Legislature(2007 - 2008)

08/04/2008 07:48 PM FIN

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                  HOUSE FINANCE COMMITTEE                                                                                       
                       August 4, 2008                                                                                           
                         7:48 P.M.                                                                                              
CALL TO ORDER                                                                                                                 
Co-Chair Meyer called the House  Finance Committee meeting to                                                                   
order at 7:48:18 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                                                                                                                  
Speaker    John    Harris;    Representative    Bob    Roses;                                                                   
Representative  Carl Gatto;  Representative Anna  Fairclough;                                                                   
Representative Paul Seaton; Representative Andrea Doll;                                                                         
Suzanne Armstrong,  Staff, Representative Kevin  Meyer; Jerry                                                                   
Burnett,  Director,  Division   of  Administrative  Services,                                                                   
Department of  Revenue; Pat Galvin, Commissioner,  Department                                                                   
of Revenue; Tom Wright, Staff,  Representative Mike Chenault;                                                                   
Frank  Richards, Deputy  Commissioner  of  Highways &  Public                                                                   
Facilities,   Department   of   Transportation   and   Public                                                                   
Facilities;   Sarah    Fisher-Goad,   Deputy    Director   of                                                                   
Operations,   Alaska   Industrial  Development   and   Export                                                                   
Authority   and  Alaska  Energy   Authority,  Department   of                                                                   
Commerce,  Community  and  Economic  Development;  Guy  Bell,                                                                   
Assistant    Commissioner   and    Director,   Division    of                                                                   
Administrative  Services, Department  of Labor and  Workforce                                                                   
Development; Clark Bishop, Commissioner,  Department of Labor                                                                   
and Workforce Development                                                                                                       
HB 4001   An Act making supplemental  appropriations, capital                                                                   
          appropriations,    reappropriations,   and    other                                                                   
          appropriations;     making    appropriations     to                                                                   
          capitalize  a fund; and providing for  an effective                                                                   
          HB 4001 was reported out of Committee with a "do                                                                      
          pass" recommendation.                                                                                                 
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 & HELD in Committee for further                                                                     
CSSB 4002(FIN)                                                                                                                  
          An  Act amending  the bulk  fuel bridge loan  fund;                                                                   
          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;                                                                   
          establishing  the  Alaska resource  rebate  program                                                                   
          and relating to that  program; and providing for an                                                                   
          effective date.                                                                                                       
          CSSB 4002 (FIN) was SCHEDULED but not heard.                                                                          
7:51:37 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.                                                                         
Vice-Chair  Stoltze MOVED  to ADOPT  work draft  25-LS1757\L,                                                                   
Kane,  8/4/08,  as  the  version   of  the  bill  before  the                                                                   
Committee. Representative Nelson OBJECTED.                                                                                      
7:53:11 PM                                                                                                                    
Representative  Nelson   expressed  more  comfort   with  the                                                                   
previous  version of  the bill.  She felt  that the  previous                                                                   
version  struck  a better  balance  in  terms of  region  and                                                                   
helping people than the current  version does. She took pride                                                                   
in the work that had been done.                                                                                                 
Representative Gara  noted that the changes in  the bill were                                                                   
all  topics  that  the committee  had  favored.  The  heating                                                                   
provision   and  the  electrical   utility  assistance   were                                                                   
7:54:40 PM                                                                                                                    
SUZANNE   ARMSTRONG,  STAFF,   REPRESENTATIVE  KEVIN   MEYER,                                                                   
explained  the major  changes to  the work  draft. The  Power                                                                   
Cost Equalization (PCE) provisions  were removed, as were the                                                                   
provisions pertaining  to the  Low Income Heating  Assistance                                                                   
Program  (LIHEAP) and  the provision  relating  to the  State                                                                   
Heating Assistance  Program. Remaining were the  changes made                                                                   
to the bulk fuel  loan fund and the revolving  loan fund with                                                                   
limits  increasing   the  loan   amounts  from   $500,000  to                                                                   
$750,000. The  resource rebate  section was left  intact with                                                                   
only one change;  the dollar amount was increased  from $1000                                                                   
to $1200  per person.  The suspension of  motor fuel  tax was                                                                   
left intact.                                                                                                                    
Co-Chair Meyer reverted back to  the Governor's original call                                                                   
of the $1200 for the resource  rebate and the eight cent fuel                                                                   
tax suspension.                                                                                                                 
7:56:04 PM                                                                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Hawker, Kelly, Stoltze, Thomas, Meyer, Chenault                                                                       
OPPOSED: Foster, Gara, Nelson, Crawford                                                                                         
THE MOTION PASSED 6-4                                                                                                           
7:57:13 PM                                                                                                                    
Co-Chair Meyer MOVED  to ADOPT Amendment #1, Page  3, Line 7,                                                                   
deleting "$1,000" and inserting  "$1,200". Vice-Chair Stoltze                                                                   
Co-Chair Meyer explained  the drafting error on  Page 3, Line                                                                   
7 where the $1000 should read "$1200."                                                                                          
Representative Hawker WITHDREW the OBJECTION.                                                                                   
7:57:41 PM                                                                                                                    
Representative  Kelly  MOVED  to  ADOPT  Amendment  #2,  #25-                                                                   
LS1757\M.4,  Bullard\Kane,   8/4/08.  Representative   Thomas                                                                   
7:57:55 PM                                                                                                                    
