                                   
take  the  $40 million  and  give  it  to the  gas  retailers                                                                   
instead of the refiners." That  is the way to get $40 million                                                                   
to consumers.                                                                                                                   
                                                                                                                                
Co-Chair Meyer noted  that he liked the amendment  because it                                                                   
is only in effect when necessary.                                                                                               
                                                                                                                                
7:02:46 PM                                                                                                                    
                                                                                                                                
Representative Crawford MOVED to ADOPT Amendment #15:                                                                           
                                                                                                                                
     Page 4, before Line 1 add  Sec. 8. The uncodified law of                                                                   
     the state of  Alaska is amended by adding  a new section                                                                   
     to read:                                                                                                                   
                                                                                                                                
     MOTOR  FUEL  REBATE. (a)  To  provide residents  of  the                                                                   
     state with a rebate equivalent  to the state motor fuels                                                                   
     tax,  the amount  of the  2008  permanent fund  dividend                                                                   
     shall be  increased. (b)  Subject to appropriation,  sum                                                                   
     of   $40,000,000  to   increase   2008  permanent   fund                                                                   
     dividends   under   (a)  of   this   section  shall   be                                                                   
     transferred from  the general fund to the  dividend fund                                                                   
     (AS 43.23.045).                                                                                                            
     Page 4, line 12                                                                                                            
     "The  resource and  motor fuel  rebates are  [is] a  one                                                                   
     time payment to qualified Alaskans."                                                                                       
                                                                                                                                
     Page 4, line 13 through 29                                                                                                 
     Delete all information                                                                                                     
                                                                                                                                
     Page 5, line 1                                                                                                             
     Delete all information                                                                                                     
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Representative  Crawford explained  that this amendment  does                                                                   
not suspend the motor fuel tax;  instead it takes the revenue                                                                   
and gives it to Alaskans via the permanent dividend fund.                                                                       
                                                                                                                                
7:03:49 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  clarified the  intent to collect  the tax                                                                   
from   Alaskan  motorists   and   redistribute  the   revenue                                                                   
statewide. He  wanted to see  the fuel customers  receive the                                                                   
actual benefit.                                                                                                                 
                                                                                                                                
7:04:57 PM                                                                                                                    
                                                                                                                                
Vice-Chair   Stoltze    expressed   familiarity    with   the                                                                   
redistribution principle.  Co-Chair Meyer commented  that the                                                                   
legislature  did not know  what the actual  benefit of  a gas                                                                   
tax suspension  would be to the  consumer. He wanted  to keep                                                                   
the eight cent suspension.                                                                                                      
                                                                                                                                
Representative  Crawford  advised that  the  money be  placed                                                                   
into  the  PFD  payment,  which  would  provide  another  $40                                                                   
million for the Alaskan consumer.                                                                                               
                                                                                                                                
Representative  Gara commented  that  the proposed  amendment                                                                   
was more  efficient than the gas  tax. Roughly 30  percent of                                                                   
the gas tax will  be eaten up by the commercial  sector. This                                                                   
is  the  more  efficient  way  to  give  the  money  back  to                                                                   
Alaskans. There is  no evidence that the eight  cents will be                                                                   
distributed back to consumers in the rural areas.                                                                               
                                                                                                                                
Co-Chair Meyer  asked how much  money would be  allocated per                                                                   
person   under  this   amendment.   Representative   Crawford                                                                   
answered $59 per person.                                                                                                        
                                                                                                                                
7:08:24 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze  stated that  the legislature  cannot give                                                                   
the money  to the people  unless it is  taken away  first. He                                                                   
preferred not charging it in the first place.                                                                                   
                                                                                                                                
Representative   Gara   noted   the   similarities   in   the                                                                   
redistribution of $1200 as a resource rebate.                                                                                   
                                                                                                                                
Representative  Crawford  stated that  all  sales would  have                                                                   
records from  the Highway Trust  Funds; good reason  to leave                                                                   
gas tax in place.  To get the money back to  the people, this                                                                   
proposal is the best.                                                                                                           
                                                                                                                                
7:11:09 PM                                                                                                                    
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
15.                                                                                                                             
                                                                                                                                
IN FAVOR: Crawford, Gara, Foster                                                                                                
OPPOSED: Stoltze, Thomas, Hawker, Kelly, Meyer, Chenault                                                                        
                                                                                                                                
Representative  Joule  and  Representative  Nelson  were  not                                                                   
present for the vote.                                                                                                           
                                                                                                                                
The MOTION FAILED (3-6).                                                                                                        
                                                                                                                                
7:12:06 PM                                                                                                                    
                                                                                                                                
Representative Crawford MOVED to ADOPT Amendment #16:                                                                           
                                                                                                                                
