Legislature(2011 - 2012)HOUSE FINANCE 519
04/12/2011 08:30 AM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HJR4 | |
| SB102 | |
| HB183 | |
| HB89 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 102 | TELECONFERENCED | |
| + | HB 183 | TELECONFERENCED | |
| += | HB 103 | TELECONFERENCED | |
| + | HJR 4 | TELECONFERENCED | |
| + | HB 89 | TELECONFERENCED | |
| + | 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 |