Representative  Kelly explained that  the amendment  would be                                                                   
withdrawn. He asked to speak to  the amendment. The amendment                                                                   
would allow a rebate or a low  interest loan if an individual                                                                   
wanted to  use a different heating  method than oil,  such as                                                                   
wood, wood chips, or pellets.  These alternative fuel sources                                                                   
allow people to  help themselves and reduce  their dependence                                                                   
on oil.                                                                                                                         
Amendment #2 was WITHDRAWN.                                                                                                     
7:59:52 PM                                                                                                                    
Representative  Crawford stated that  the amendment  was good                                                                   
and should not be withdrawn and  he encouraged Representative                                                                   
Kelly to offer it.                                                                                                              
8:01:02 PM                                                                                                                    
Representative  Hawker MOVED  to  ADOPT conceptual  Amendment                                                                   
#3, Line  29, Page 3.  He explained that  it was  a provision                                                                   
repealing the  suspension of the  motor fuel tax on  June 30,                                                                   
2011 as written.  It repeals section 5A only.  The conceptual                                                                   
amendment  was to  change 5A to  section 5  in its  entirety.                                                                   
Representative  Crawford  OBJECTED for  discussion  purposes.                                                                   
Co-Chair Meyer explained the drafting  error that was noticed                                                                   
by Representative Hawker.                                                                                                       
8:03:06 PM                                                                                                                    
Representative Crawford  WITHDREW the OBJECTION.  There being                                                                   
NO further OBJECTION, it was adopted.   Representative Hawker                                                                   
pointed out  that the credit should  go to the  Department of                                                                   
Law for the error's discovery.                                                                                                  
Representative   Kelly   mentioned   the   included   penalty                                                                   
provision.  He did not  agree with  the notion. He  regretted                                                                   
the hassle  of unhappy  phone  calls in the  event of  public                                                                   
8:05:19 PM                                                                                                                    
Co-Chair Meyer reviewed the fiscal  notes. He pointed out the                                                                   
resource rebate  of $1,200 dollars for Alaska  residents. The                                                                   
rebate could  be used  for heating  and fuel assistance  this                                                                   
winter. He recalled that the PFD  comes out in early October,                                                                   
which is important  to Alaskans preparing for  winter heating                                                                   
costs. He wondered if there was  potential that the PFD might                                                                   
be administered earlier than October.                                                                                           
JERRY   BURNETT,   DIRECTOR,   DIVISION   OF   ADMINISTRATIVE                                                                   
SERVICES, DEPARTMENT OF REVENUE,  explained that the bill was                                                                   
initially introduced in August.  The Governor had reviewed it                                                                   
and  hoped  to move  it  back,  but  there  are a  number  of                                                                   
concerns  to be  addressed.  There  are scheduling  items  to                                                                   
guarantee  that the appropriate  warrant  stock is in  place.                                                                   
The Department of Revenue will  attempt to get the checks out                                                                   
as soon as possible.                                                                                                            
8:08:56 PM                                                                                                                    
Representative  Hawker requested  the  difference between  an                                                                   
energy rebate  and a resource  rebate. Mr. Burnett  explained                                                                   
that  the rebate  consists of  a distribution  of excess  tax                                                                   
revenue that  the state had  received and will  distribute to                                                                   
dividend  eligible persons.  It is  not aimed  at a  specific                                                                   
Representative  Hawker   pointed  out  that  there   was  not                                                                   
language in the  bill requiring that the resource  rebate was                                                                   
spent on  energy related  issues. Mr.  Burnett affirmed  that                                                                   
there  was not  language specifying  a requirement  regarding                                                                   
how the  rebate is spent. He  supposed that people  would use                                                                   
the rebate  money  to pay heating  bills, given  the cost  of                                                                   
energy this year.                                                                                                               
8:10:55 PM                                                                                                                    
Representative   Gara   did  not   accept   the   terminology                                                                   
concerning  the equitability  of  the proposed  distribution.                                                                   
The prior  version of the  bill recognized the  inequity, and                                                                   
attempted to  address it by  helping those with  the greatest                                                                   
need. He did not  accept the line of reasoning  that there is                                                                   
equity based on a change of the  terminology. The bill is not                                                                   
Representative Gara asked if all  of the individuals eligible                                                                   
for the  hold harmless provision  would have the  money count                                                                   
as  income  and  possibly  have  it  garnished.  Mr.  Burnett                                                                   
replied  that  the  rebate  would not  be  garnished  in  the                                                                   
mentioned situation.                                                                                                            
Representative  Gara   could  not  find  the   hold  harmless                                                                   
provision  in  the bill  before  the Committee.  Mr.  Burnett                                                                   
advised that the  hold harmless clause is in  the PFD statute                                                                   
and it  applies to  subsidized housing because  it is  a one-                                                                   
time payment.  It would not  be treated  as part of  the PFD.                                                                   
The clause is identified  as a separate part of  the PFD. The                                                                   
hold harmless  that  applies to  PFD will apply  to the  hold                                                                   
harmless  provision.  There  is   a  specific  hold  harmless                                                                   
section in the bill for veterans.                                                                                               
8:15:29 PM                                                                                                                    
Representative  Gara asked if  hold harmless language  was in                                                                   
the appropriations bill. Mr. Burnett  responded that there is                                                                   