     Page 4,  following line 12  Insert a subsection  to read                                                                   
     "(d) Notwithstanding AS 43.23.015,  and other provisions                                                                   
     of law, an individual may  elect to contribute from that                                                                   
     individual's  2008   permanent  fund  dividend   to  the                                                                   
     renewable  energy   grant  fund  established   under  AS                                                                   
     4245.045  an amount  equal  to one  half  of the  Alaska                                                                   
     Resource Rebate  described in this section.  An election                                                                   
     to contribute under this  subsection may be made only on                                                                   
     a form  provided by  the Department  of Revenue  that is                                                                   
     received  by the  department on or  before September  2,                                                                   
     2008. An agency  or individual who applied  for the 2008                                                                   
     permanent fund dividend on  behalf of another individual                                                                   
     may  not   elect  to  contribute  form   that  dividend.                                                                   
     Notwithstanding  an election  to  contribute under  this                                                                   
     subsection,  the Department of  Revenue may not  pay any                                                                   
     money  form  a  2008  permanent  fund  dividend  to  the                                                                   
     renewable  energy grant  fund if  the dividend  has been                                                                   
     claimed  or  assigned,  in   whole  or  part,  under  AS                                                                   
     43,23,065-43.23.073."                                                                                                      
                                                                                                                                
Co-Chair Meyer OBJECTED.                                                                                                        
                                                                                                                                
Representative   Crawford  explained   that  this   voluntary                                                                   
reallocation  of the resource  rebate  would go to  renewable                                                                   
resource fund.                                                                                                                  
                                                                                                                                
7:13:13 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer  pointed  out  that  this  was  discussed  in                                                                   
Amendment  #1.  He asked  for  testimony from  Department  of                                                                   
Revenue.                                                                                                                        
                                                                                                                                
Co-Chair Meyer  asked if there  was currently a way  to check                                                                   
off  for  this  fund.  Mr.  Burnett   replied  there  is  not                                                                   
currently  a check  off on  the Permanent  Dividend Fund  for                                                                   
this fund.                                                                                                                      
                                                                                                                                
7:14:20 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault  asked if there  was a reason why  a person                                                                   
could not  write their own check  if their preference  was to                                                                   
donate  the money.  Mr.  Burnett advised  that  there was  no                                                                   
difference. It would be a tax  deductable donation. The issue                                                                   
is that  it is  late in  the administrative  process and  the                                                                   
checks would  have to be  manually processed.  The Department                                                                   
does have  a check off for  charitable donations.  The change                                                                   
would be difficult to implement for FY08.                                                                                       
                                                                                                                                
7:16:16 PM                                                                                                                    
                                                                                                                                
Representative Hawker  had his questions about  the practical                                                                   
mechanics  of  the  proposal answered  by  Mr.  Burnett.  Mr.                                                                   
Burnett explained the manual process  of each of the payments                                                                   
received.                                                                                                                       
                                                                                                                                
Vice-Chair  Stoltze  asked  whether this  was  the  mechanism                                                                   
included  in  Representative   Thomas'  bill.  Representative                                                                   
Thomas clarified  that the legislation  would go  into effect                                                                   
next year. Mr.  Burnett informed that the  legislation passed                                                                   
during the last  session allows for check offs  for qualified                                                                   
charitable   organizations.    This   amendment   would   not                                                                   
automatically  be added  to that check-off  list, because  it                                                                   
was for non profits that meet  certain criteria. The addition                                                                   
would  not be a  problem for  future dividends,  yet at  this                                                                   
late date the change would be difficult.                                                                                        
                                                                                                                                
Vice-Chair  Stoltze asked  if this  amendment would  qualify.                                                                   
Mr. Burnett did not think it would qualify.                                                                                     
                                                                                                                                
Representative  Hawker asked why  the limit  was one  half of                                                                   
the rebate rather than the entire  amount. He felt that if an                                                                   
individual  was interested  in  donating  their rebate  check                                                                   
they  may as  well  donate the  whole  check. Co-Chair  Meyer                                                                   
agreed and recommended removing it.                                                                                             
                                                                                                                                
7:20:15 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze WITHDREW the  OBJECTION.   Representative                                                                   
Hawker OBJECTED.                                                                                                                
                                                                                                                                
A roll call vote  was taken on the motion to  adopt Amendment                                                                   
16.                                                                                                                             
                                                                                                                                
IN FAVOR: Thomas, Crawford, Gara                                                                                                
OPPOSED: Foster, Hawker, Kelly, Stoltze, Chenault, Meyer                                                                        
                                                                                                                                
Representative  Nelson  and  Representative  Joule  were  not                                                                   
present for the vote.                                                                                                           
                                                                                                                                
The MOTION FAILED (3-6).                                                                                                        
                                                                                                                                
7:21:20 PM                                                                                                                    
                                                                                                                                
Representative Thomas MOVED to ADOPT new Amendment #6:                                                                          
                                                                                                                                
     Page 1, following line 8:                                                                                                  
          Insert a new bill section to read:                                                                                    
        "* Section 1. AS 42.45.110(b) is amended to read:                                                                   
               (b)  An eligible electric utility is entitled                                                                    
          to receive power cost equalization                                                                                    
                    (1)  for sales of power to local                                                                            
          community  facilities, calculated in  the aggregate                                                                   
          for each community served  by the electric utility,                                                                   
          for  actual   consumption  of  not  more   than  70                                                                   
          kilowatt-hours  a month  for each  resident of  the                                                                   
          community; the number  of community residents shall                                                                   
          be  determined annually  by the  latest figures  of                                                                   
          the  United States  Bureau of  the Census  or other                                                                   
          population  data that  the Department of  Commerce,                                                                   
          Community,  and Economic Development  determines is                                                                   
          reliable; and                                                                                                         
                    (2)  for actual consumption of not more                                                                     
          than  500  kilowatt-hours  a  month  sold  to  each                                                                   
          residential and commercial customer."                                                                             
                                                                                                                                
