Legislature(2011 - 2012)HOUSE FINANCE 519

04/12/2011 08:30 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ SB 102 AK AFFORDABLE HEATING PROGRAM PAYMENTS TELECONFERENCED
Heard & Held
+ HB 183 APPLICATION OF VILLAGE SAFE WATER ACT TELECONFERENCED
Heard & Held
+= HB 103 POWER PROJECT; ALASKA ENERGY AUTHORITY TELECONFERENCED
Scheduled But Not Heard
+ HJR 4 CONST. AM: TRANSPORTATION FUND TELECONFERENCED
Heard & Held; Assigned to a Subcommittee
+ HB 89 EXTRACTION OF BEDLOAD MATERIAL TELECONFERENCED
Moved CSHB 89(RES) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 12, 2011                                                                                           
                         8:34 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
8:34:34 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze  called the House Finance  Committee meeting                                                                   
to order at 8:34 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Mark Neuman                                                                                                      
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Peggy  Wilson, Sponsor;  Representative  Paul                                                                   
Seaton, Sponsor;  Representative  Alan Austerman; Jay  Livey,                                                                   
Staff,   Senator  Lyman   Hoffman;   Ron  Kreher,   Director,                                                                   
Division  of  Public  Assistance, Department  of  Health  and                                                                   
Social  Services;  Sheila  Peterson,   Staff,  Representative                                                                   
Alan Dick; Larry Devilbiss, Mayor, Mat-Su Borough.                                                                              
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Bill  Griffith,   Facility  Programs  Manager,   Division  of                                                                   
Water,  Department   of  Commerce,  Community   and  Economic                                                                   
Development;  Lindsay  Wolter,  Assistant  Attorney  General,                                                                   
Civil  Division, Environmental  Section,  Department of  Law,                                                                   
Anchorage;  Jason Mayrand,  Mayor of  Nenana; Marty  Parsons,                                                                   
Deputy Director, Division of Mining, Land and Water,                                                                            
Department of Natural Resources.                                                                                                
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HJR 4     CONST. AM: TRANSPORTATION FUND                                                                                        
                                                                                                                                
          HJR   4  was  HEARD   and  HELD  and   referred  to                                                                   
          subcommittee  consisting of Vice-chair  Fairclough,                                                                   
          Co-Chair    Thomas,     Representative    Costello,                                                                   
          Representative    Doogan,   Representative    Peggy                                                                   
          Wilson     (adjunct     member)     for     further                                                                   
          consideration.                                                                                                        
                                                                                                                                
SB 102    AK AFFORDABLE HEATING PROGRAM PAYMENTS                                                                                
                                                                                                                                
          SB  102  was  HEARD   and  HELD  in  committee  for                                                                   
          further consideration.                                                                                                
                                                                                                                                
HB 183    APPLICATION OF VILLAGE SAFE WATER ACT                                                                                 
                                                                                                                                
          HB  183  was  HEARD   and  HELD  in  committee  for                                                                   
          further consideration.                                                                                                
                                                                                                                                
HB 89     EXTRACTION OF BEDLOAD MATERIAL                                                                                        
                                                                                                                                
          CS HB  89 (RES) was REPORTED out of  committee with                                                                   
          a  "do  pass"  recommendation   and  with  one  new                                                                   
          indeterminate   note   from   the   Department   of                                                                   
          Transportation  and   one  new  indeterminate  note                                                                   
         from the Department of Natural Resources.                                                                              
                                                                                                                                
HB 103    POWER PROJECT; ALASKA ENERGY AUTHORITY                                                                                
                                                                                                                                
          HB 103 was SCHEDULED but not HEARD.                                                                                   
                                                                                                                                
HOUSE JOINT RESOLUTION NO. 4                                                                                                  
                                                                                                                                
     Proposing amendments to the Constitution of the State                                                                      
     of Alaska creating a transportation infrastructure                                                                         
     fund.                                                                                                                      
                                                                                                                                
8:35:35 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE    PEGGY   WILSON,    SPONSOR,   provided    a                                                                   
comprehensive   overview   of   the   Alaska   Transportation                                                                   
Infrastructure  Fund (ATIF). She  explained that HJR  4 would                                                                   
place a  constitutional  amendment before  the voters  to re-                                                                   
establish    a    dedicated     fund    for    transportation                                                                   
infrastructure.  She reported  that HB 30(DEDICATED TRANSPORT                                                                   
FUND/PUB TRANSPORT)  and HB 31(TRANSPORT  INFRASTRUCTURE FUND                                                                   
APPROP) were the enabling and  appropriating pieces of HJR 4.                                                                   
Together,   the   trio   of    bills   created   the   Alaska                                                                   
Transportation  Infrastructure Fund. The  fund created  by an                                                                   
endowment   and  seeded   with  $1   billion  [general   fund                                                                   
appropriation]  would grow  through  investment earnings.  In                                                                   
addition,   revenue  from   the  motor   fuel  tax,   vehicle                                                                   
registration fees,  studded tire tax,  and 50 percent  of the                                                                   
vehicle  rental tax  compensated  the fund.  The  legislature                                                                   
could direct other  transportation fees and taxes  into ATIF.                                                                   
The legislature  would appropriate up  to six percent  of the                                                                   
market value  of ATIF averaged  over the previous  five years                                                                   
and 50  percent of the revenue  deposited the  previous year.                                                                   
The  fund was  expected to  generate $100  million the  first                                                                   
year and increase  over $3 million each subsequent  year. She                                                                   
referred  to a spreadsheet  handout "ATIF  Payout Rate  6.0%"                                                                   
(copy  on  file)  developed  by  the  Department  of  Revenue                                                                   
depicting  estimated  payout  rates.  The  legislature  would                                                                   
appropriate  ATIF  funds  and  its  administrative  costs  in                                                                   
tandem with the  budget cycle. Administrative  costs would be                                                                   
deducted from  by the fund.  She envisioned ATIF  exclusively                                                                   
funding  transportation  capital   and  deferred  maintenance                                                                   
projects.  The   provision  was  included  in   the  enabling                                                                   
statute  (HB  30).  She  assured  that  in  times  of  budget                                                                   
shortfalls  legislative   flexibility  was  built   into  the                                                                   
legislation.  The legislature  could  appropriate ATIF  funds                                                                   
for any  Department of  Transportation and Public  Facilities                                                                   
(DOT)  operations  or  transportation  related  project.  The                                                                   
appropriation  would require  a  change in  the statute  that                                                                   
defined   ATIF  use   but   not  require   a   constitutional                                                                   
amendment.                                                                                                                      
                                                                                                                                
8:39:39 AM                                                                                                                    
                                                                                                                                
Representative  Peggy  Wilson  announced  that  she  did  not                                                                   
commit  any transportation  taxes  to ATIF's  revenue  stream                                                                   
that were dedicated for other uses.                                                                                             
                                                                                                                                