an appropriation  for an additional hold harmless  for Health                                                                   
and Social  Services and  the Veterans  in the  appropriation                                                                   
Representative   Hawker  asked   to  clarify   that  in   the                                                                   
appropriations  bill   there  is  specifically   a  paragraph                                                                   
earmarking funding to address those purposes.                                                                                   
Representative  Gara asked for  a letter from  the department                                                                   
addressing  the  hold  harmless   provision  for  low  income                                                                   
housing and the Pioneer's Home issue. Mr. Burnett affirmed.                                                                     
8:16:36 PM                                                                                                                    
Co-Chair Meyer  noted that the  bill would be HELD  until the                                                                   
Senate version arrives to Committee.                                                                                            
8:18:15 PM                                                                                                                    
Representative  Thomas  stated  that he  originally  believed                                                                   
that sufficient  legislation would include a  resource rebate                                                                   
of  $1,500 and  include the  repealing  of the  fuel tax.  He                                                                   
remembered  speaking  about  an   energy  rebate  since  last                                                                   
session. He hoped  the resource rebate would  be increased to                                                                   
$1,400  dollars, because  of the  other aspects  of the  bill                                                                   
that were  left out. He proposed  that it occur on  the House                                                                   
Representative  Nelson   pointed  out  that  there   are  six                                                                   
different  regions in the  State of  Alaska. Each region  was                                                                   
initially   represented  with   one  piece  of   legislation;                                                                   
however,  an individual  living  alone  does  not have  their                                                                   
needs adequately  addressed. She  listed the items  that were                                                                   
in the original  version that helped ease the  disparity. She                                                                   
suggested that the  Committee had taken a step  backward. She                                                                   
expressed  hope  that  a  "middle   ground"  could  still  be                                                                   
8:21:26 PM                                                                                                                    
Representative  Crawford wondered how  many people  would use                                                                   
the funding as a moving allowance  to move from the Bush into                                                                   
the cities.  He thought it  was too little  too late  to help                                                                   
the rural areas.                                                                                                                
Co-Chair Meyer noted that HB 4005 would be HELD.                                                                                
8:22:37 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.                                                                                 
Vice-Chair Stoltze  MOVED to  ADOPT work draft  #25-GH3056\L,                                                                   
Kurtz & Kane, 8/4/08,  as the version of the  bill before the                                                                   
Committee.  Representative Gara OBJECTED.                                                                                       
8:23:07 PM                                                                                                                    
Representative Gara asked what  the Administration needed for                                                                   
the  appropriation  for  the   gas  line  contract  that  was                                                                   
approved. The original amount  was $500 million. The CS shows                                                                   
a sum  of $50 million appropriated  from the general  fund to                                                                   
the  Alaska  Gasoline  Inducement  Act  (AGIA)  reimbursement                                                                   
8:23:43 PM                                                                                                                    
PAT GALVIN,  COMMISSIONER, DEPARTMENT  OF REVENUE,  estimated                                                                   
that TransCanada  would expect  to spend $14 million  dollars                                                                   
to get to  an open season.  This would include a  50/50 match                                                                   
from the state, expected to be $14 million.                                                                                     
Representative  Gara requested  the  timeframe  that the  $14                                                                   
million  would encompass.  Commissioner  Galvin replied  that                                                                   
the timeframe would span until  the middle of 2010. He stated                                                                   
that the department believed that  it was most appropriate to                                                                   
put the entire  $500 million into the  reimbursement account.                                                                   
He recognized the  interest of the legislature  to retain the                                                                   
ability  to  have  the  department  come  back  and  ask  for                                                                   
additional amounts as needed.  The $14 million dollars allows                                                                   
for open season, which is one benchmark.                                                                                        
8:25:55 PM                                                                                                                    
Representative  Gara did not want  to jeopardize  the state's                                                                   
contract.  Commissioner  Galvin  replied  that it  would  not                                                                   
jeopardize  the  contract,  but  when  additional  funds  are                                                                   
needed, it could cause a delay.                                                                                                 
Representative Gara WITHDREW the OBJECTION.                                                                                     
8:27:09 PM                                                                                                                    
TOM WRIGHT,  STAFF, REPRESENTATIVE MIKE CHENAULT,  provided a                                                                   
sectional analysis:                                                                                                             
        ·    Section    1   included    the    $50    million                                                                   
             appropriation   for  AGIA,   the   $25   million                                                                   
             appropriation  for   the   Alaska  Natural   Gas                                                                   
             Development  Authority  (ANGDA)for  the  instate                                                                   
             gas pipeline segment,  and the sum  necessary to                                                                   
             pay each  qualified  resident  a $1200  resource                                                                   
             rebate including administrative costs.                                                                             
        ·    Section 2 included $600,000  appropriated to the                                                                   
             Power  Cost  Equalization  (PCE)  fund  and  the                                                                   
             Rural Electric  Capitalization Fund  as well  as                                                                   
             $9 million  to cover the  proposed shortage  for                                                                   
        ·    Section 3 included the hold  harmless clause and                                                                   
             is    appropriated     $1,900,000,     as     an                                                                   
        ·    Section 4 included the $60  million appropriated                                                                   
             for  the  Alaska  Energy  Efficient  Home  Grant                                                                   