     Page 1, line 9:                                                                                                            
          Delete "Section 1"                                                                                                  
          Insert "Sec. 2"                                                                                                     
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 1, line 13, following "rate":                                                                                         
          Insert "for a residential  customer, and the retail                                                                   
     commercial power rate, for a commercial customer,"                                                                         
                                                                                                                                
     Page 2, line 19, following "rate":                                                                                         
          Insert "for a residential  customer, and the retail                                                                   
     commercial power rate, for a commercial customer,"                                                                         
                                                                                                                                
     Page 2, following line 21:                                                                                                 
          Insert a new bill section to read:                                                                                    
       "* Sec. 4. AS 42.45.110(d) is amended to read:                                                                       
               (d) An electric utility whose customers                                                                          
          receive power cost equalization  under AS 42.45.100                                                                   
          - 42.45.150  shall set out in its  tariff the rates                                                                   
          without the power cost  equalization and the amount                                                                   
          of   power  cost   equalization   for  each   [PER]                                                               
          kilowatt-hour   sold.  The  rate  charged   to  the                                                                   
          customer  shall be the  difference between  the two                                                                   
          amounts.   Power  cost   equalization  paid   under                                                                   
          AS 42.45.100  - 42.45.150 shall  be used  to reduce                                                                   
          the  cost  of all  power  sold to  local  community                                                                   
          facilities,  in the aggregate, to the  extent of 70                                                                   
          kilowatt-hours   a  [PER]  month  for   each  [PER]                                                           
          resident of  the community, and to  reduce the cost                                                                   
          of the first 500 kilowatt-hours for each                                                                          
          commercial and each [PER] residential customer a                                                              
          [PER] month."                                                                                                         
                                                                                                                                
     Renumber the following bill sections accordingly.                                                                          
                                                                                                                                
     Page 2, line 24, following "residential":                                                                                  
          Insert "and commercial"                                                                                               
                                                                                                                                
     Page 4, line 30:                                                                                                           
          Delete "Sections 1 and 3"                                                                                             
          Insert "Sections 1, 2, 4, and 5"                                                                                      
                                                                                                                                
     Page 4, line 31:                                                                                                           
          Delete "Section 2"                                                                                                    
          Insert "Section 3"                                                                                                    
                                                                                                                                
     Page 5, line 1:                                                                                                            
          Delete "Section 9"                                                                                                    
          Insert "Section 11"                                                                                                   
                                                                                                                                
     Page 5, line 2:                                                                                                            
          Delete "Sections 5 - 8"                                                                                               
          Insert "Sections 7 - 10"                                                                                              
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
7:22:56 PM                                                                                                                    
                                                                                                                                
Ms. Fisher-Goad elaborated that  the term "commercial" is the                                                                   
term most  often used when  discussing utilities  rather that                                                                   
the  before stated  "business."  This amendment  would  allow                                                                   
these commercial customers eligibility to PCE.                                                                                  
                                                                                                                                
Representative  Hawker understood  that  the amendment  would                                                                   
only  extend the  PCE  program  for commercial  customers  in                                                                   
those  communities  under 10,000  people,  while  communities                                                                   
over  10,000   would  not  be  eligible  for   PCE  benefits.                                                                   
Representative  Thomas  thought  that the  communities  above                                                                   
10,000 have been  eligible for the discounted  rate. He would                                                                   
like  to see  more equity.  Representative Hawker  reiterated                                                                   
the concern.                                                                                                                    
                                                                                                                                
Co-Chair Meyer asked if the amendment  was written correctly.                                                                   
Representative Hawker replied  that it was written correctly.                                                                   
                                                                                                                                
7:26:26 PM                                                                                                                    
                                                                                                                                
Representative  Kelly clarified that  for more than  a decade                                                                   
these customers  were excluded,  in times  when oil  was high                                                                   
and low and  adding in the commercial class.  Ms. Fisher-Goad                                                                   
did not think  that there was a community larger  than 10,000                                                                   
that was eligible for PCE.                                                                                                      
                                                                                                                                
Co-Chair Meyer  asked if this  fell under the section  of PCE                                                                   
up for review in two years. Ms.  Fisher-Goad believed that it                                                                   
would not  be subject  to Amendment#1;  she believed  that it                                                                   
would be a permanent change and not subject to any sunset.                                                                      
                                                                                                                                
Co-Chair  Meyer supposed  that the  legislature could  always                                                                   
review this amendment again.                                                                                                    
                                                                                                                                