Co-Chair  Thomas asked  whether the ATIF  funds would  solely                                                                   
cover  all   transportation  capital   expenses  or   require                                                                   
additional  general  funds  as   well.  Representative  Peggy                                                                   
Wilson expected  that initially,  general fund  appropriation                                                                   
was necessary  to preserve  the ATIF funds  for the  back log                                                                   
of  deferred maintenance.  She  anticipated  that ATIF  would                                                                   
primarily  cover transportation  deferred maintenance,  large                                                                   
high priority projects and projects related to safety.                                                                          
                                                                                                                                
Representative  Neuman   noted  that  much  of   the  revenue                                                                   
allocated to ATIF  was used to operate the  Division of Motor                                                                   
Vehicles (DMV). He  wondered how DMV would operate  with lost                                                                   
revenue.  Representative  Peggy  Wilson responded  that  ATIF                                                                   
funds would pay for DMV operations.                                                                                             
                                                                                                                                
Representative  Neuman  asked if  the legislation  created  a                                                                   
board to oversee  distribution of ATIF funds. He  did not see                                                                   
that  in   the  current  legislation.  Representative   Peggy                                                                   
Wilson explained  that HB 30 created  a 17 member  board with                                                                   
two  non-voting  legislative members.  The  board  supervised                                                                   
the fund. She  furthered that the board acted  in an advisory                                                                   
capacity, forwarding  recommendations on to the  governor and                                                                   
legislature.                                                                                                                    
                                                                                                                                
8:45:16 AM                                                                                                                    
                                                                                                                                
Representative Neuman  asked whether the legislature  had the                                                                   
final  say.  Representative  Peggy   Wilson  replied  in  the                                                                   
affirmative.                                                                                                                    
                                                                                                                                
Representative Gara  stated that the sponsor had  done a good                                                                   
job drafting the bill.                                                                                                          
                                                                                                                                
Co-Chair Stoltze  announced that  HJR 4  was referred  to the                                                                   
same subcommittee  established for HB  30 and HB  31, chaired                                                                   
by   Vice-chair   Fairclough,   for  interim   hearings   and                                                                   
activities.                                                                                                                     
                                                                                                                                
HJR  4  was  HEARD and  HELD  and  referred  to  subcommittee                                                                   
consisting   of  Vice-chair   Fairclough,  Co-Chair   Thomas,                                                                   
Representative      Costello,     Representative      Doogan,                                                                   
Representative  Peggy  Wilson  (adjunct member)  for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 102                                                                                                           
                                                                                                                                
     "An Act relating to certain payments made under the                                                                        
     Alaska affordable heating program."                                                                                        
                                                                                                                                
8:47:16 AM                                                                                                                    
                                                                                                                                
JAY LIVEY,  STAFF, SENATOR LYMAN  HOFFMAN, explained  that SB                                                                   
102  amended   the  Alaska   Affordable  Heating   Assistance                                                                   
Program (AHAP).  The changes clarified language  that allowed                                                                   
the  Department  of  Health and  Social  Services  (DHSS)  to                                                                   
prorate benefits  due to a  shortage of funds.  He summarized                                                                   
that  in the  prior  year two  of Alaska's  heating  programs                                                                   
were  combined.  The  legislature  combined  the  Low  Income                                                                   
Heating  and Energy  Assistance Program  (LIHEAP) and  Alaska                                                                   
Heating  Assistance Program  to form  the Affordable  Heating                                                                   
Assistance  Program (AHAP).  The  legislation  [SB 220]  that                                                                   
created the  new program  contained language that  authorized                                                                   
DHSS to prorate  benefits. The department was  concerned that                                                                   
the  language did  not provide  sufficient discretion  needed                                                                   
for  benefit pro-rationing.  He  emphasized that  SB 102  was                                                                   
not a change  in policy but a clarification  of the proration                                                                   
language.  Mr.  Livey  elaborated  that  the  Senate  Finance                                                                   
Committee  had  worked  with   DHSS  on  the  legislation  to                                                                   
address   the  concerns.   The   legislation  contained   two                                                                   
provisions   to  ensure  clarification.   The  first   change                                                                   
established  that  the department  could  calculate  benefits                                                                   
differently  from  the customary  calculations  contained  in                                                                   
statute  if pro rationing  was necessary.  The second  change                                                                   
added the  words "on a  pro rata basis"  to clarify  that pro                                                                   
rationing was allowed.                                                                                                          
                                                                                                                                
Co-Chair  Stoltze  surmised  that the  clarification  was  in                                                                   
anticipation  of reduced  federal funds.  Mr. Livey  believed                                                                   
that was  a fair assessment. He  was aware of  federal budget                                                                   
proposals  that reduced  states shares  of federal funds.  He                                                                   
discussed  that  AHAP  was comprised  of  general  funds  and                                                                   
federal money.  In the event of  a shortage of  federal funds                                                                   
DHSS    would   prorate    the    reduction   in    benefits.                                                                   
Alternatively,  the legislature  could choose to  appropriate                                                                   
additional general  funds. Pro rationing would act  as a stop                                                                   
gap  until the  legislature  could  act. Prorating  gave  the                                                                   
department flexibility in either scenario.                                                                                      
                                                                                                                                
Representative  Doogan referred to  language on Page  2, line                                                                   
7,  of the  bill.  His interpretation  was  that the  benefit                                                                   
would  increase if  there was  extra  money in  the fund.  He                                                                   
wondered whether  the bill provided for pro  rationing paying                                                                   
more in  times of  plenty. Mr. Livey  informed that  the bill                                                                   
language  covered pro  rationing  in times  of shortfall  and                                                                   
when  more federal  funds were  received  than expected.  The                                                                   
upward  proration  was necessary  so  no federal  funds  were                                                                   
left "on  the table." He identified  Page 1, lines  11-12, as                                                                   
the department's  ultimate concern;  the clear authority  for                                                                   
downward proration.                                                                                                             
                                                                                                                                
Representative  Doogan asked about  the amount that  could be                                                                   
paid out  on a pro  rata basis. He  inferred from  the bill's                                                                   
language  that  upward  proration  was  allowed  with  excess                                                                   
funds from  any source.  He wondered whether  a floor  or cap                                                                   
on   benefit   disbursement  was   established.   Mr.   Livey                                                                   
elaborated  that  the cap  was  reflected  in the  amount  of                                                                   
federal   funds   authorized    and   state   general   funds                                                                   
appropriated. The  previous bill, SB  220 was not  written as                                                                   
an  entitlement  that  authorized  an  absolute  disbursement                                                                   
based on  eligibility, making  downward proration  necessary.                                                                   
He elucidated  that  upward pro  rationing authority  enabled                                                                   
the state  to spend less  general fund dollars  if additional                                                                   
federal funds became available.                                                                                                 
                                                                                                                                
8:55:10 AM                                                                                                                    
                                                                                                                                
Representative  Doogan did  not see a  limitation on  federal                                                                   
funds in  the bill.  Mr. Livey replied  that he was  probably                                                                   
correct.  He discerned  that DHSS could  continue upward  pro                                                                   
rationing provided  the federal government  increased funding                                                                   
and the legislature authorized the expenditure.                                                                                 
                                                                                                                                