        ·    Section 5  included  $5.5 million  for the  Bulk                                                                   
             Fuel Revolving  Loan Fund  and $5.3 million  for                                                                   
             the Bulk  Fuel Bridge  Loan  Fund, and  $110,000                                                                   
             was appropriated for administrative costs.                                                                         
        ·    Section  6   included  $29.6   million  to   the                                                                   
             Department   of   Transportation    and   Public                                                                   
             Facilities  (DOT)  for  reconstruction   of  the                                                                   
             Dalton Highway  from  milepost  175 to  milepost                                                                   
             209 and $23.3 million  to DOT for repair  of the                                                                   
             Dalton Highway  from  milepost  260 to  milepost                                                                   
             321. Also included  is $18 million  appropriated                                                                   
             to the  DOT for  surveys and  design starts  for                                                                   
             gas line infrastructure.                                                                                           
        ·    Section 7 included  the shared taxes,  estimated                                                                   
             to be  $100,000 to  pay  the municipalities  the                                                                   
             amount of  aviation fuel  tax proceeds to  which                                                                   
             they would have been entitled  under AS43.40.010                                                                   
        ·    Section  8  included   $5.5  million   from  the                                                                   
             general  fund  to  the  Department   of  Natural                                                                   
             Resources for gas pipeline implementation.                                                                         
        ·    Section  9   included  appropriations   for  the                                                                   
             capitalization of  funds  that do  not lapse  in                                                                   
             sections  1   (a),  4,   5(a),  and  5(b).   The                                                                   
             appropriations made in  sections 1(b), 6,  and 8                                                                   
             of this Act are  for capital projects  and lapse                                                                   
             under AS 37.25.020.                                                                                                
        ·    Section 10  was retroactive  for Sections  2 (a)                                                                   
             to June 30, 2008.                                                                                                  
        ·    Section  11 included  the  contingency  language                                                                   
             for  section  7 regarding  the  passage  by  the                                                                   
             Twenty-Fifth   Alaska  State   Legislature   and                                                                   
             enactment into law  of a bill that  suspends the                                                                   
             motor fuel tax imposed under AS 43.40.010.                                                                         
        ·    Section  12  includes  the  immediate  effective                                                                   
             date under AS01.10.070(c).                                                                                         
8:31:13 PM                                                                                                                    
Representative  Hawker  referenced  Section  1  and  the  $25                                                                   
million dollar  appropriation to  the Department  of Revenue,                                                                   
Alaska  Natural Gas  Development Authority,  for the  instate                                                                   
gas pipeline  segment.  He asked for  clarification  that the                                                                   
money  would  go  to  the  Department  of  Revenue  who  will                                                                   
exercise oversight of expenditure  of those funds. He had not                                                                   
seen  any documentation  regarding  the intended  use of  the                                                                   
Commissioner   Galvin  restated   the  question  for   better                                                                   
understanding.  Representative Hawker  explained that  he had                                                                   
no question that  the appropriation would be  utilized by the                                                                   
Alaska Natural Gas Pipeline Authority  (ANGDA). Burnett added                                                                   
that the ANGDA  appropriations would not be  transferred from                                                                   
the  state  accounting  system  to ANGDA  as  an  independent                                                                   
entity and the  procurement process is overseen  by staff and                                                                   
the Commissioner of the Department of Revenue.                                                                                  
8:34:15 PM                                                                                                                    
Representative  Hawker requested  more information  regarding                                                                   
Page 2,  Line 6,  and the  relationship of  the funds  to the                                                                   
funds  that  are  coming  before  the  public  in  a  general                                                                   
obligation bond this fall.                                                                                                      
8:34:42 PM                                                                                                                    
FRANK  RICHARDS, DEPUTY  COMMISSIONER  OF  HIGHWAYS &  PUBLIC                                                                   
FACILITIES,   DEPARTMENT   OF   TRANSPORTATION   AND   PUBLIC                                                                   
FACILITIES,  explained the difference  between the  projects.                                                                   
The  general  obligation bond  addresses  heavy  maintenance,                                                                   
addressing specific challenges of the Dalton Highway.                                                                           
Representative  Hawker  explained  that  in the  interest  of                                                                   
accountability, efficiency  and avoiding waste,  he wanted to                                                                   
know  that  the  two  projects  were  not  in  conflict.  Mr.                                                                   
Richards replied that was the intention.                                                                                        
8:36:26 PM                                                                                                                    
Representative Gara  MOVED to ADOPT conceptual  Amendment #1,                                                                   
#25-GH4059\C.4, Kane, 8/1/08.  Vice-Chair Stoltze OBJECTED.                                                                     
8:37:08 PM                                                                                                                    
Representative  Gara  advised  that  the  Legislature  should                                                                   
attempt  to  reduce  energy  costs by  helping  to  fund  the                                                                   
renewable energy  fund. With the  $150 million, AEA  would be                                                                   
able to consider  more projects and would be  reviewed by the                                                                   
Legislature.  The  state  needs to  move  toward  alternative                                                                   
energy quickly  to stabilize  and reduce  the cost  of energy                                                                   
for the future.                                                                                                                 
8:38:52 PM                                                                                                                    
Co-Chair Meyer  noted support  for renewable energy  funding,                                                                   
however, $50  million has already  been appropriated  to that                                                                   
fund for  the next  five years.  None of  the money  had been                                                                   
used. The  projects will be  prioritized first.  The proposed                                                                   
