Legislature(2011 - 2012)HOUSE FINANCE 519

04/05/2012 01:30 PM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
-- Delayed to 2:40 pm Today --
+= HB 286 G.O. BONDS FOR PORTS TELECONFERENCED
<Bill Hearing Postponed>
+ Bills Previously Heard/Scheduled TELECONFERENCED
+= HB 290 ESTABLISH ENDOW ALASKA GRANT PROGRAM TELECONFERENCED
Moved CSHB 290(FIN) Out of Committee
+= HB 312 NATURAL GAS CONVERSION PROGRAM/FUND TELECONFERENCED
Moved CSHB 312(FIN) Out of Committee
<Bill Held Over from 4/4/12>
+= HB 365 AQUATIC INVASIVE SPECIES TELECONFERENCED
Moved CSHB 365(FIN) Out of Committee
                  HOUSE FINANCE COMMITTEE                                                                                       
                       April 5, 2012                                                                                            
                         2:40 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
2:40:46 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stoltze  called the House Finance  Committee meeting                                                                   
to order at 2:40 p.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Representative Bill Stoltze, Co-Chair                                                                                           
Representative Bill Thomas Jr., Co-Chair                                                                                        
Representative Anna Fairclough, Vice-Chair                                                                                      
Representative Mia Costello                                                                                                     
Representative Mike Doogan                                                                                                      
Representative Bryce Edgmon                                                                                                     
Representative Les Gara                                                                                                         
Representative David Guttenberg                                                                                                 
Representative Reggie Joule                                                                                                     
Representative Tammie Wilson                                                                                                    
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
Representative Mark Neuman                                                                                                      
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Erin    Harrington,    Staff,    Representative    Austerman;                                                                   
Representative   Alan Austerman, Sponsor; Joe  Michel, Staff,                                                                   
Representative  Bill  Stoltze;  Representative  Paul  Seaton,                                                                   
Sponsor;  Ben  Mulligan,  Special  Assistant,  Department  of                                                                   
Fish  and  Game;  Joe  Michel,   Staff,  Representative  Bill                                                                   
Stoltze;  John  Anderson,  Weatherization   Project  Officer,                                                                   
Research  and  Rural  Development,   Alaska  Housing  Finance                                                                   
Corporation, Department of Revenue.                                                                                             
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 290    ESTABLISH ENDOW ALASKA GRANT PROGRAM                                                                                  
                                                                                                                                
          CSHB 90(FIN) was REPORTED out of Committee with a                                                                     
          "do pass" recommendation and with one new zero                                                                        
          fiscal  note  from   the  Department  of  Commerce,                                                                   
          Community and Economic Development.                                                                                   
                                                                                                                                
HB 312    NATURAL GAS CONVERSION PROGRAM/FUND                                                                                   
                                                                                                                                
          CSHB  312(FIN) was REPORTED  out of Committee  with                                                                   
          a   "do   pass"   recommendation   and   previously                                                                   
          published indeterminate fiscal note: FN1 (DOR).                                                                       
                                                                                                                                
HB 365    AQUATIC INVASIVE SPECIES                                                                                              
                                                                                                                                
          CSHB  365(FIN) was REPORTED  out of committee  with                                                                   
          a  "do  pass"  recommendation   and  with  two  new                                                                   
          fiscal  impact notes  from the  Department of  Fish                                                                   
          and  Game and the  Department of Natural  Resources                                                                   
          and  previously published  zero  fiscal notes:  FN1                                                                   
          (DEC), FN2 (DEC), FN3 (DHSS).                                                                                         
                                                                                                                                
2:42:40 PM                                                                                                                    
                                                                                                                                
HOUSE BILL NO. 290                                                                                                            
                                                                                                                                
     "An Act creating the endow Alaska grant program in the                                                                     
     Department of Commerce, Community, and Economic                                                                            
     Development to encourage community development."                                                                           
                                                                                                                                