7:28:40 PM                                                                                                                    
                                                                                                                                
Representative  Crawford asked if  this amendment  would have                                                                   
any effect  for non PCE  recipients. Ms. Fisher-Goad  replied                                                                   
yes. Co-Chair  Meyer followed-up that the  seafood processors                                                                   
in Dutch  Harbor would qualify.  Ms. Fisher-Goad  stated that                                                                   
any PCE  communities through  Page 5  would be eligible.  The                                                                   
Legislature has  funded PCE at  100 percent for  FY2008, with                                                                   
the intent  of funding PCE at  100 percent going  forward. If                                                                   
in  the  future  PCE  was  again   prorated,  the  commercial                                                                   
customers  would  be  prorated  along  with  the  residential                                                                   
customers.                                                                                                                      
                                                                                                                                
7:30:34 PM                                                                                                                    
                                                                                                                                
Representative Hawker  supported the amendment.  He asked for                                                                   
consideration of  other PCE changes  that do have  sunset. He                                                                   
urged  consideration  of  a  sunset.   Representative  Thomas                                                                   
supported   the  language.   Ms.   Fisher-Goad  suggested   a                                                                   
conceptual  amendment allowing  for sunset  on June  30 2011,                                                                   
which is consistent with other PCE policy.                                                                                      
                                                                                                                                
Representative Thomas commented  on the conceptual amendment.                                                                   
                                                                                                                                
7:31:53 PM                                                                                                                    
                                                                                                                                
Representative Hawker MOVED To  ADOPT conceptual amendment to                                                                   
New  Amendment 6,  to apply  a  sunset provision  on June  30                                                                   
2011, which is consistent with  other PCE policy. There being                                                                   
NO OBJECTION, it was so ordered.                                                                                                
                                                                                                                                
A  roll call  vote  was  taken on  the  motion  to adopt  New                                                                   
Amendment #6 as amended.                                                                                                        
                                                                                                                                
IN FAVOR: Crawford, Foster, Gara, Hawker, Nelson, Thomas                                                                        
OPPOSED: Kelly, Stoltze, Chenault, Meyer                                                                                        
                                                                                                                                
The MOTION PASSED (6-4)                                                                                                         
                                                                                                                                
7:33:46 PM                                                                                                                    
                                                                                                                                
Representative Thomas WITHDREW Amendment #17.                                                                                   
                                                                                                                                
Co-Chair  Chenault   MOVED  to  ADOPT  Amendment   #18,  #25-                                                                   
LS1757\E.30, Kane, 8/2/08:                                                                                                      
                                                                                                                                
     Page 2, line 31, following "that":                                                                                         
          Insert "(1)"                                                                                                          
                                                                                                                                
     Page 3, line 3, following "AS 42.45.150(2)(B) - (C)":                                                                      
          Insert "; and                                                                                                         
                    (2)  the executive director of the                                                                          
          Alaska Industrial Development  and Export Authority                                                                   
          certifies  to  the legislature  is  not engaged  in                                                                   
          litigation regarding  any contractual obligation to                                                                   
          the  Alaska   Industrial  Development   and  Export                                                                   
          Authority  with  respect   to  a  power  generation                                                                   
          project owned by the  Alaska Industrial Development                                                                   
          and Export Authority"                                                                                                 
                                                                                                                                
  Vice-Chair Stoltze OBJECTED.                                                                                                  
                                                                                                                                
7:34:16 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault explained that the amendment grew out of                                                                      
frustration. The goal was to create less expensive power for                                                                    
Alaskans. He WITHDREW Amendment #18.                                                                                            
                                                                                                                                
7:37:35 PM                                                                                                                    
                                                                                                                                
Co-Chair Meyer MOVED to ADOPT Amendment #19:                                                                                    
                                                                                                                                
     Page 4, line 21                                                                                                            
     After "month."                                                                                                             
     Delete "Sales invoices must be attached"                                                                                   
     Insert "The department may require that invoices be                                                                        
     attached"                                                                                                                  
                                                                                                                                
Vice-Chair Stoltze OBJECTED.                                                                                                    
                                                                                                                                
Ms. Armstrong directed comments to the amendment.                                                                               
                                                                                                                                
7:39:03 PM                                                                                                                    
                                                                                                                                
Vice-Chair Stoltze clarified the intent. He WITHDREW his                                                                        
OBJECTION.  The amendment was adopted.                                                                                          
                                                                                                                                
7:39:42 PM                                                                                                                    
                                                                                                                                
Representative Gara MOVED TO ADOPT Amendment #20. Vice-Chair                                                                    
Stoltze OBJECTED.                                                                                                               
                                                                                                                                
Representative Gara commented on the amendment.  He WITHDREW                                                                    
the amendment.                                                                                                                  
                                                                                                                                
HB 4005 was HELD in Committee for further consideration.                                                                        
                                                                                                                                
7:42:15 PM                                                                                                                    
HOUSE BILL NO. 4001                                                                                                           
                                                                                                                                
     An  Act  making  supplemental   appropriations,  capital                                                                   
     appropriations,     reappropriations,      and     other                                                                   
     appropriations;  making appropriations  to capitalize  a                                                                   
     fund; and providing for an effective date.                                                                                 
                                                                                                                                