Co-Chair Stoltze asked if the scenario was likely.                                                                              
                                                                                                                                
RON  KREHER,   DIRECTOR,  DIVISION   OF  PUBLIC   ASSISTANCE,                                                                   
DEPARTMENT  OF   HEALTH  AND  SOCIAL  SERVICES,   stated  the                                                                   
scenario  was fairly unlikely.  He added  that typically  the                                                                   
federal government  funding was  not sufficient to  keep pace                                                                   
with the statutorily  required payout. He explained  that the                                                                   
AHAP mandated  benefit payout was  based on the  prior year's                                                                   
value  of a barrel  of North  Slope crude  oil per  community                                                                   
heating  point. The  federal  funding did  not  keep up  with                                                                   
that level of payout.                                                                                                           
                                                                                                                                
Representative  Wilson  provided  an  example  from  personal                                                                   
experience  in  non-profit  work. She  remembered  an  upward                                                                   
proration  benefit  paid  because  less  people  applied  for                                                                   
heating assistance  than expected. The department  aspired to                                                                   
help as many  people as possible and held earlier  payouts at                                                                   
anticipated  levels  of  need.  The  pro  rationing  occurred                                                                   
after the  April application  deadline. Mr. Kreher  concurred                                                                   
with her experience.  The department does  issue supplemental                                                                   
payments with  excess funds at  the end of the  program year.                                                                   
He  explained  that occasionally,  DHSS  did  receive  excess                                                                   
federal  contingency  funds and  only  a fixed  percent  were                                                                   
allowed to carry forward.                                                                                                       
                                                                                                                                
Representative Edgmon  supported the legislation.  He pointed                                                                   
out   the   program's  significant   importance   for   rural                                                                   
communities faced  with exorbitant  home fuel oil  costs. The                                                                   
bulk  of last  year's  AHAP benefits  ($29  million) went  to                                                                   
Fairbanks, Anchorage,  and the  Mat-Su area. The  program has                                                                   
positive statewide impacts.                                                                                                     
                                                                                                                                
8:59:43 AM                                                                                                                    
                                                                                                                                
Mr.  Kreher  confirmed  that 60  percent  of  the  recipients                                                                   
lived  in  urban   areas.  He  added  that   the  payout  per                                                                   
household  was higher  in  rural areas  because  of the  high                                                                   
heating cost.                                                                                                                   
                                                                                                                                
Representative Edgmon  revealed that in the Bristol  Bay area                                                                   
the program served  440 households in FY 09  and increased to                                                                   
653 in FY 10.  The cost of heating fuel was  $6 per gallon in                                                                   
Dillingham. He believed the program was critical.                                                                               
                                                                                                                                
Representative Joule  felt that the people who  were eligible                                                                   
for the  program were appreciative  of the help.  He received                                                                   
complaints  that  some  recipients attempted  to  sell  their                                                                   
benefits.  He  asked   whether  there  was  a   mechanism  to                                                                   
determine if  a person was  bootlegging from the  program and                                                                   
if  there was  a way  to deal  with the  problem. Mr.  Kreher                                                                   
recalled   that  DHSS   can   prosecute   fraud  related   to                                                                   
misrepresentation  of need.  He  was uncertain  if a  statute                                                                   
related to  the resale of  benefited heating oil  existed. He                                                                   
felt the problem was difficult to prove.                                                                                        
                                                                                                                                
Representative  Joule  restated  that  his  constituents  and                                                                   
other  rural  citizens  voiced   concern  about  the  re-sale                                                                   
problem.  He noted  that most  recipients really  appreciated                                                                   
the  program.  The  problem  was   when  people  misused  the                                                                   
benefit. He  perceived that two  issues needed  definition to                                                                   
craft a  solution: what  constituted a  report and  violation                                                                   
and assigning  consequences. He emphasized the  importance of                                                                   
the  issue.  Mr.  Kreher  assured that  DHSS  will  draft  an                                                                   
appropriate regulation  as part of the  emergency regulations                                                                   
that  were  required  for  the   legislation.  Representative                                                                   
Joule  requested   a  copy  of  the  drafted   language  upon                                                                   
completion.                                                                                                                     
                                                                                                                                
Vice-chair  Fairclough wondered  whether a legislative  audit                                                                   
of the program was performed.                                                                                                   
                                                                                                                                
9:05:15 AM                                                                                                                    
                                                                                                                                
Mr. Kreher  affirmed  that an  audit was part  of the  annual                                                                   
review process.  Vice-chair Fairclough wondered  whether DHSS                                                                   
established  annual heating  fuel  consumption per  household                                                                   
data. She  thought that the  data could alert  the department                                                                   
of suspicious use.                                                                                                              
                                                                                                                                
Mr.  Kreher  disagreed  that   suspicious  use  was  easy  to                                                                   
detect.  He argued  that AHAP  was  designed to  meet only  a                                                                   
portion of  home heating  costs. He opined  that it  would be                                                                   
extremely difficult  to accurately monitor and  maintain that                                                                   
information. He  was uncertain how the department  would know                                                                   
that the fuel was being redistributed.                                                                                          
                                                                                                                                
Vice-chair Fairclough  believed that  it was a  fairly simple                                                                   
calculation. She  thought that the data was  collected in the                                                                   
application  process.  She wondered  whether  DHSS  monitored                                                                   
the  average  cost  of  energy  per  household  in  different                                                                   
regions of the state. Mr. Kreher answered in the negative.                                                                      
                                                                                                                                
Vice-chair  Fairclough  explained  that  a  possible  benefit                                                                   
ceiling  might be established  by figuring  the average  cost                                                                   
of energy  and the  percentage of  household income  spent to                                                                   
heat  a home.  She  suggested a  benefit  approximate to  the                                                                   
percentage of income spent to pay for the heating costs.                                                                        
                                                                                                                                
9:08:53 AM                                                                                                                    
                                                                                                                                
Vice-chair  Fairclough asked  whether there  was a  statutory                                                                   
mechanism  that  automatically  re-funded  the  program  each                                                                   
year.  Mr.   Kreher  replied  that  the   statute  originally                                                                   
intended that the  Department of Revenue (DOR)  establish the                                                                   
fund and  a mechanism to refill  the fund based on  the prior                                                                   
year's price per  barrel of crude oil. The  structure was not                                                                   
established.   The  program  received   fixed  general   fund                                                                   
appropriations in past years.                                                                                                   
                                                                                                                                
Vice-chair   Fairclough    wondered   whether    Power   Cost                                                                   
Equalization  (PCE)  was capitalized.  Mr.  Kreher  responded                                                                   
that PCE was not operated by the department.                                                                                    
                                                                                                                                
Mr. Livey interjected  that the PCE program  was endowed. The                                                                   
proceeds from  the endowment contributed  some of  the annual                                                                   
costs of  the program. A  general fund appropriation  made-up                                                                   
the difference.                                                                                                                 
                                                                                                                                