Vice-chair  Fairclough  MOVED  to  ADOPT  proposed  committee                                                                   
substitute    for   HB    290,    Work   Draft    27-LS1094\R                                                                   
(Mischel/Kirsch, 4/3/12).                                                                                                       
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
ERIN HARRINGTON,  STAFF, REPRESENTATIVE AUSTERMAN,  explained                                                                   
the changes  in the committee  substitute (CS).  She observed                                                                   
that  alterations were  made after  feedback  from the  House                                                                   
Finance  Committee  during  the 3/29/12  hearing.  She  noted                                                                   
that Representative  Edgmon had  raised a question  regarding                                                                   
the possible  ambiguity of the term "community  development."                                                                   
The  CS  addressed the  concern  by  replacing  "development"                                                                   
with "philanthropy" on Page 1, lines 2, 6 and 8.                                                                                
                                                                                                                                
Ms. Harrington  spoke to a  concern by Representative  Doogan                                                                   
and  Vice-chair Fairclough  that the  order of  the items  in                                                                   
the  legislation  could  be  perceived  as  a  "ranking".  To                                                                   
address   the  concern,   "ranking"   was  substituted   with                                                                   
"evaluating" on Page 2, line 10 and 11.                                                                                         
                                                                                                                                
Ms.   Harrington    recalled   discussions    regarding   the                                                                   
restrictiveness  of  the  list. Consideration  was  given  to                                                                   
changing  "may" to  "shall" on  page 2, line  11. The  change                                                                   
was  not  made  due  to  constitutional  issues,  which  took                                                                   
control away  from the  legislature and  transferred it  to a                                                                   
third party.                                                                                                                    
                                                                                                                                
Ms. Harrington  observed  that on Page  3, lines  8 and  9, a                                                                   
new  subsection (3)  was  added to  AS  44.33.180 that  read:                                                                   
"state general  funds may not  be used as the  matching funds                                                                   
for  this program."  The  new section  was  added to  clarify                                                                   
that a community  could not use state funds as  its match for                                                                   
a project.                                                                                                                      
                                                                                                                                
Co-Chair  Stoltze  WITHDREW  his OBJECTION.  There  being  NO                                                                   
further OBJECTION, Work Draft 27-KS1094\R was ADOPTED.                                                                          
                                                                                                                                
2:45:17 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE   ALAN   AUSTERMAN,   SPONSOR,   thanked   the                                                                   
committee.                                                                                                                      
                                                                                                                                
Vice-chair Fairclough  reviewed the new zero fiscal  note for                                                                   
the   Department   of  Commerce,   Community   and   Economic                                                                   
Development.                                                                                                                    
                                                                                                                                
Vice-chair Fairclough  MOVED to report CSHB 290  (FIN) out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Co-Chair  Stoltze  OBJECTED  for purpose  of  discussion.  He                                                                   
noted  philosophical  hesitations regarding  the  legislation                                                                   
but  allowed the  bill to  move from  committee. He  WITHDREW                                                                   
his OBJECTION.                                                                                                                  
                                                                                                                                
There  being   NO  further   OBJECTION,  CSHB  290(FIN)   was                                                                   
REPORTED  out of committee  with a  "do pass"  recommendation                                                                   
and with  one new  zero fiscal  note from  the Department  of                                                                   
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
2:47:02 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
2:50:08                                                                                                                       
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 365                                                                                                            
                                                                                                                                
     "An Act relating  to the rapid response  to, and control                                                                   
     of, aquatic invasive species."                                                                                             
                                                                                                                                
Vice-chair  Fairclough  MOVED  to  ADOPT  proposed  committee                                                                   
substitute  for  HB 365,  Work  Draft  27-LS1439\B  (Bullard,                                                                   
4/5/12).                                                                                                                        
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
JOE  MICHEL, STAFF,  REPRESENTATIVE  BILL STOLTZE,  explained                                                                   
the  changes  included  in  the CS.  The  word  "marine"  was                                                                   
removed  from "marine  aquatic  invasive species"  throughout                                                                   
the legislation.                                                                                                                
                                                                                                                                
Mr.  Michel observed  that the  committee substitute  removed                                                                   
the language in section (f) CSHB 365(RES):                                                                                      
                                                                                                                                
     In  this  section,  "marine  aquatic  invasive  species"                                                                   
     means an  organism introduced  to a marine  ecosystem to                                                                   
     which it  is not native  and whose introduction  causes,                                                                   
     or is  likely to cause,  economic or environmental  harm                                                                   
     or harm to human health."                                                                                                  
                                                                                                                                
Mr. Michel  explained that  the above  language was  replaced                                                                   
with the original section (f) as contained in HB 365:                                                                           
                                                                                                                                