Co-Chair Chenault  spoke to the bill. He asked  if there were                                                                   
questions about the bill.                                                                                                       
                                                                                                                                
7:43:52 PM                                                                                                                    
                                                                                                                                
Co-Chair  Meyer reminded  department heads  that some  of the                                                                   
changes made will have a fiscal  impact, and all fiscal notes                                                                   
would be appreciated.                                                                                                           
                                                                                                                                
7:44:14 PM                                                                                                                    
                                                                                                                                
Representative  Hawker commented  that he  would like  to see                                                                   
per  capita information  in  the fiscal  notes.  Supplemental                                                                   
budgets should  not be used  for capital appropriations.  Why                                                                   
would  it ever  be appropriate  to supplement  budgets for  a                                                                   
capital appropriation?                                                                                                          
                                                                                                                                
KAREN  REHFELD, DIRECTOR,  OFFICE OF  MANAGEMENT AND  BUDGET,                                                                   
discussion about  the reimbursement and identify  significant                                                                   
investments to get the gas line construction organized.                                                                         
                                                                                                                                
7:46:51 PM                                                                                                                    
                                                                                                                                
Representative  Hawker inquired  about any constitutional  or                                                                   
statutory prohibition  or authority  preventing the use  of a                                                                   
supplemental    appropriations    bill    for    a    capital                                                                   
appropriation.     Ms.   Rehfeld   was  not   aware  of   any                                                                   
constitutional prohibition.                                                                                                     
                                                                                                                                
7:47:36 PM                                                                                                                    
                                                                                                                                
Representative   Gara  requested   discussion  on   the  AGIA                                                                   
appropriation.                                                                                                                  
                                                                                                                                
7:49:13 PM                                                                                                                    
                                                                                                                                
FRANK  RICHARDS, DEPUTY  COMMISSIONER  OF  HIGHWAYS &  PUBLIC                                                                   
FACILITIES,   DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC                                                                   
FACILITIES, clarified the question ready to go to bid.                                                                          
                                                                                                                                
Mr. Richards stated that there are three projects:                                                                              
                                                                                                                                
   ·    Reconstruction of the Dalton Highway from milepost                                                                      
        175 to milepost 209.                                                                                                    
   ·    Reconstruction of the Dalton Highway from milepost 9                                                                    
        to milepost 11.                                                                                                         
   ·    Culvert replacement on the Dalton Highway from                                                                          
        milepost 260 to milepost 321.                                                                                           
                                                                                                                                
These projects  are bid ready,  but because of  complications                                                                   
with the  STIP funds, they  were developed using  the Federal                                                                   
Highway Fund Design Efforts. The  construction funds have not                                                                   
yet been  available to  complete the  three projects.  If the                                                                   
appropriation  from the legislature  was made available,  the                                                                   
projects would  be advertised this fall and  winter, allowing                                                                   
construction to begin  in the spring of 2009.  The benefit of                                                                   
starting the projects  with an appropriation now  is that the                                                                   
money will be available to begin  construction, whereas if it                                                                   
is postponed  until the  next session  the construction  will                                                                   
not  begin until  late spring  2009  or possibly  as late  as                                                                   
August if there are protests in the bidding process.                                                                            
                                                                                                                                
                                                                                                                                
7:51:50 PM                                                                                                                    
                                                                                                                                
Co-Chair Chenault replied that  if federal funds were applied                                                                   
for  and  then  replaced  with  state  funds,  the  available                                                                   
federal funds could be used for  other projects in the state.                                                                   
Would it cost  less to use state funds because  federal funds                                                                   
usually come with  strings attached? There have  been bicycle                                                                   
paths  constructed  on the  Dalton  that wouldn't  have  been                                                                   
built without  those federal  requirements. He asked  whether                                                                   
state  funding  could  be  used  without  the  extra  expense                                                                   
associated with federal requirements.                                                                                           
                                                                                                                                
7:53:17 PM                                                                                                                    
                                                                                                                                
Mr.  Richards   responded  that  the  projects   are  already                                                                   
designed and  that it is  standard to remain  consistent with                                                                   
the  design.  The  goal  with   the  projects  is  to  affect                                                                   
alignment, and replace culverts  on over 60 miles of highway.                                                                   
Bike  paths are  not part  of the plan,  as this  is a  rural                                                                   
highway.                                                                                                                        
                                                                                                                                
Co-Chair Chenault  noted that the  Dalton Highway is  in poor                                                                   
shape.  He  asked  whether the  state  had  investigated  the                                                                   
possibility  of  mining  gravel  on federal  land  along  the                                                                   
Dalton Highway instead  of hauling it in from  other areas of                                                                   
the state.                                                                                                                      
                                                                                                                                
Mr. Richards  answered that the Department  of Transportation                                                                   
(DOT) is  looking for hard  aggregate for the  Dalton Highway                                                                   
in  many areas,  but  a  shortage of  gravel  is  one of  the                                                                   
challenges they  are facing. A  portion of the  appropriation                                                                   
is to  define those  material sites, open  them up,  and then                                                                   
have  them ready  for the  construction  activities, both  in                                                                   
current  and   future  projects   associated  with   the  gas                                                                   
pipeline.                                                                                                                       
                                                                                                                                