Vice-chair  Fairclough  offered that  she  was attempting  to                                                                   
understand  the  revenue  path  into the  AHAP  program.  She                                                                   
recapped that  the PCE revenue  structure had two  streams of                                                                   
revenue.  Mr.  Livey  agreed.  He elaborated  that  the  AHAP                                                                   
program  consisted of  two streams  of  federal funds:  funds                                                                   
from  LIHEAP   and  Affordable  Heating   Assistance  Program                                                                   
combined embody the total amount of federal funding.                                                                            
                                                                                                                                
Vice-chair   Fairclough  wondered   whether  there   was  any                                                                   
overlap in  who could  qualify for each  program and  if DHSS                                                                   
monitored   qualification.  Mr.   Kreher  replied   that  the                                                                   
federal  guidelines served  households up  to 150 percent  of                                                                   
the  poverty level  and AHAP  up  to 225  percent. The  state                                                                   
funds  were  used  solely  for   the  benefactors  above  150                                                                   
percent  of the  poverty level.  He emphasized  there was  no                                                                   
overlap.                                                                                                                        
                                                                                                                                
9:12:54 AM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
9:13:12 AM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr.  Kreher continued  to  explain  that general  funds  were                                                                   
used  to  augment   the  payment  to  the   federally  funded                                                                   
households.  He   reminded  the  committee  that   often  the                                                                   
federal  funding levels  were  insufficient to  pay the  same                                                                   
dollar  value that  was  required under  statute.  Vice-chair                                                                   
Fairclough explained  that she  appreciated the program.  She                                                                   
was endeavoring to understand how the program operated.                                                                         
                                                                                                                                
Representative   Joule  spoke   to  Vice-chair   Fairclough's                                                                   
question  regarding overlap.  He  shared that  in Kotzebue  a                                                                   
consumer  would  qualify  for  Power  Cost  Equalization  but                                                                   
because  of income  not qualify  for  the heating  assistance                                                                   
program.  Some  people  qualify  for both.  He  reminded  the                                                                   
committee  that PCE  only  covered up  to  500 kilowatts  per                                                                   
month.                                                                                                                          
                                                                                                                                
Representative   Gara   requested  a   comprehensive   answer                                                                   
related  to  Representative  Joule's  earlier  concern  about                                                                   
bootlegging.  He  offered  DHSS existing  statutes  it  could                                                                   
employ  as  a  deterrent  effect.  He  cited  the  "crime  of                                                                   
unsworn  falsification."  He defined  that  it  was crime  to                                                                   
sign  for a  benefit  that  was gained  from  a  lie. He  was                                                                   
uncertain  the  statute  was applicable.  He  also  suggested                                                                   
that  a  benefactor  could sign  a  statement  declaring  the                                                                   
household  of  use;  if  the benefit  was  not  used  at  the                                                                   
specified   household  that   would   constitute  fraud.   He                                                                   
qualified  that DHSS should  consult with  the Department  of                                                                   
Law  (DOL).  Mr.  Kreher  replied  that  the  prosecution  of                                                                   
unsworn  falsification  was  standard   in  the  Division  of                                                                   
Public Assistance.                                                                                                              
                                                                                                                                
Representative Joule  was uncertain the problem  was rampant.                                                                   
He  received  complaints and  wanted  to  shed light  on  the                                                                   
issue.  He believed  a  mechanism  was necessary  to  prevent                                                                   
fraud and abuse.                                                                                                                
                                                                                                                                
9:18:49 AM                                                                                                                    
                                                                                                                                
Vice-chair Fairclough  added that she was more  supportive of                                                                   
the entire  program when  there was  a monitoring process  in                                                                   
place to ensure  those entitled received the  assistance. She                                                                   
appreciated Representative Joule's concern.                                                                                     
                                                                                                                                
Representative  Neuman asked what  type of fuel  sources were                                                                   
covered  under the  program. Mr.  Kreher  responded that  all                                                                   
forms of heating  fuels were included under  the program. The                                                                   
department  focused on  the primary  heat  source and  repaid                                                                   
the vendor.                                                                                                                     
                                                                                                                                
Representative  Neuman  asked if  a local  firewood  provider                                                                   
was  considered  a  vendor. Mr.  Kreher  responded  that  the                                                                   
department  made  a  direct  payment   to  the  homeowner  if                                                                   
firewood was the main heating source.                                                                                           
                                                                                                                                
Representative  Neuman asked if  the department ensured  that                                                                   
the payments  were spent  appropriately. Mr. Kreher  restated                                                                   
that  the department  made payments  to  the vendor  whenever                                                                   
possible.  Payments  were  made   to  households  as  a  last                                                                   
resort. The  Division of  Public Assistance maintained  lists                                                                   
of vendors.                                                                                                                     
                                                                                                                                
Representative  Neuman  wanted  to  ensure  that  people  who                                                                   
switched  to alternative  heating sources  had access  to the                                                                   
program.  Mr. Kreher  assured  that was  the  case. He  added                                                                   
that proof of heating costs were compulsory.                                                                                    
                                                                                                                                
Representative Edgmon  underscored that in the  vast majority                                                                   
of cases the  program provided money directly  to the vendor.                                                                   
Mr. Kreher  agreed. He noted  the rare exceptions.  Homeowner                                                                   
payment occurred typically with wood heat.                                                                                      
                                                                                                                                
9:26:07 AM                                                                                                                    
                                                                                                                                
Representative  Doogan clarified  that  his earlier  concerns                                                                   
related to  the amount  that the  legislature wanted  to fund                                                                   
the  program. He  determined that  the language  in the  bill                                                                   
mandated  an  upward  pro  rationing   of  excess  funds.  He                                                                   
thought  that prohibited  the  legislature from  establishing                                                                   
the  level  of funding.  He  requested  that DHSS  provide  a                                                                   
history  of  payouts  from  the  program  that  included  pro                                                                   
rationing.  He felt that  the law  provided the program  very                                                                   
broad authority.                                                                                                                
                                                                                                                                
Vice-chair   Fairclough    wondered   whether    supplemental                                                                   
payments   were   provided  to   the   vendor   and  if   the                                                                   
supplemental benefit  were passed on to the  participant. Mr.                                                                   
Kreher  indicated that  supplemental  payments  were paid  to                                                                   
the vendor for the participants account.                                                                                        
                                                                                                                                
Vice-chair Fairclough OPENED and CLOSED public testimony.                                                                       
                                                                                                                                
SB  102  was   HEARD  and  HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 183                                                                                                            
                                                                                                                                
     "An Act relating to the Village Safe Water Act."                                                                           
                                                                                                                                