     (f)  In  this section, "aquatic invasive  species" means                                                                   
     an  organism  introduced   to  a  marine  or  freshwater                                                                   
     ecosystem   to  which  it   is  not  native   and  whose                                                                   
     introduction  causes, or  is likely  to cause,  economic                                                                   
     or environmental harm or harm to human health.                                                                             
                                                                                                                                
Mr. Michel noted  that the committee substitute  also added a                                                                   
new section G:                                                                                                                  
                                                                                                                                
     In  this section,  "aquatic invasive  species" means  an                                                                   
     organism   introduced   to   a  marine   or   freshwater                                                                   
     ecosystem   to  which  it   is  not  native   and  whose                                                                   
     introduction  causes, or  is likely  to cause,  economic                                                                   
     or environmental harm or harm to human health.                                                                             
                                                                                                                                
Mr.  Michel   clarified  that   the  changes  were   made  in                                                                   
consultation with the Department of Fish and Game.                                                                              
                                                                                                                                
Co-Chair  Stoltze  WITHDREW  his OBJECTION.  There  being  NO                                                                   
further OBJECTION, Work Draft 27-LS1439\B was ADOPTED.                                                                          
                                                                                                                                
REPRESENTATIVE  PAUL SEATON,  SPONSOR,  spoke  in support  of                                                                   
the  legislation  and observed  that  HB 365  provided  rapid                                                                   
response  to prevent  infestations of  invasive species  from                                                                   
spreading. The  bill allowed  the department to  aggressively                                                                   
target new invasive species.                                                                                                    
                                                                                                                                
2:53:27 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stoltze  expressed   the  committee's  support  for                                                                   
expansion of the legislation reflected in the CS.                                                                               
                                                                                                                                
BEN  MULLIGAN,  SPECIAL  ASSISTANT, DEPARTMENT  OF  FISH  AND                                                                   
GAME,   explained  that   the   inclusion   of  fresh   water                                                                   
ecosystems  would not  diminish the  department's ability  to                                                                   
perform marine ecosystem mitigation.                                                                                            
                                                                                                                                
Representative  Gara asked for  a letter from  the Department                                                                   
of  Fish and  Game (DFG)  to address  his  concern. He  cited                                                                   
Page 2, Subsection (f) of the CS:                                                                                               
                                                                                                                                
      (f)  In responding  under (b)  of this  section to  the                                                                   
     occurrence of  freshwater aquatic invasive  species, the                                                                   
     department  shall  respond  in a  manner  determined  to                                                                   
     cause  the  least  harm  to  noninvasive  resident  fish                                                                   
     populations  in  that  limited  or  isolated  geographic                                                                   
     area  that  are  used for  recreational,  personal  use,                                                                   
     commercial, or subsistence purposes.                                                                                       
                                                                                                                                
Representative  Gara worried  that  the language  "compelled"                                                                   
the  department's use  of chemical  eradication  even if  the                                                                   
harm outweighed  the benefit. Mr. Mulligan observed  that the                                                                   
section of the  bill that related to the response  plan [Page                                                                   
1, Subsection  (b)] used  the word  "may." He concluded  that                                                                   
the  department  was  not forced  into  using  chemicals.  He                                                                   
indicated  that Subsection  (f)  directed  the department  to                                                                   
consider the  appropriate response. He exemplified  Alexander                                                                   
Creek;  a   location  DFG   was  currently  performing   Pike                                                                   
eradication.  In an effort  to rebound  the resident  Chinook                                                                   
and  Coho  salmon population  the  department  employed  non-                                                                   
chemical methods to eradicate the Pike.                                                                                         
                                                                                                                                
Representative   Gara   understood    the   intent   of   the                                                                   
legislation but  wanted assurances that the  department would                                                                   
not feel "compelled" to employ chemical measures.                                                                               
Representative  Joule thought that  the language  allowed the                                                                   
department to "scale back" use.                                                                                                 
                                                                                                                                
Representative Seaton  clarified that Subsection  (f) related                                                                   
only to  fresh water aquatic  invasive species. He  noted the                                                                   
language directed  DFG to employ the method  that caused "the                                                                   
least amount of harm." He cited Subsection (d):                                                                                 
                                                                                                                                