amendment would go  into effect in 2009. He  recommended that                                                                   
it be addressed during regular session.                                                                                         
Representative Crawford commented  'if not now, when?' Do not                                                                   
delay renewable  energy projects when moving  ahead on fossil                                                                   
fuel projects.   He thought  that the  time was now.  It does                                                                   
not make sense  to postpone good projects that  would improve                                                                   
the fossil fuel dilemma.                                                                                                        
Representative Thomas  commented on the amount  of money that                                                                   
had been  spent. He  thought that  the Committee should  wait                                                                   
and  listen  to the  task  force  and advisory  board  before                                                                   
placing new funds into the account.  He opposed Amendment #1.                                                                   
8:42:51 PM                                                                                                                    
Representative  Gara made  closing comments.  There are  some                                                                   
very  significant  projects  including  wind  power  and  the                                                                   
distribution of wind generated energy.                                                                                          
Representative  Nelson noted  support for  the amendment  but                                                                   
pointed out that she would vote  no. She thought it would not                                                                   
be good to assume that the next  Alaska Legislature would not                                                                   
be supportive. This special session  was to address immediate                                                                   
crisis not long term relief.                                                                                                    
8:46:55 PM                                                                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Gara, Crawford,                                                                                                       
OPPOSED:  Hawker,  Kelly,  Nelson, Stoltze,  Thomas,  Foster,                                                                   
Chenault, Meyer                                                                                                                 
Representative Joule was not present for the vote.                                                                              
The MOTION FAILED (8-2).                                                                                                        
8:47:57 PM                                                                                                                    
Representative Crawford  MOVED to ADOPT Amendment  #2.  Vice-                                                                   
Chair Stoltze OBJECTED.                                                                                                         
8:48:09 PM                                                                                                                    
Representative  Crawford   voiced  disappointment   with  the                                                                   
process.  He urged  passage  of  the amendment.  Two  million                                                                   
dollars would keep  the project moving forward.  The state is                                                                   
spending $1 billion  dollars for some people who  do not need                                                                   
8:51:52 PM                                                                                                                    
Co-Chair Meyer  was offended by  the statement of  not moving                                                                   
into the future. There are many  renewable energy projects in                                                                   
the  capital budget.  The  state is  moving  forward and  the                                                                   
projects need to be addressed during regular session.                                                                           
Vice-Chair  Stoltze   requested  an  explanation   about  the                                                                   
Tanadgusix Corporation (TDX).                                                                                                   
SARAH  FISHER-GOAD,  DEPUTY DIRECTOR  OF  OPERATIONS,  ALASKA                                                                   
INDUSTRIAL  DEVELOPMENT  AND   EXPORT  AUTHORITY  AND  ALASKA                                                                   
ENERGY  AUTHORITY,  DEPARTMENT  OF  COMMERCE,  COMMUNITY  AND                                                                   
ECONOMIC  DEVELOPMENT,  pointed  out  that TDX  power  is  an                                                                   
investment owned  utility. It  was funded through  the Denali                                                                   
Commission Request for Proposal  (RFP) process for evaluating                                                                   
the  project.  In addition,  the  money appropriated  to  the                                                                   
Alaska   Energy   Authority   (AEA)   includes   a   Railbelt                                                                   
8:54:42 PM                                                                                                                    
Representative Hawker  noted that one  of the missions  is to                                                                   
avoid  government  waste.  No  one  from  TDX  has  requested                                                                   
funding  from  his office.  The  project  could be  a  viable                                                                   
energy project for the state.                                                                                                   
Representative  Gara explained that  voting for or  against a                                                                   
budget does not mean that the  legislator supports or opposes                                                                   
any of the particular projects  in the budget. He pointed out                                                                   
that Representative  Crawford  had fought  hard and  long for                                                                   
the  Fire  Island  wind  project.  There  were  a  number  of                                                                   
projects because the  capital budget was too big.  It was not                                                                   
a fair  representation of  Representative Crawford's  work on                                                                   
the Fire Island wind project.                                                                                                   
Representative Crawford noted  that he did not mean to offend                                                                   
anyone  at  the  table.  He explained  his  position  on  the                                                                   
capital budget. The $2 million  dollars was the due diligence                                                                   
portion. The entire  project would cost $1.7  billion and put                                                                   
many people to work.                                                                                                            
Vice-Chair Stoltze maintained the objection.                                                                                    
9:01:10 PM                                                                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Nelson, Crawford, Gara                                                                                                
OPPOSED:  Hawker,  Kelly,  Stoltze,  Thomas,  Foster,  Meyer,                                                                   
Representative Joule was not present for the vote.                                                                              
The MOTION FAILED (3-7).                                                                                                        
9:01:53 PM                                                                                                                    
Representative Crawford  MOVED to ADOPT Amendment  #3.  Vice-                                                                   
Chair Stoltze OBJECTED.                                                                                                         
Representative  Crawford explained the  Trash to  Gas project                                                                   
to turn municipal garbage into  methane; the gas is currently                                                                   
collected and  flared off, wasting  3.5 to 4 MW  of potential                                                                   
electric  power daily.  Municipal Light  and Power (MP&L)  in                                                                   
Anchorage is a  partner in this project. Anchorage  could get                                                                   
3.5 to 4  MW of power by  next summer. A generator  set would                                                                   