9:30:26 AM                                                                                                                    
                                                                                                                                
SHEILA PETERSON,  STAFF, REPRESENTATIVE ALAN  DICK, explained                                                                   
CS  HB 183  (CRA) and  the proposed  changes in  the CS.  She                                                                   
related  that  the  Village Safe  Water  Act  (VSW)  provided                                                                   
grants for  water and sewer  in small communities  in Alaska.                                                                   
The bill  addressed issues of  eligibility. She  informed the                                                                   
committee  that VSW defined  a village  as an  unincorporated                                                                   
community, a second  class city, and a first  class city with                                                                   
less  than  600  residents.  The   legislation  modified  the                                                                   
definition,  modestly  eased   eligibility,  and  established                                                                   
accountability.                                                                                                                 
                                                                                                                                
Ms. Peterson  detailed that the  City of Nenana,  (population                                                                   
370)  applied for  a  VSW grant.  The  community worked  with                                                                   
city  officials  to  plan  and design  an  upgrade  to  their                                                                   
existing water and  sewer system. The existing  system was in                                                                   
use   since  1970.   The   grant   was  awarded.   The   city                                                                   
subsequently  learned  that  they  were  ineligible  for  the                                                                   
grant because Nenana  was a "home rule" city  organized under                                                                   
a charter.  She  delineated that  a home  rule city  received                                                                   
their authority  under an adopted  charter rather  than state                                                                   
statute. The  bill added home  rule municipalities  with less                                                                   
than 1000 residents  eligible for the VSW program.  Under the                                                                   
provision,  Nenana   and  Yakutat   were  eligible   for  VSW                                                                   
funding.                                                                                                                        
                                                                                                                                
Ms. Peterson continued  to discuss the legislation.  The bill                                                                   
raised the population  limit for eligibility for  first class                                                                   
cities   to   1,000.   The  legislation   ensured   that   an                                                                   
"unincorporated   community"  with   a  governing   body  was                                                                   
eligible.  She   defined  "unincorporated  community"   as  a                                                                   
community that  was not a home  rule, first class,  or second                                                                   
class city.  Villages identified  under Alaska Native  Claims                                                                   
Settlement  Act (ANCSA) qualified.  The legislation  intended                                                                   
that  ANSCA villages  would operate  under governing  bodies.                                                                   
She  identified   the  problem.  The  Alaska   Native  Claims                                                                   
Settlement  Act required  that  a village  must  form a  non-                                                                   
profit  or  for profit  corporation  but  did not  mandate  a                                                                   
governing body.                                                                                                                 
                                                                                                                                
9:34:15 AM                                                                                                                    
                                                                                                                                
Ms.  Peterson indicated  that  the CS  endeavored to  include                                                                   
unincorporated  communities. The  CS required  unincorporated                                                                   
communities to adopt governing bodies for VSW eligibility.                                                                      
                                                                                                                                
Vice-chair  Fairclough  asked   whether  Representative  Dick                                                                   
supported the CS. Ms. Peterson affirmed.                                                                                        
                                                                                                                                
Representative  Wilson MOVED to  ADOPT CS  Work Draft  HB 183                                                                   
27-LS0601/I (4/11/11  Bullard) as  a working document  before                                                                   
the committee.                                                                                                                  
                                                                                                                                
Representative Doogan OBJECTED.                                                                                                 
                                                                                                                                
Representative  Doogan asked for  a list  of the eight  first                                                                   
class cities  that would  benefit from  the population  limit                                                                   
increase.  Ms. Peterson  referred  to an  email addressed  to                                                                   
her from Bill  Griffith (4/11/11) (copy on  file) distributed                                                                   
to  the committee  that listed  the  communities. She  listed                                                                   
the   eligible  communities:   Akiachak,   Kipnuk,   Yakutat,                                                                   
Klawock, Hoonah, Ninilchik, King Cove, and Sand Point.                                                                          
9:37:27 AM                                                                                                                    
                                                                                                                                
BILL  GRIFFITH,   FACILITY  PROGRAMS  MANAGER,   DIVISION  OF                                                                   
WATER,  DEPARTMENT   OF  COMMERCE,  COMMUNITY   AND  ECONOMIC                                                                   
DEVELOPMENT (via  teleconference), in response  to a question                                                                   
by  Representative  Neuman,  explained   that  Talkeetna  had                                                                   
water facilities  operated and maintained by the  borough not                                                                   
the   city.  The   borough  received   funding  through   the                                                                   
municipal  matching grant  and  loan program.  Talkeetna  was                                                                   
eligible for the VSW program.                                                                                                   
                                                                                                                                
LINDSAY WOLTER,  ASSISTANT ATTORNEY GENERAL,  CIVIL DIVISION,                                                                   
ENVIRONMENTAL  SECTION,  DEPARTMENT  OF LAW,  ANCHORAGE  (via                                                                   
teleconference),affirmed  Talkeetna's   eligibility  for  VSW                                                                   
grants .                                                                                                                        
                                                                                                                                
Representative  Neuman commented that  the City of  Talkeetna                                                                   
imposed a  tax for water and  sewer services to help  pay for                                                                   
the system the Mat-Su borough provided.                                                                                         
                                                                                                                                
Representative  Costello wondered  about  the change  related                                                                   
to  the   definition  of   "unincorporated  community."   She                                                                   
anticipated  unintended  repercussions  with  the  change  in                                                                   
statute.  Ms.   Peterson  replied  that  the   definition  of                                                                   
village only applied  to the Village Safe Water  Program. She                                                                   
pointed  out that  the CS removed  the ANCSA  list. She  read                                                                   
the  definition  that  replaced  the ANCSA  list  related  to                                                                   
eligibility from the CS, Page 1, lines 9-16:                                                                                    
                                                                                                                                
     (D) the Annette Island Reserve established by 25                                                                           
          U.S.C. 495 for the Metlakatla Indian Community;                                                                       
                                                                                                                                
     (E) a community  with a population between  25 and 1,000                                                                   
          that is represented by (i) a council organized                                                                        
          under 25  U.S.C. 476 (sec. 16 of the Indian                                                                           
          Reorganization Act);                                                                                                  
          (ii) a traditional village council recognized by                                                                      
          the  United States…                                                                                                   
                                                                                                                                
Ms.  Peterson reassured  the  committee  that the  definition                                                                   
only applied to the VSW program.                                                                                                
                                                                                                                                
Ms. Wolter  expressed uncertainty  about the  interpretation.                                                                   
She  discerned  that  the language  appeared  to  single  out                                                                   
native or  tribal governments  eligible  for the grants.  She                                                                   
cautioned  that  possible  constitutional  concerns  existed.                                                                   
She  understood   that  DEC  would  like  to   have  a  local                                                                   
government in place  to administer the grant  and operate the                                                                   
water and sewer  system. She wanted assurance  that mandating                                                                   
tribal  governments  to  form  a  governing  body  would  not                                                                   
present constitutional issues.                                                                                                  
                                                                                                                                
Representative  Costello  understood  that a  governing  body                                                                   
for an unincorporated community was the legislature.                                                                            
                                                                                                                                