      (d) Rapid  response to,  and management of,  an aquatic                                                                   
     invasive  species in  a limited  or isolated  geographic                                                                   
     area under  (b) of this section shall be  given priority                                                                   
     over  activities  regulated by  the  department in  that                                                                   
     limited or isolated geographic area.                                                                                       
                                                                                                                                
Representative Seaton  further clarified that  Subsection (d)                                                                   
granted  rapid response  of invasive  species  a priority  in                                                                   
marine   or    freshwater   ecosystems.   He    stated   that                                                                   
establishing the priority was the intent of the CS.                                                                             
                                                                                                                                
2:57:57 PM                                                                                                                    
                                                                                                                                
Co-Chair Thomas  asked whether  the use  of felt waders  were                                                                   
prohibited.  Mr.  Mulligan  affirmed and  reported  that  the                                                                   
prohibition was  in response to concerns of  whirling disease                                                                   
migrating  to Alaska. He  added that  the department  engaged                                                                   
in outreach to notify the public.                                                                                               
                                                                                                                                
Co-Chair  Stoltze MOVED  to ADOPT Amendment  1, sponsored  by                                                                   
all members of the House Finance Committee.                                                                                     
                                                                                                                                
     Amendment 1                                                                                                                
                                                                                                                                
     Page   1  line  8   delete  [in   limited  or   isolated                                                                   
     geographic  areas.]  Page  1  line  13  &14  delete  [in                                                                   
     limited or isolated  area] Page 2 line 3 &  4 delete [in                                                                   
     a limited or  isolated geographic area] Page  2 line 9 &                                                                   
     10  delete [in a  limited or  isolated geographic  area]                                                                   
     Page  2  line  17  delete  [in  a  limited  or  isolated                                                                   
     geographic area] Page 2 line 20 delete [resident]                                                                          
                                                                                                                                
Co-Chair Thomas OBJECTED for discussion.                                                                                        
                                                                                                                                
Mr. Mulligan  spoke to the  amendment. He explained  that the                                                                   
amendment  granted  the  department more  leeway  for  future                                                                   
planning.   After  discussions   with   DFG   staff  it   was                                                                   
determined  that  the  language  "in a  limited  or  isolated                                                                   
geographic  area" was  limiting.  Sometimes invasive  species                                                                   
such as  Pike, resided in drainages  or other types  of water                                                                   
bodies. In  developing a mitigation  plan elimination  of the                                                                   
language  allowed  the department  to  broaden  the scope  to                                                                   
include areas such  as drainages. Planning would  still occur                                                                   
in geographically isolated areas, e.g., lakes.                                                                                  
                                                                                                                                
Co-Chair  Stoltze  interjected   that  the  deletion  of  the                                                                   
language  kept  the possibilities  open  for  future  private                                                                   
foundation funding,  federal receipts,  and money  from other                                                                   
sources  that  the  department  might qualify  for  with  the                                                                   
broader definition.  Mr. Mulligan  affirmed. In addition,  he                                                                   
confirmed  with  the  attorney   general  that  DFG  and  the                                                                   
Department  of Natural  Resources  (DNR)  were held  harmless                                                                   
for  rapid response  occurrences  in mariculture  sites  with                                                                   
regard to the elimination of the language.                                                                                      
                                                                                                                                
Mr.  Mulligan  related   that  the  deletion  of   the  word,                                                                   
"resident"  in  Subsection  (f),  in amendment  1,  left  the                                                                   
phrase  "noninvasive fish  population."  The phrase  included                                                                   
the anadromous  fish population  e.g.,  salmon and  steelhead                                                                 
and broadened the provision.                                                                                                    
                                                                                                                                
Co-Chair  Thomas  WITHDREW  his  OBJECTION.  There  being  NO                                                                   
further OBJECTION, Amendment 1 was adopted.                                                                                     
                                                                                                                                
3:02:39 PM                                                                                                                    
                                                                                                                                
Representative   Seaton  reiterated   his  support   for  the                                                                   
amendment and the CS version of the legislation.                                                                                
                                                                                                                                
Vice-chair  Fairclough   discussed  the  fiscal   notes.  She                                                                   
observed  that there  were  two indeterminate  fiscal  notes.                                                                   
Co-Chair Stoltze  expressed support for supplemental  funding                                                                   
if necessary.  He wanted the  department to have  the ability                                                                   
to react to a crisis or avert a problem.                                                                                        
                                                                                                                                