7:56:32 PM                                                                                                                    
                                                                                                                                
Representative  Hawker  noted  that  the bike  paths  on  the                                                                   
Dalton Highway were placed on  the old roadbed at very little                                                                   
incremental cost when the road was upgraded.                                                                                    
                                                                                                                                
Co-Chair  Chenault said  he had  driven more  miles on  those                                                                   
bike paths than anyone else in the room.                                                                                        
                                                                                                                                
7:58:22 PM                                                                                                                    
                                                                                                                                
Representative   Gara   wanted   to  avoid   building   roads                                                                   
specifically  for hauling  the  pipeline  materials that  may                                                                   
need  to  be rebuilt  in  order  to haul  materials  for  the                                                                   
pipeline.  Because of  the  speed at  which  roads in  Alaska                                                                   
deteriorate, it might not make  sense to construct roads over                                                                   
the next couple of years for that purpose.                                                                                      
                                                                                                                                
Mr. Richards  explained that  most of  these roads  are being                                                                   
designed  to   come  on  line   at  the  time   the  pipeline                                                                   
construction should  begin. The  projects such as  the Dalton                                                                   
Highway upgrade  need to happen  soon because of  the current                                                                   
deterioration of  that highway. Grade and  alignment features                                                                   
that are appropriate  for hauling pipeline materials  will be                                                                   
incorporated  now.  It would  be  a  great challenge  to  the                                                                   
contracting  community  to  do  hundreds of  miles  of  major                                                                   
upgrades  right before  the  line  goes in.  The  goal is  to                                                                   
expand  these projects  out through the  six years  available                                                                   
until the construction of the gas pipeline.                                                                                     
                                                                                                                                
8:02:19 PM                                                                                                                    
                                                                                                                                
Representative  Gara asked what  specific projects  are being                                                                   
funded in this bill.                                                                                                            
                                                                                                                                
Mr. Richards  repeated the specific Dalton  highway sections.                                                                   
The  construction would  begin  next year  if  the money  was                                                                   
appropriated.                                                                                                                   
                                                                                                                                
Representative  Gara reiterated  that he  didn't think  those                                                                   
sections would  still be  in good  shape during the  pipeline                                                                   
construction.                                                                                                                   
                                                                                                                                
Mr. Richards  responded that the  challenge of  modern design                                                                   
in the  Arctic is  the creation of  roads that can  withstand                                                                   
heavy traffic and permafrost issues.                                                                                            
                                                                                                                                
8:04:46 PM                                                                                                                    
                                                                                                                                
Representative  Thomas  asked  what  had  been  done  on  the                                                                   
Canadian  section   of  the  Alaska  Highway.   Would  it  be                                                                   
necessary to rebuild and realign that section of the road?                                                                      
                                                                                                                                
Mr. Richards confirmed  that he has been in  discussions with                                                                   
the Canadians regarding this issue.  To upgrade the road, the                                                                   
administration  is  in  contact   with  those  in  the  Yukon                                                                   
Territory. He will visit Canada  next week and will have more                                                                   
information following the visit.                                                                                                
                                                                                                                                
Representative Thomas asked about  the nature of the upgrades                                                                   
that  are  required.  How  many layers  of  asphalt  will  be                                                                   
necessary?                                                                                                                      
                                                                                                                                
Mr.  Richards  answered  that  there will  be  injections  of                                                                   
asphalt into the  existing roadbed and the strength  would be                                                                   
greatly increased.                                                                                                              
                                                                                                                                
8:07:29 PM                                                                                                                    
                                                                                                                                
Co-Chair  Chenault  noted  that  there  are  Canadian  mining                                                                   
companies  that  want  to  use   the  highway  to  Haines  to                                                                   
transport  their materials.  He wondered  whether the  mining                                                                   
companies would be willing to contribute to the upgrades.                                                                       
                                                                                                                                
Mr. Richards said  that the companies are looking  to upgrade                                                                   
the  road or  build  a railroad  to  Haines  where there  are                                                                   
better docking facilities.                                                                                                      
                                                                                                                                
Representative   Kelly   requested  clarification   on   this                                                                   
appropriation bill and what the immanent priorities were.                                                                       
                                                                                                                                
Co-Chair Chenault  answered that the appropriation  bill is a                                                                   
wish list.  He wanted to find  out what needs are  out there.                                                                   
The remaining  issues can  be revisited  in the next  regular                                                                   
session.                                                                                                                        
                                                                                                                                
8:10:33 PM                                                                                                                    
                                                                                                                                
Representative Gara asked Commissioner  Galvin what amount of                                                                   
money   was  appropriate   for   this   special  session   to                                                                   
communicate the intent of the  legislature for support of the                                                                   
TransCanada project.                                                                                                            
                                                                                                                                