9:44:12 AM                                                                                                                    
                                                                                                                                
Ms. Wolter  stated  that she was  unaware of  a statute  that                                                                   
authorized  the  legislature as  the  governing  body for  an                                                                   
unincorporated  community.  She qualified  that  she was  not                                                                   
familiar  with the  particular  area of  law. She  understood                                                                   
from  other  statutes  that the  legislature  empowered  some                                                                   
unincorporated  communities   to  accept  grant   funds.  She                                                                   
indicated that the  major concern behind the  legislation was                                                                   
to ensure  a responsible  entity existed  to account  for the                                                                   
VSW funds. The  solution consisted of a statute  that defined                                                                   
the  entity and  conformed to  the  Equal Protection  Clause.                                                                   
Representative  Costello expressed  concerns with having  two                                                                   
different  meanings for unincorporated  community defined  in                                                                   
statute. She thought that problems would arise.                                                                                 
                                                                                                                                
Vice-chair Fairclough  asked whether the  definition included                                                                   
in the  CS was  specific  to VSW or  if it  related to  other                                                                   
portions  of   the  law.  Ms.   Wolter  confirmed   that  the                                                                   
definition of village only related to VSW.                                                                                      
                                                                                                                                
Co-Chair  Thomas   related  from  personal   experience  that                                                                   
tribal  governments  waived  their sovereignty  in  order  to                                                                   
accept  funds  from  the  state,  including  VSW.  Vice-chair                                                                   
Fairclough  wondered  whether that  was  a question  for  the                                                                   
Department of Law.                                                                                                              
                                                                                                                                
9:48:10 AM                                                                                                                    
                                                                                                                                
Ms.   Wolter  was   unable  to   confirm  Co-Chair   Thomas's                                                                   
statement.  She stated  she was  new to the  program and  did                                                                   
not have further information.                                                                                                   
                                                                                                                                
Mr.  Griffith confirmed  that  Co-Chair  Thomas was  correct.                                                                   
Tribal  governments  were  required   to  sign  a  waiver  of                                                                   
sovereign immunity to receive VSW funds.                                                                                        
                                                                                                                                
Representative  Guttenberg referred  to Mr. Griffith's  email                                                                   
(copy on file)  to Sheila Peterson. He noticed  the inclusion                                                                   
of unincorporated  communities inside of larger  boroughs. He                                                                   
asked  whether that  was an  issue. He  wanted to  understand                                                                   
how  VSW defined  unincorporated  communities.  Mr.  Griffith                                                                   
identified  that  over  100 communities  in  the  state  were                                                                   
unincorporated  and had  no  tribal government  or  governing                                                                   
body. Some were  located within a borough and  some were not.                                                                   
The program  learned of  their existence  when the  community                                                                   
contacted  VSW to  request funding.  He  was often  uncertain                                                                   
what type of  governing organization, if any,  existed in the                                                                   
communities.                                                                                                                    
                                                                                                                                
Representative  Gara wondered  whether the  VSW was the  only                                                                   
funding mechanism  available for communities that  were using                                                                   
outhouses and honey  buckets. Mr. Griffith answered  that the                                                                   
VSW  was the  primary program  that  funded most  communities                                                                   
waste  water  improvements.  Municipal  matching  grants  and                                                                   
loans  to  larger  communities   and  occasional  legislative                                                                   
grants from  Department of  Commerce, Community and  Economic                                                                   
Development  (DCCEC)   were  available.  He  added   that  no                                                                   
established  program existed  to administer  the DCCED  grant                                                                   
funds.                                                                                                                          
                                                                                                                                
Representative Gara  asked how many communities  in the state                                                                   
did not  have sewer systems.  Mr. Griffith acknowledged  that                                                                   
there were  roughly 40  communities where  more than  half of                                                                   
the  homes   were  without  running   water  and   sewer.  He                                                                   
mentioned that VSW  had ongoing projects to  provide services                                                                   
in half of the communities.                                                                                                     
                                                                                                                                
Representative  Gara  related  that his  only  concern  about                                                                   
expanding  the program  was that  the  communities with  more                                                                   
serious   problems   had  to   compete   against   additional                                                                   
communities  for the same  pot of money.  He wondered  if VSW                                                                   
would prioritize  communities with the most  severe problems.                                                                   
Mr. Griffith replied  that VSW used a prioritization  process                                                                   
and  scoring criteria  to establish  legislative funding  for                                                                   
the  program. The  criteria determined  need primarily  based                                                                   
on the health  impacts of the community.  Communities without                                                                   
running water or sewer were prioritized higher.                                                                                 
                                                                                                                                
9:54:01 AM                                                                                                                    
                                                                                                                                
Representative  Gara deduced  that  the  communities most  in                                                                   
need would  still get priority  under the bill.  Mr. Griffith                                                                   
thought   that  was  a   fair  assumption.   He  added   that                                                                   
occasionally  VSW funds  projects  that were  not first  time                                                                   
water and  sewer. Other  criteria were  also considered  such                                                                   
as the ability to operate and maintain existing services.                                                                       
                                                                                                                                
Representative   Neuman  inquired   about   the  meaning   of                                                                   
"governing body."  He mentioned the Legal Services  Memo from                                                                   
the Division  of Legal  and Research  Services (4/6/11  Cook)                                                                   
(copy  on file).  He  referenced  the community  of  Settlers                                                                   
Bay, located  in the Mat-Su  borough, governed by  a covenant                                                                   
board. He  wondered whether a  subdivision would  qualify for                                                                   
the VSW program.  Ms. Wolter reminded the committee  that the                                                                   
Department  of Law  (DOL) did  not write  the legal  opinion.                                                                   
She  discussed the  legal opinion  with  DEC and  ascertained                                                                   
that city councils  were not unincorporated  communities. She                                                                   
believed  that the  legal services  definition of  "governing                                                                   
body" needed revision.                                                                                                          
                                                                                                                                
9:58:18 AM                                                                                                                    
                                                                                                                                
Representative Doogan WITHDREW his objection.                                                                                   
                                                                                                                                
The CS Work Draft HB 183 27-LS0601/I was ADOPTED.                                                                               
                                                                                                                                
Vice-chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
JASON MAYRAND,  MAYOR OF  NENANA (via teleconference),  spoke                                                                   
in  favor of  expanding  the definition  of  "home rule."  He                                                                   
expressed  concerns  that  Nenana   was  precluded  from  VSW                                                                   
funding  as  a home  rule  municipality.  He noted  that  the                                                                   
"home  rule"  definition  escaped  statute.  The  legislation                                                                   
attempted  to   remedy  the  situation.  He   explained  that                                                                   
Nenana's  original sewer  and water system  was installed  in                                                                   
the 1970's  by Public Health  Services (PHS). In  the 1990's,                                                                   
a  sewer and  water expansion  project  was constructed.  The                                                                   
project was  funded by a DEC  matching grant. The  match cost                                                                   
the community  $400 thousand.  Four years ago,  the community                                                                   
researched eligibility  and applied  for the VSW  grant which                                                                   
provided 100 percent  funding. He elaborated that  Nenana was                                                                   
working  to rehabilitate  their water and  sewer system.  The                                                                   
piping    experienced    frequent   cracks    and    required                                                                   
replacement.  The PVC  had  a tendency  to  crack and  fixing                                                                   
leaks underground  was expensive  and time consuming.  Nenana                                                                   
was  awarded VSW  design and  construction  funds. The  grant                                                                   
was  subsequently revoked  and the  only option  to fund  the                                                                   
project  was a  capital  appropriation.  The community  could                                                                   
not repay the  exorbitant cost ($1 million to  $2 million) in                                                                   
loans  needed to  replace  the  failing system.  He  stressed                                                                   
that the  community competently  operated and maintained  the                                                                   
existing system. He urged passage of the legislation.                                                                           
                                                                                                                                