Representative  Guttenberg  compared  the funding  to  forest                                                                   
fire fighting and  felt that indeterminate fiscal  notes were                                                                   
appropriate.                                                                                                                    
                                                                                                                                
Mr. Mulligan noted  that existing funds were  used along with                                                                   
outreach to  the federal government  (United States  Fish and                                                                   
Wildlife  Service,  $90,000)  for mitigation  of  a  previous                                                                   
outbreak of Dvex [tunicate Didemnum  vexillum]. Additionally,                                                                   
the department  requested $500,000  in the capital  budget to                                                                   
complete the Dvex eradication.                                                                                                  
                                                                                                                                
Vice-chair  Fairclough  noted  that there  were  five  fiscal                                                                   
notes:  three previously  published  zero  fiscal notes:  FN1                                                                   
(DEC),  FN2  (DEC), FN3  (DHSS)  and  two new  fiscal  impact                                                                   
notes from the  Department of Fish and Game in  the amount of                                                                   
$489.2 thousand  for FY 2013 and  $341.6 thousand in  FY 2014                                                                   
and  the Department  of Natural  Resources in  the amount  of                                                                   
$84.2 thousand for FY 2013 and indeterminate through 2018.                                                                      
                                                                                                                                
3:07:28 PM                                                                                                                    
                                                                                                                                
Mr. Mulligan observed  that the new DFG fiscal  note total of                                                                   
$830,800  saved  the state  money  compared to  the  original                                                                   
fiscal note costing $1.2 million.                                                                                               
                                                                                                                                
Representative Doogan  asked why the new DFG  sport fisheries                                                                   
fiscal note was  indeterminate in the out years  beginning in                                                                   
FY  2015.   Mr.  Mulligan  explained   that  the   out  years                                                                   
expenditures were  indeterminate due to the fact  that it was                                                                   
impossible  to predict  future occurrences  and the costs  to                                                                   
mitigate them.                                                                                                                  
                                                                                                                                
Representative Doogan  surmised that the fiscal  note funding                                                                   
set up the  development of the plan [Invasive  Species Action                                                                   
Plan]  and  did not  fund  a  response  to an  outbreak.  Mr.                                                                   
Mulligan affirmed the statement.                                                                                                
                                                                                                                                
Co-Chair  Thomas  MOVED  to  report   CSHB  365(FIN)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB  365(FIN)  was REPORTED  out  of  committee with  a  "do                                                                   
pass" recommendation  and  with two new  fiscal impact  notes                                                                   
from the  Department of Fish and  Game and the  Department of                                                                   
Natural  Resources  and  previously   published  zero  fiscal                                                                   
notes: FN1 (DEC), FN2 (DEC), FN3 (DHSS).                                                                                        
                                                                                                                                
3:10:13 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
3:11:36 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
HOUSE BILL NO. 312                                                                                                            
                                                                                                                                
     "An  Act  creating  a  low-interest   loan  program  for                                                                   
     homeowners  who  convert  their homes  to  natural  gas-                                                                   
     fired  heating;  and  creating   the  natural  gas  home                                                                   
     heating conversion loan fund."                                                                                             
                                                                                                                                
Vice-chair  Fairclough  MOVED  to  ADOPT  proposed  committee                                                                   
substitute  for  HB  312,  Work  Draft  27-LS1301\E  (Nauman,                                                                   
4/4/12).                                                                                                                        
                                                                                                                                
Co-Chair Stoltze OBJECTED for discussion.                                                                                       
                                                                                                                                
3:12:32 PM                                                                                                                    
                                                                                                                                
JOE  MICHEL, STAFF,  REPRESENTATIVE  BILL STOLTZE,  explained                                                                   
the changes included  in the CS. He remarked that  the CS was                                                                   
"structurally  different"  from   the  original  legislation.                                                                   
Additional  sections were  rolled into  Section 1. The  word,                                                                   
"inspection" replaced  "energy audit" throughout  the bill. A                                                                   
registered mechanical  contractor was authorized,  along with                                                                   
energy  raters  to perform  inspections.  All  references  to                                                                   
"loan fund"  were replaced  with "loan  program." On  Page 3,                                                                   
lines 3-4  were added:  "…shall be  deposited in the  general                                                                   
fund  and may  be  appropriated for  the  loan program  under                                                                   
this section or for any other public purpose."                                                                                  
                                                                                                                                