be  installed  with  the  potential to  add  another  as  the                                                                   
project expands.                                                                                                                
9:04:31 PM                                                                                                                    
Representative Hawker  said the Municipality of  Anchorage is                                                                   
good at letting the legislature  know what its needs are, but                                                                   
they haven't contacted  him about this being  a priority. The                                                                   
project sounds  as though it has  a great deal of  merit, but                                                                   
he doesn't  have enough information  to do due  diligence and                                                                   
vote for it at this time.                                                                                                       
Representative Gara  noted that Representative  Crawford took                                                                   
the initiative to  find and research this project  and should                                                                   
not  be  criticized   for  taking  this   approach.  Co-Chair                                                                   
Chenault  noted that  the  comments were  not  intended as  a                                                                   
criticism  of Representative  Crawford.  Representative  Gara                                                                   
felt  that  Representative  Crawford   should  be  commended.                                                                   
There are  far too many projects  for the $50 million  in the                                                                   
fund now.                                                                                                                       
9:07:51 PM                                                                                                                    
Vice-Chair  Stoltze  said that  it  would be  appropriate  to                                                                   
bring some homework backing up  the project to the committee.                                                                   
These sale  agreements are  much more  complicated and  it is                                                                   
important to have all of the details.                                                                                           
9:09:35 PM                                                                                                                    
Vice-Chair  Stoltze   would  like   to  ask  many   questions                                                                   
regarding  this   proposal  and   would  like  to   have  the                                                                   
Regulatory  Commission of  Alaska available  to answer  them.                                                                   
The vetting process should be applied to all.                                                                                   
Representative Chenault  noted that AEA  is going out  to bid                                                                   
on a  number of  these projects  this month. Ms.  Fisher-Goad                                                                   
explained that an RFQ has just  been completed with 5 million                                                                   
dollars  of projects.  Remaining funds  from the $50  million                                                                   
dollar appropriation  are going out soon. Included  will be a                                                                   
solicitation  for   the  additional  $50  million   worth  of                                                                   
projects for FY 2010 coming soon.                                                                                               
Representative Gara asked why  it took four months to get the                                                                   
RFP out.  Ms. Fisher-Goad answered  that she didn't  think it                                                                   
was particularly slow.                                                                                                          
9:13:20 PM                                                                                                                    
Representative  Thomas  asked if  the  RFP's  were for  other                                                                   
projects. Ms. Fisher-Goad responded  that the initial RFP was                                                                   
prior to HB152 passing. Representative  Thomas clarified that                                                                   
the RFP requested now will be  for the $50 million from HB152                                                                   
in September. Ms. Fisher-Goad affirmed.                                                                                         
Representative  Thomas recounted  an anecdote,  and asked  if                                                                   
ten years was the approximate  time it took from the start to                                                                   
completion  of   this  type   of  project.  Ms.   Fisher-Goad                                                                   
confirmed that  especially wind power projects  can take more                                                                   
Co-Chair  Chenault  realized  that  the  committee  had  been                                                                   
distracted from the  amendment, but that it  was important to                                                                   
know that  the department  is working  forward. The  money in                                                                   
the  renewable energy  fund should  be  spent cautiously.  He                                                                   
believed that there were many worthy projects.                                                                                  
9:16:06 PM                                                                                                                    
Representative  Crawford  wrapped-up.  He  thought  that  his                                                                   
amendment  was  good, because  it  would  stop the  waste  of                                                                   
useable energy.                                                                                                                 
9:16:44 PM                                                                                                                    
A roll call vote was taken on the motion.                                                                                       
IN FAVOR: Nelson, Crawford, Gara                                                                                                
OPPOSED: Kelly, Stoltze,  Thomas,  Foster, Hawker,  Chenault,                                                                   
Representative Joule was not present for the vote.                                                                              
The MOTION FAILED (3-7).                                                                                                        
9:17:32 PM                                                                                                                    
Representative Nelson WITHDREW Amendment #4.                                                                                    
Representative Gara noted that  all the job training projects                                                                   
had been  taken out  of the  bill. He  observed that  the job                                                                   
training projects  were similar to the road  projects in that                                                                   
initiating  some  projects  soon would  be  advantageous.  He                                                                   
asked  for  the  position  of the  Department  of  Labor  and                                                                   
Workforce Development regarding the training projects.                                                                          
9:19:27 PM                                                                                                                    
GUY BELL,  ASSISTANT COMMISSIONER  AND DIRECTOR,  DIVISION OF                                                                   
ADMINISTRATIVE  SERVICES, DEPARTMENT  OF LABOR AND  WORKFORCE                                                                   
DEVELOPMENT,  commented on the  job training legislation  and                                                                   
stated  that  there are  significant  gaps  that need  to  be                                                                   
addressed immediately.  Non residents  working in  Alaska are                                                                   
taking   home   around   $1.5   billion   dollars   annually.                                                                   
Significant  issues  include   the  inability  for  technical                                                                   
schools to provide  education programs without  the requested                                                                   
funding  along with  aiding today's  workforce shortages  and                                                                   
preparing for jobs ahead.                                                                                                       