PAT GALVIN,  COMMISSIONER, DEPARTMENT  OF REVENUE,  responded                                                                   
that  it would  be most  appropriate for  the legislature  to                                                                   
allocate  the   entire  $500   million  to  fully   fund  the                                                                   
transportation  fund.  It is  imperative  to allocate  enough                                                                   
money  to get  the  project through  the  primary season  and                                                                   
avoid  any bottlenecks  that  would  slow the  project  down.                                                                   
There  would  be a  risk  of  delaying  the project  with  an                                                                   
insufficient amount of money.                                                                                                   
                                                                                                                                
8:14:22 PM                                                                                                                    
                                                                                                                                
Representative Gara  asked what the  500 million and  the 164                                                                   
million dollar amounts represented.                                                                                             
                                                                                                                                
Commissioner Galvin  explained that the $164  million was the                                                                   
suggested amount  for reappropriation  from the $300  million                                                                   
set aside in the  AHFC fund along with the interest  that has                                                                   
been generated  by those  funds, which  is approximately  $36                                                                   
million. The remainder will come out of the general fund.                                                                       
                                                                                                                                
Representative Gara  noted that he has heard  discussion that                                                                   
appropriating  small amounts  would  give  the legislature  a                                                                   
chance  to monitor  how DOT is  handling the  money. But  the                                                                   
legislature  doesn't really  have the  opportunity to  review                                                                   
receipts,  so that  approach  may not  make  sense. He  asked                                                                   
whether there  is any reason to  disburse the funds  in small                                                                   
amounts.                                                                                                                        
                                                                                                                                
Commissioner  Galvin   responded  that  the   opportunity  is                                                                   
already built into the Alaska  Gasoline Inducement Act (AGIA)                                                                   
statute. Any  money appropriated into the  reimbursement fund                                                                   
can be taken  out again by  the legislature. He does  not see                                                                   
any  additional  reporting issues  that  would  be raised  by                                                                   
fully funding the reimbursement.                                                                                                
                                                                                                                                
Co-Chair  Chenault noted  that  no one  in  the building  was                                                                   
talking  about   slowing  the   project  down  with   smaller                                                                   
appropriations.                                                                                                                 
                                                                                                                                
TONY  PALMER, VICE  PRESIDENT,  ALASKA BUSINESS  DEVELOPMENT,                                                                   
TRANSCANADA, introduced himself.                                                                                                
                                                                                                                                
Representative  Gara asked about  reimbursement of  qualified                                                                   
costs  up to  50 percent  of their  expenditures through  the                                                                   
Open Season.                                                                                                                    
                                                                                                                                
Mr. Palmer  confirmed that once  the license was  issued, the                                                                   
state would be obligated, subject  to TransCanada meeting, to                                                                   
all of  the conditions and  50 percent of expenditures.  They                                                                   
had that expectation.                                                                                                           
                                                                                                                                
Representative Gara  asked what the company  would require to                                                                   
get  through  the  Open  Season,   noting  the  legislature's                                                                   
funding cycle.                                                                                                                  
                                                                                                                                
Mr.  Palmer  answered  $54  million   worth  of  expenditures                                                                   
through June 2009 and $84 million total through July 2010.                                                                      
                                                                                                                                
Representative Gara asked how much was necessary.                                                                               
Mr. Palmer responded half of the 84 million dollars.                                                                            
                                                                                                                                
Representative  Gara  asked  how  much was  required  if  the                                                                   
legislature was to fully fund the commitment.                                                                                   
                                                                                                                                
Mr. Palmer said that it would  be one half of the $84 million                                                                   
or $42 million.  Representative Gara asked  for TransCanada's                                                                   
request  of  the  legislature   at  this  point.  Mr.  Palmer                                                                   
responded that  he preferred that the legislature  fully fund                                                                   
the request.                                                                                                                    
                                                                                                                                
8:22:50 PM                                                                                                                    
                                                                                                                                
Commissioner Galvin  answered that  there was little  risk to                                                                   
the legislature  in appropriating the entire  amount into the                                                                   
fund, because  DOT would be  providing detailed  reports. The                                                                   
money  would  not  be  taken   out  of  the  control  of  the                                                                   
legislature if placed in the reimbursement fund.                                                                                
                                                                                                                                
8:24:06 PM                                                                                                                    
                                                                                                                                
Representative Crawford  asked what the earnings  would be on                                                                   
the money sitting in the reimbursement fund.                                                                                    
                                                                                                                                
Commissioner Galvin answered that  the money would be handled                                                                   
like  the money  in the  general Fund,  though accounted  for                                                                   
separately. It would be the Commissioner's  discretion to try                                                                   
to maximize  the return by  investing more aggressively  than                                                                   
the General Fund.                                                                                                               
                                                                                                                                
Co-Chair Chenault asked whether  the General Fund invests for                                                                   
short term return while the AGIA  reimbursement fund would be                                                                   
a long-term investment.                                                                                                         
                                                                                                                                
Commissioner  Galvin responded  that  with the  money in  the                                                                   
General  Fund, it  is  available to  the  legislature at  any                                                                   
point.  If it  were  to  move into  the  AGIA fund  with  the                                                                   
purpose of reimbursing  TransCanada, then the  money could be                                                                   
invested  for  a slightly  longer  term, recognizing  that  a                                                                   
schedule   must   be   followed.   Understanding   that   the                                                                   
legislature could reappropriate  funds would probably prevent                                                                   
this type of investment.                                                                                                        
                                                                                                                                