Representative Wilson  introduced the legislation  by reading                                                                   
the following:                                                                                                                  
                                                                                                                                
     HB  312   will  create  a  low-interest   loan  program,                                                                   
     administered by  the Alaska Housing  Finance Corporation                                                                   
     for  homeowners  who use  oil,  coal,  or wood  to  heat                                                                   
     their  homes  so they  can  convert  to a  natural  gas,                                                                   
     propane,  electric, biomass,  or  district heat  heating                                                                   
     appliance.                                                                                                                 
                                                                                                                                
     Originally,  HB 312  would  only provide  loans for  the                                                                   
     conversion  to a  natural  gas-fired heating  appliance.                                                                   
     However,  through  the  committee  process, HB  312  was                                                                   
     expanded  to include  propane,  biomass, electric  heat,                                                                   
     and  district heat.   The  committee  substitute for  HB                                                                   
     312   now  provides   for  a   statewide  approach   for                                                                   
     homeowners   to  convert  to   a  more  affordable   and                                                                   
     efficient  heating method.   Propane can be  utilized in                                                                   
     Alaska's rural  communities.   Biomass heat in  the form                                                                   
     of  pellets  is  growing  in  popularity  and  could  be                                                                   
     implemented   in  the  Rural   Interior  and   Southeast                                                                   
     portions  of the State.   Electric  heat has now  become                                                                   
     more affordable  in Kodiak and the Southeast  regions of                                                                   
     Alaska.     Finally,  district  heat  is   available  in                                                                   
     communities  that have combined  heat and power  plants,                                                                   
     such  as in  Fairbanks' downtown  coal  plant where  the                                                                   
     by-product  steam and  hot  water are  pumped through  a                                                                   
     pipe  system  providing   affordable  and  emission-free                                                                   
     heat to customers.                                                                                                         
                                                                                                                                
     My office  has worked  carefully with  AHFC to  create a                                                                   
     statewide program  offering loans up to $7,500,  at a 1%                                                                   
     interest rate for  a term of 10 years.   The loans would                                                                   
     only cover  the cost of  the heating appliance,  and not                                                                   
     the cost of  materials and installation.   Loans will be                                                                   
     offered to  qualified applicants who use  either heating                                                                   
     oil, coal,  or wood as their  primary heat source.   The                                                                   
     heat sources  which the homeowner  wishes to  convert to                                                                   
     must be readily  accessible for use. HB  312 requires an                                                                   
     inspection by  either an AHFC certified energy  rater or                                                                   
     a  registered mechanical  contractor,  who will  confirm                                                                   
     the heating  method the homeowner  uses, and  provide an                                                                   
     explanation   of  the  potential   energy  savings   the                                                                   
     homeowner  could see  if they  converted to  one of  the                                                                   
     options available through the program.                                                                                     
                                                                                                                                
     HB  312 will  have  additional benefits  to  communities                                                                   
     who   have  been   designated   by  the   EPA  to   have                                                                   
     unacceptable  air   quality  levels.     Currently,  the                                                                   
     Fairbanks  North  Star Borough  has  been designated  by                                                                   
     the  EPA as  a  PM 2.5  nonattainment  area.   The  low-                                                                   
     interest  loan program  created  by HB  312 would  allow                                                                   
     for  residents  of the  FNSB  to afford  conversions  to                                                                   
     cleaner,  more efficient heating  methods to  help abate                                                                   
     the high levels of particulates in our air.                                                                                
                                                                                                                                
Representative  Wilson spoke  to the  energy rebate  program.                                                                   
She noted  that the  energy rebate program  could be  used to                                                                   
recoup   costs   for   a  new   gas   fired   appliance   but                                                                   
reimbursement  was  dependent  on  a  weatherization  rating.                                                                   
Replacing doors,  windows, and enhancing  insulation recouped                                                                   
more costs  on the rating system  than a new  heating source.                                                                   
She pointed out  that the program provided loans  and was not                                                                   
a giveaway.                                                                                                                     
                                                                                                                                
Co-Chair Thomas  wondered whether the appliance  loan must be                                                                   
paid  before the  house  title could  be  transferred in  the                                                                   
case of a sale.                                                                                                                 
                                                                                                                                