Vice-chair Fairclough  asked whether he had  heard discussion                                                                   
on the  CS. She  invited the  mayor to  share his opinion  on                                                                   
the CS.  Mr. Mayrand  referred to CSHB  183 (CRA)  Section 1,                                                                   
line 2  that listed  the definition of  village as  listed in                                                                   
statute 43  U.S.C. 1610 or  1615 and deleted  "unincorporated                                                                   
community."  He  offered  that  the  CS  should  include  the                                                                   
statue and leave in "unincorporated community."                                                                                 
                                                                                                                                
Representative    Edgmon   concurred    with   the    mayor's                                                                   
suggestion.  He wondered  whether  that  idea was  discussed.                                                                   
Ms.  Peterson  replied  that   the  concern  with  the  ANCSA                                                                   
definition was twofold.  The ANCSA definition did  not ensure                                                                   
a   governing   body.   The   Department   of   Environmental                                                                   
Conservation  strongly urged  inclusion of  a governing  body                                                                   
to ensure accountability.  The second concern was  related to                                                                   
conformity with  the Equal Protection Act. She  solicited the                                                                   
legal  memo   to  determine  the  constitutionality   of  the                                                                   
definition.  Legal Services  suggested  the definition  focus                                                                   
on a governing  body as opposed  to Native status.  The ANCSA                                                                   
definition was  removed. She noted  that DEC worked  with DOL                                                                   
to develop the language in the current CS.                                                                                      
                                                                                                                                
10:06:32 AM                                                                                                                   
                                                                                                                                
Representative  Edgmon discussed  the  legal opinion  related                                                                   
to the Equal  Protection Clause. He wondered  about including                                                                   
Indian  Reorganization  Act (IRA)  and village  councils.  He                                                                   
identified that  federal tribal  dollars were available  that                                                                   
could  enhance VSW  grants. Vice-chair  Fairclough  requested                                                                   
the information at a later meeting.                                                                                             
                                                                                                                                
Representative Gara  asked if DEC led Nenana  to believe that                                                                   
they  qualified  for  funding.  Mr. Mayrand  replied  in  the                                                                   
affirmative. He detailed  that in addition to  the VSW design                                                                   
grant,  DEC awarded  Nenana construction  funds  appropriated                                                                   
by the legislature  in 2008. Representative Gara  opined that                                                                   
if  the   legislation  was  not   passed  this   session  the                                                                   
legislature   should  appropriate   capital  funds   for  the                                                                   
project  on moral  grounds.  He  believed the  situation  was                                                                   
wrong.                                                                                                                          
                                                                                                                                
Vice-chair  Fairclough asked if  Nenana incurred  outstanding                                                                   
costs due  to the  rescinded funding.  Mr. Mayrand  explained                                                                   
that the  city was  permitted to  retain the design  funding;                                                                   
only  the  construction  funds   were  withdrawn.  Vice-chair                                                                   
Fairclough asked  for the  project's construction  costs. Mr.                                                                   
Mayrand responded  that the total cost was  estimated at $9.5                                                                   
million over a period of 5 to 6 years.                                                                                          
                                                                                                                                
Representative  Gara asked  if the  city was  "out-of-pocket"                                                                   
for costs associated  with the project. Mr.  Mayrand answered                                                                   
in the negative.                                                                                                                
                                                                                                                                
10:11:11 AM                                                                                                                   
                                                                                                                                
Vice-chair Fairclough CLOSED public testimony.                                                                                  
                                                                                                                                
HB  183  was   HEARD  and  HELD  in  committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
HOUSE BILL NO. 89                                                                                                             
                                                                                                                                
     "An   Act  authorizing  the   commissioner  of   natural                                                                   
     resources  to offer  bedload material  for disposal  for                                                                   
     flood control  purposes in exchange for a  percentage of                                                                   
     the profit from the sale of that material."                                                                                
                                                                                                                                
10:12:02 AM                                                                                                                   
                                                                                                                                
REPRESENTATIVE   PAUL   SEATON,    SPONSOR,   explained   the                                                                   
legislation.  He related that  the legislation authorized  an                                                                   
alternative  sale mechanism  for  certain  gravel, sand,  and                                                                   
rock associated  with flood plain problems or  disasters. The                                                                   
alternative  sale must  proceed in conjunction  with  a flood                                                                   
mitigation  plan. He  pointed  out that  the most  persistent                                                                   
problem was  the outflow of  river gravel and  sediments that                                                                   
built  up in  streambeds and  caused  overflow. The  overflow                                                                   
tended to  accumulate and  rechanneled  the river. The  water                                                                   
travelled  through  people's properties  causing  damage.  He                                                                   
expounded  that  current  law required  bedload  material  to                                                                   
sell  at  fair  market value.  The  legislation  allowed  the                                                                   
commissioner  of the  Department of  Natural Resources  (DNR)                                                                   
to consider  mitigation  of state disaster  expenses as  part                                                                   
of the fair  market value. The percent of  profit calculation                                                                   
was set  at a minimum of  12.5 percent. The material  was not                                                                   
a good  quality gravel  source  and not as  desirable on  the                                                                   
commercial   market.  The  bill   incentivized  removal   for                                                                   
commercial operators;  and enabled  the export of  the gravel                                                                   
from the problem  area. The gravel extractor  was required to                                                                   
have  an   extraction  plan   certified  by  a   professional                                                                   
engineer.                                                                                                                       
                                                                                                                                
10:16:10 AM                                                                                                                   
                                                                                                                                
Representative  Seaton  furthered   that  the  Department  of                                                                   
Transportation  and Public  Facilities  (DOT)  and DNR  would                                                                   
review the  plan for approval.  The review would  ensure safe                                                                   
material  extraction.  The idea  of  the legislation  was  to                                                                   
reduce a hazard  by encouraging safe elimination  of sediment                                                                   
buildup.  He recapped that  the bill  allowed an  alternative                                                                   
mechanism  for  valuing  extracted  gravel.  The  state  will                                                                   
still  receive  value  for  the   bedload  material  but  may                                                                   
consider the value removal offered for disaster mitigation.                                                                     
                                                                                                                                
Co-Chair  Thomas   supported  the  legislation.   He  favored                                                                   
allowing a  private entity  to remove  the gravel instead  of                                                                   
the  state.  He  discussed his  experience  with  gravel  and                                                                   
river  shifting.   He  asked  whether  salmon   streams  were                                                                   
protected.   Representative    Seaton   assured    that   the                                                                   
legislation  would not  preclude any Department  of Fish  and                                                                   
Game (DFG) or DEC processes and permitting.                                                                                     
                                                                                                                                