8:28:14 PM                                                                                                                    
                                                                                                                                
Representative  Thomas asked  what  would happen  if the  500                                                                   
million  dollars   were  appropriated  and   the  investments                                                                   
incurred losses.                                                                                                                
                                                                                                                                
Galvin  responded  that the  funds  would  not be  placed  in                                                                   
investment vehicles  that were subject  to losses due  to the                                                                   
nature of the requirements.                                                                                                     
                                                                                                                                
8:29:47 PM                                                                                                                    
                                                                                                                                
TOM  IRWIN, COMMISSIONER,  DEPARTMENT  OF NATURAL  RESOURCES,                                                                   
introduced  staff,  Marty  Rutherford,  Deputy  Commissioner,                                                                   
Department of  Natural Resources  and offered a  highlight of                                                                   
what they are doing. He reviewed  what the accomplishments of                                                                   
the  legislature  over the  past  year  by funding  the  AGIA                                                                   
program. They have learned a tremendous  amount. The issuance                                                                   
of  a  license  is  a  major  step  forward.  There  will  be                                                                   
questions that inevitably come  up in the four categories. He                                                                   
wants the state  to be prepared when the questions  do arise.                                                                   
He is looking at 6.2 million over  the next five years.  They                                                                   
plan to use a  contractor to help with the  process, and they                                                                   
will  be working  with a  multitude of  companies. The  funds                                                                   
will be  used to determine  the correct  paths to  follow. He                                                                   
described  other needs for  the money.  They will be  looking                                                                   
for more efficient methods as they go.                                                                                          
                                                                                                                                
8:35:12 PM                                                                                                                    
                                                                                                                                
CLARK   BISHOP,  COMMISSIONER,   DEPARTMENT   OF  LABOR   AND                                                                   
WORKFORCE   DEVELOPMENT,  stated   that  the  department   of                                                                   
education   and  the   department  of   labor  have   a  good                                                                   
relationship that has been fostered for two years.                                                                              
                                                                                                                                
8:37:47 PM                                                                                                                    
                                                                                                                                
LARRY LEDOUX COMMISSIONER, DEPARTMENT  OF EDUCATION AND EARLY                                                                   
DEVELOPMENT,  appreciated  the   opportunity  to  help  young                                                                   
people engage  in the  construction of  a pipeline.  He would                                                                   
like to  see an Alaska workforce  ready when the  pipeline is                                                                   
ready for construction.                                                                                                         
                                                                                                                                
8:38:36 PM                                                                                                                    
                                                                                                                                
Commissioner   Bishop  stated   that  each  funding   request                                                                   
coincides with the strategy outlined  in their training plan.                                                                   
Business, Industry,  and Education  have all worked  together                                                                   
to  develop  the  training plan.  Each  funding  request  was                                                                   
identified in  the strategies  by timeline. Each  request has                                                                   
been vetted by the best in the state.                                                                                           
                                                                                                                                
Representative Gara  wanted as much job training  as possible                                                                   
for  Alaskans  to limit  the  amount  of imported  labor.  He                                                                   
thought this  was the best way  to limit dislocation.  If the                                                                   
training happens  too early,  the students  may not  work for                                                                   
the pipeline,  but instead take  their training to  other job                                                                   
opportunities.  If there is  inadequate training,  then labor                                                                   
will need to be imported.                                                                                                       
                                                                                                                                
Commissioner Bishop made clear  that one guiding principle of                                                                   
the presented document was the  industry recommendations that                                                                   
the  focus is  on  current workforce  shortages.  He did  not                                                                   
think that  overtraining would  be a problem.  Representative                                                                   
Gara asked if there  was a way to ensure that  people trained                                                                   
would  be available  to work  on  the pipeline.  Commissioner                                                                   
Bishop discussed  the variable  occupations mentioned  in the                                                                   
training document,  stating that  many are transferable  from                                                                   
one industry to the next.                                                                                                       
                                                                                                                                
8:44:06 PM                                                                                                                    
                                                                                                                                
Vice-Chair  Stoltze asked  for  comments  from Department  of                                                                   
Education and Early Development  regarding the advertising of                                                                   
technical training versus other  methods of higher education.                                                                   
Commissioner  Ledoux  observed   that  there  will  be  plans                                                                   
introduced soon.  Technical education  helps build  vision in                                                                   
young  people.   The  real  challenge  will   be  to  provide                                                                   
experiences  to young  people  throughout Alaska.  Vocational                                                                   
programs   throughout    the   state   have    been   reduced                                                                   
substantially.  The competitive  nature of  this program  can                                                                   
create innovative partnerships.                                                                                                 
                                                                                                                                
HB 4001 was HELD in Committee for further consideration.                                                                        
                                                                                                                                
8:49:38 PM                                                                                                                    
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 8:50 P.M.                                                                                          
                                                                                                                                
                                                                                                                                

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