3:17:34 PM                                                                                                                    
                                                                                                                                
Representative Wilson  assumed that the loan  applicant would                                                                   
repay the loan before the sale.                                                                                                 
                                                                                                                                
JOHN ANDERSON,  WEATHERIZATION PROJECT OFFICER,  RESEARCH AND                                                                   
RURAL  DEVELOPMENT,   ALASKA  HOUSING  FINANCE   CORPORATION,                                                                   
DEPARTMENT  OF REVENUE,  agreed that  the loan  would be  the                                                                   
responsibility of the applicant.                                                                                                
                                                                                                                                
Representative   Guttenberg   noted  that   the   legislation                                                                   
expanded  inspectors to  include  mechanical contractors.  He                                                                   
questioned   whether   there  were   sufficient   contractors                                                                   
capable to do  the work. Mr. Anderson affirmed  and clarified                                                                   
that  the  department   would  follow  the   same  regulatory                                                                   
process that  already qualify  the inspectors and  follow the                                                                   
regulations  in place  that  qualified  the state  mechanical                                                                   
administrator's license.                                                                                                        
                                                                                                                                
Vice-chair  Fairclough  noted the  indeterminate  FN 1  (DOR)                                                                   
fiscal note. She  wondered if the loan program  was funded or                                                                   
if the  legislation developed  the structure.  Representative                                                                   
Wilson  affirmed  that  money  for  the  loan  fund  was  not                                                                   
appropriated.  The legislation  set  up a  mechanism for  the                                                                   
loan fund.                                                                                                                      
                                                                                                                                
Vice-chair Fairclough  asked whether one percent  of the fund                                                                   
amount would  adequately cover the administrative  costs. Mr.                                                                   
Anderson  thought   that  one  percent  was   an  appropriate                                                                   
estimate.                                                                                                                       
                                                                                                                                
Vice-chair  Fairclough  wondered   how  many  homes  were  in                                                                   
Fairbanks  and  North  Pole.  Representative  Wilson  replied                                                                   
that  approximately  21,000  homes   qualified  as  a  single                                                                   
family home.                                                                                                                    
                                                                                                                                
Co-Chair Stoltze noted the need in the Mat-Su as well.                                                                          
                                                                                                                                
Representative  Doogan discerned  that  the program  provided                                                                   
zero interest  loans. Mr.  Anderson affirmed  and added  that                                                                   
the  one percent  interest  would go  back  into the  general                                                                   
fund.                                                                                                                           
                                                                                                                                
Co-Chair  Stoltze  WITHDREW  his OBJECTION.  There  being  NO                                                                   
further OBJECTION, Work Draft 27-LS1301\E was ADOPTED.                                                                          
                                                                                                                                
3:23:27 PM                                                                                                                    
                                                                                                                                
Co-Chair Stoltze OPENED public testimony.                                                                                       
                                                                                                                                
Co-Chair Stoltze CLOSED public testimony.                                                                                       
                                                                                                                                
Vice-chair Fairclough  MOVED to  report CSHB 312(FIN)  out of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  note. There  being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
                                                                                                                                
CSHB 312(FIN) was REPORTED out of Committee with a "do                                                                          
pass" recommendation and previously published indeterminate                                                                     
fiscal note: FN1 (DOR).                                                                                                         
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
3:25:35 PM                                                                                                                    
                                                                                                                                
The meeting was adjourned at 3:25 PM.                                                                                           

Document Name Date/Time Subjects
HB286 Port MacKenzieHFINapr5b2012.pdf HFIN 4/5/2012 1:30:00 PM
HB 286
CSHB_312_(FIN)_Sponsor_Statement.docx HFIN 4/5/2012 1:30:00 PM
HB 312
HB312 CS WORKDRAFT 27-LS1301-E.pdf HFIN 4/5/2012 1:30:00 PM
HB 312
HB 290 Changes from Version E to Version R.pdf HFIN 4/5/2012 1:30:00 PM
HB 290
HB290 CS WORKDRAFT 27-LS1094-R.pdf HFIN 4/5/2012 1:30:00 PM
HB 290
HB365 CS WORKDRAFT 27-LS1439-B.pdf HFIN 4/5/2012 1:30:00 PM
HB 365
HB365 AMENDMENT 1 NEW.pdf HFIN 4/5/2012 1:30:00 PM
HB 365