Representative  Neuman  inquired  about  the  destruction  of                                                                   
spawning  beds.   He  wanted  assurance  that   the  involved                                                                   
agencies  supported  the legislation.  Representative  Seaton                                                                   
repeated that  all permits  would remain  in place  under the                                                                   
legislation.   He  noted   that  the   state  was   currently                                                                   
authorized  to sell  bedload material.  The sale  based on  a                                                                   
gross  up-front  per  yard  fee   was  cost  prohibitive  for                                                                   
commercial operators.  The bill allowed the  alternative sale                                                                   
of bedload material at 12.5 percent of the profit.                                                                              
                                                                                                                                
10:20:29 AM                                                                                                                   
                                                                                                                                
Vice-chair Fairclough OPENED public testimony.                                                                                  
                                                                                                                                
Representative  Gara queried  whether the  bill would  reduce                                                                   
any  standards that  were required  to protect  habitat in  a                                                                   
fish stream.                                                                                                                    
                                                                                                                                
MARTY  PARSONS, DEPUTY  DIRECTOR,  DIVISION  OF MINING,  LAND                                                                   
AND   WATER,    DEPARTMENT   OF   NATURAL    RESOURCES   (via                                                                   
teleconference),responded  in the negative. He  reassured the                                                                   
committee  that  the  legislation  does not  reduce  any  DFG                                                                   
requirements.                                                                                                                   
                                                                                                                                
LARRY  DEVILBISS,  MAYOR,  MAT-SU BOROUGH,  voiced  that  the                                                                   
borough   supported   the  legislation.   He   believed   the                                                                   
legislation   would  help   mitigate   the  borough's   flood                                                                   
problems.                                                                                                                       
                                                                                                                                
Vice-chair Fairclough CLOSED public testimony.                                                                                  
                                                                                                                                
Representative  Guttenberg asked  about the cost  calculation                                                                   
for  extraction.  He  wondered  whether  the  extraction  was                                                                   
contracted  with  standard  calculations   or  site  specific                                                                   
calculated  costs.  Representative  Seaton replied  that  the                                                                   
sale calculations  were site specific. The bill  related very                                                                   
specifically  to  bedload  material extracted  due  to  flood                                                                   
mitigation.  Representative Guttenberg  related a problem  in                                                                   
his district that  led to competition between  two commercial                                                                   
entities  extracting  gravel.   The  business  that  operated                                                                   
under state  permits extracted gravel at  significantly lower                                                                   
costs than the private entity.                                                                                                  
                                                                                                                                
Vice-chair  Fairclough  asked whether  the  bedload sale  was                                                                   
competitive.   Representative   Seaton  replied   that   both                                                                   
competitive  and  non-competitive  sales were  allowed  under                                                                   
current law.                                                                                                                    
                                                                                                                                
10:26:08 AM                                                                                                                   
                                                                                                                                
Co-Chair Stoltze  did not  believe the legislation  presented                                                                   
a loss of  revenue for the state.  He thought that  HB 89 was                                                                   
a  win-win  situation.  The  legislation  provided  important                                                                   
flood mitigation and incentives for private operators.                                                                          
                                                                                                                                
Co-Chair  Stoltze  MOVED to  report  CS HB  89  (RES) out  of                                                                   
committee   with    individual   recommendations    and   the                                                                   
accompanying new fiscal notes.                                                                                                  
                                                                                                                                
CS  HB 89  (RES) was  REPORTED out  of committee  with a  "do                                                                   
pass"  recommendation  and with  one new  indeterminate  note                                                                   
from   the  Department   of   Transportation   and  one   new                                                                   
indeterminate   note   from   the   Department   of   Natural                                                                   
Resources.                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 103                                                                                                            
                                                                                                                                
     "An  Act  relating  to  the   procurement  of  supplies,                                                                   
     services,  professional services,  and construction  for                                                                   
     the  Alaska Energy  Authority;  establishing the  Alaska                                                                   
     Railbelt   energy  fund  and   relating  to   the  fund;                                                                   
     relating  to and  repealing  the Railbelt  energy  fund;                                                                   
     relating  to  the quorum  of  the  board of  the  Alaska                                                                   
     Energy Authority;  relating to the powers  of the Alaska                                                                   
     Energy  Authority regarding  employees and the  transfer                                                                   
     of   certain   employees   of  the   Alaska   Industrial                                                                   
     Development  Export  Authority   to  the  Alaska  Energy                                                                   
     Authority;   relating  to   acquiring  or   constructing                                                                   
     certain  projects   by  the  Alaska   Energy  Authority;                                                                   
     relating  to the  definition of  'feasibility study'  in                                                                   
     the Alaska  Energy Authority  Act; and providing  for an                                                                   
     effective date."                                                                                                           
                                                                                                                                
HB 103 was SCHEDULED but not HEARD.                                                                                             
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:28 AM.                                                                                          
                                                                                                                                
10:28:35 AM                                                                                                                   
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
HB103-FERC Public Processes.pdf HFIN 4/12/2011 8:30:00 AM
HB 103
SB 102 Eplanation of Benefits.docx HFIN 4/12/2011 8:30:00 AM
SB 102
SB 102 Sponsor Statement.docx HFIN 4/12/2011 8:30:00 AM
SB 102
HJR 4 Legal opinion aviation fuel tax.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR 4 ltr support businesses.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR 4 Ltr support Sorenson.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR 4 supporters.docx HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR4 - Sponsor Stmt Ver D.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR4 ATIF Payout 6.0.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR 4 ltr support Harbormasters.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR4 support ltr Mobility coalition.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
HJR4 Support Miners 1-2011.pdf HFIN 4/12/2011 8:30:00 AM
HJR 4
CSHB 183 (CRA) Sponsor Statement.pdf HFIN 4/12/2011 8:30:00 AM
HB 183
ANCSA Reference.pdf HFIN 4/12/2011 8:30:00 AM
SFIN 4/17/2011 10:00:00 AM
HB 183
HB 183 CS WORK DRAFT 041111.pdf HFIN 4/12/2011 8:30:00 AM
HB 183
Impact of Proposed CSHB 183 ( ).pdf HFIN 4/12/2011 8:30:00 AM
SFIN 4/17/2011 10:00:00 AM
HB 183
Nenana Letter.pdf HFIN 4/12/2011 8:30:00 AM
HB 183
CS HB 183 ( ) Changes for FIN.pdf HFIN 4/12/2011 8:30:00 AM
SFIN 4/17/2011 10:00:00 AM
HB 183
HB 183 Legal Memo.pdf HFIN 4/12/2011 8:30:00 AM
SFIN 4/17/2011 10:00:00 AM
HB 183
HB 106CS(RES)-NEW DEC-WQ-04-12-11.pdf HFIN 4/12/2011 8:30:00 AM
HB 106