9:20:53 PM                                                                                                                    
Representative  Gara  asked  if  any  of  the  projects  were                                                                   
intended for the  construction or upgrade of  facilities. Mr.                                                                   
Bell  responded   that  there  were  two   specific  projects                                                                   
concerning acquisition  of equipment.  The first was  for the                                                                   
University  of  Alaska  to acquire  training  simulators  for                                                                   
heavy  equipment  operation.  This  would  have  allowed  the                                                                   
University  to purchase  mobile simulators.  The second  item                                                                   
was for the  Alaska Works Partnership for the  acquisition of                                                                   
training   equipment  for  the   pipeline  training   center.                                                                   
Representative  Gara requested  the costs  for the  projects.                                                                   
Mr. Bell stated  that $1,720,000 was requested  for the first                                                                   
project  entailing a  25 percent  industry contribution.  The                                                                   
cost of the second project was  $2,287,000, again requiring a                                                                   
25 percent industry contribution.                                                                                               
9:22:21 PM                                                                                                                    
Representative Gara asked if the  funding efforts for the job                                                                   
training operations  were considered the most  important. Mr.                                                                   
Bell answered that  the highest priority project  was for the                                                                   
career and technical education grant program.                                                                                   
There  is  a   need  in  many  school  districts   for  basic                                                                   
vocational education.  A competitive  grant program  would be                                                                   
the best  way to  achieve immediate  return  to the state  in                                                                   
current  technical education.  The  initial  request was  for                                                                   
$5.3 million for both the administration  and the competitive                                                                   
grant program for each year of the five year program.                                                                           
9:23:57 PM                                                                                                                    
Representative  Gara  asked the  number  of  kids that  would                                                                   
benefit from  the programs if  funded. Mr. Bell did  not have                                                                   
an estimate,  but  stated that  the goal was  to reach  every                                                                   
school  district in some  fashion. Some  of the  construction                                                                   
academies  in   Fairbanks,  Anchorage,  and   Juneau  already                                                                   
provide   some  necessary   benefits.  He   hoped  for   more                                                                   
opportunities  in  rural  Alaska  and  for  school  districts                                                                   
without current technical programs.                                                                                             
Representative  Gara asked  for  the total  request from  the                                                                   
Department of Labor.  Mr. Bell  stated that the total request                                                                   
was $42.7 million dollars for the five year program.                                                                            
9:25:23 PM                                                                                                                    
Representative Nelson  asked about the simulators  for use at                                                                   
the University.   Mr. Bell explained that the  University has                                                                   
been working with  the department for a few  months exploring                                                                   
the different types of simulated  training methods available.                                                                   
These would include training modules  for a front end loader,                                                                   
dozer, excavator,  and mining visualizer. He  opined that the                                                                   
simulators were effective models  that could deliver training                                                                   
to  a  large  number  of  people at  a  low  cost.  With  the                                                                   
opportunity to train  and the technology to  deliver on sight                                                                   
training, this program would be cost effective.                                                                                 
Representative Nelson understood  that the simulated training                                                                   
method  allowed   a  student   to  become  skilled   in  many                                                                   
construction methods. These skills  could help young Alaskans                                                                   
work on existing projects. Mr. Bell affirmed.                                                                                   
Representative   Nelson   asked   if   people   had   already                                                                   
participated in this simulator  project. Mr. Bell stated that                                                                   
the  simulator  would  be  a   new  acquisition  and  is  not                                                                   
currently  available in Alaska.  Representative Nelson  asked                                                                   
if  the  simulator  was  mobile   and  could  be  transferred                                                                   
throughout campuses. Mr. Bell affirmed.                                                                                         
9:27:58 PM                                                                                                                    
CLARK   BISHOP,  COMMISSIONER,   DEPARTMENT   OF  LABOR   AND                                                                   
WORKFORCE   DEVELOPMENT  commented   that  a  simulator   was                                                                   
transported to  a local mining  convention and he  would like                                                                   
to  see  one  brought  to  Juneau   for  the  review  of  the                                                                   
Representative   Thomas    suggested   that    the   academic                                                                   
environment  of the  University  might not  provide the  best                                                                   
education. Commissioner Bishop  responded that the University                                                                   
environment was adequate. He was  not prepared to discuss the                                                                   
vision  of  the University  and  skill  trades. He  had  been                                                                   
promoting  the  mining  industry  in an  effort  to  increase                                                                   
Alaska hire.  If there was  a need for  the simulator  in any                                                                   
district it could be transported.                                                                                               
9:31:06 PM                                                                                                                    
Representative Thomas asked the  costs for the simulators. He                                                                   
wondered if an individual could  utilize the training in some                                                                   
smaller   communities   without   traveling   for   training.                                                                   
Commissioner Bishop  responded that  the cost was  $1 million                                                                   
dollars  for  five  packages.  Mr. Bell  corrected  that  two                                                                   
simulators cost  $275 thousand  dollars and each  module that                                                                   
offers  the  simulation  for the  machines  varies  from  $55                                                                   
thousand to $120 thousand.                                                                                                      
Representative   Hawker    understood   that    there   would                                                                   
potentially be  a new statewide  education program.  He asked                                                                   
if the University intended to  accommodate the maintenance of                                                                   
the program.   Mr. Bell stated  that they had  worked closely                                                                   
with the  University creating this  program as an  adjunct to                                                                   
the  training that  is  offered today.  The  request was  the                                                                   
Universities', and was sponsored  by the department. Included                                                                   
in  the funding  request,  was the  cost  of maintaining  the                                                                   
9:34:14 PM                                                                                                                    
Vice-Chair  Stoltze   criticized  eligibility   for  training                                                                   
programs  based  on union  affiliation.  Mr.  Bell  discussed                                                                   
another program  for which funding  had been requested.  This                                                                   
scholarship  program  was  open   to  all  institutions.  The                                                                   
program  was tuition  based and  non-biased  with respect  to                                                                   
affiliation  of  any  kind. This  program  would  help  place                                                                   
students in  a place of learning  that was specific  to their                                                                   
choice. The program  is directed to all school  districts and                                                                   
there is no inherent bias; it is a comprehensive program.                                                                       
9:36:39 PM                                                                                                                    
Representative Gara  stated that the Department  of Labor and                                                                   
Workforce  Development's priority  training program  included                                                                   
$8.7 million dollars to fund the  three discussed efforts. He                                                                   
MOVED a conceptual  amendment for $8.7 million  to fund those                                                                   
efforts.  These efforts  included the  two equipment  related                                                                   
items and the first training program.                                                                                           
Co-Chair Chenault OBJECTED. He  asked to know the funds spent                                                                   
last  year  for   training.  Mr.  Bell  explained   that  the                                                                   
Department received  money from a number of  funding sources.                                                                   
These included  federal formula  funding, the state  training                                                                   
employment program,  and the Denali  training fund  on behalf                                                                   
of the  Denali Commission. In  FY08, $4.7 million  was issued                                                                   
to  various entities  related  to gas  line grants.  Co-Chair                                                                   
Chenault  asked if  the total  was $13  million dollars.  Mr.                                                                   
Bell estimated  that in  FY09, $13  million worth of  funding                                                                   
was appropriated,  including federal, General Fund  and state                                                                   
training programs, and a designated federal grant.                                                                              
Co-Chair  Chenault was  concerned that  some of the  projects                                                                   
were  worthwhile and  should be  considered.  There was  some                                                                   
delay  in  creating  a  plan  to  address  pipeline  training                                                                   
issues. Commissioner Bishop affirmed.                                                                                           
Co-Chair Chenault MAINTAINED the objection.                                                                                     
9:41:22 PM                                                                                                                    
Representative   Gara    wrapped   up   that    without   the                                                                   
appropriations there will be no  vocational training money in                                                                   
the bill.  If  the $5.3 million for the  vocational technical                                                                   
grant  fund  was  approved this  special  session,  then  the                                                                   
benefit to students would be available this school year.                                                                        
A roll call vote was taken on  the motion to adopt Conceptual                                                                   
Amendment #5.                                                                                                                   
IN FAVOR: Nelson, Foster, Gara                                                                                                  
OPPOSED: Kelly, Thomas, Hawker, Chenault, Thomas                                                                                
Vice-Chair  Stoltze, Representative  Joule, &  Representative                                                                   
Crawford were not present for the vote.                                                                                         
The MOTION FAILED (3-5).                                                                                                        
9:43:39 PM                                                                                                                    
Co-Chair  Meyer directed  comments to  the projects  that are                                                                   
and  are  not  being  funded.  He  encouraged  pride  in  the                                                                   
progress that had been made. He  agreed that renewable energy                                                                   
was the way of  the future. Progress can now  occur much more                                                                   
quickly. He  encouraged thorough  analysis of each  and every                                                                   
9:46:01 PM                                                                                                                    
Representative  Gara agreed  that the  state should  not move                                                                   
forward with projects that have  not been vetted. His concern                                                                   
was that AEA would not be able  to analyze projects that have                                                                   
not received funding.                                                                                                           
9:46:50 PM                                                                                                                    
Vice-Chair  Stoltze  noted  his   appreciation  for  the  $25                                                                   
million for ANGA and the pursuit of instate gas.                                                                                
Representative   Gara   reiterated    that   there   was   no                                                                   
appropriation for job training  funding, and he hoped that it                                                                   
would change.  He asked if  the bill  would be on  the floor,                                                                   
and  if  amendments should  be  prepared.  Co-Chair  Chenault                                                                   
stated that the bill would be on the floor tonight.                                                                             
Representative  Gara directed comments  to the Department  of                                                                   
Labor  and Workforce  Development for  floor discussion  this                                                                   
Co-Chair Meyer commented that SB 4002 would be before the                                                                       
Vice-Chair Stoltze MOVED to REPORT CSHB 4001 (FIN) out of                                                                       
Committee with individual recommendations. There being NO                                                                       
OBJECTION, it was so moved.                                                                                                     
CSHB 4001 (FIN) was reported out of Committee with a "do                                                                        
pass" recommendation.                                                                                                           
The meeting was adjourned at 9:49 PM                                                                                            

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