Legislature(2013 - 2014)HOUSE FINANCE 519
02/19/2014 01:30 PM House FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB297 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SCR 3 | TELECONFERENCED | |
| *+ | HB 297 | TELECONFERENCED | |
| + | TELECONFERENCED |
HOUSE FINANCE COMMITTEE
February 19, 2014
1:37 p.m.
1:37:59 PM
CALL TO ORDER
Co-Chair Stoltze called the House Finance Committee meeting
to order at 1:37 p.m.
MEMBERS PRESENT
Representative Alan Austerman, Co-Chair
Representative Bill Stoltze, Co-Chair
Representative Mark Neuman, Vice-Chair
Representative Mia Costello
Representative Bryce Edgmon
Representative Les Gara
Representative David Guttenberg
Representative Lindsey Holmes
Representative Cathy Munoz
Representative Steve Thompson
Representative Tammie Wilson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Lance Pruitt; Robert Brean, Director,
Research and Rural Development; Dirk Craft, Staff,
Representative Pruitt.
PRESENT VIA TELECONFERENCE
John Anderson, Operations Officer, Alaska Housing Finance
Corporation, Anchorage.
SUMMARY
HB 297 HOME ENERGY RATING SYSTEM
HB 297 was HEARD and HELD in committee for
further consideration.
HOUSE BILL NO. 297
"An Act recognizing the Alaska Housing Finance
Corporation as the authorizing agency to approve home
energy rating systems for the state; and providing for
an effective date."
1:39:50 PM
REPRESENTATIVE LANCE PRUITT discussed HB 297, which
recognized the Alaska Housing Finance Corporation (AHFC) as
the state's home energy rating system authorizing agency
for the purpose of approving home energy rating systems in
Alaska. The bill's intent was to protect the investment
made by Alaska via AHFC in developing its own energy rating
system. He mentioned the popular rebate and weatherization
programs. He noted that AKWarm was the software used and
updated since 1996. The software and system was
specifically designed for Alaska and recognized by the
Alaska real estate and home loan industry. The system was
directly tied to AHFC programs related to rebates and
weatherization. He stressed that the legislation benefitted
the state and its citizens.
1:42:12 PM
Co-Chair Austerman asked about the third parties that were
attempting to identify themselves in the federal
legislation. He wished to better understand the efforts and
asked if the third parties operated outside of Alaska.
Representative Pruitt replied that the third parties
existed outside of Alaska, and he preferred that the
question be addressed by AHFC.
1:42:55 PM
Co-Chair Stoltze asked if AHFC could handle the project.
ROBERT BREAN, DIRECTOR, RESEARCH AND RURAL DEVELOPMENT,
testified that home energy rating systems were used
throughout the country. He explained that a new
organization tasked with coordinating the activities of the
various organizations was attempting to insert itself into
the federal budget to receive an allocation for home energy
ratings on behalf of all of the states. He stated that
Alaska took exception to the idea as the state was already
engaged in a similar process with the development of
AKWarm. The software was developed, purchased and
maintained with public funds. The software was free and
available to anyone in the 49 states. He stated that the
national private organization attempted to insert itself as
a national lab or university think-tank to receive funding
from the Department of Energy before the funds would become
available to the states. He opined that the relationship
should exist between the states and the federal government
prior to the involvement of third parties.
Mr. Brean believed that AKWarm was one of the best rating
systems in the nation as it was utilized in a harsh
climate. The Department of Energy acknowledged the high
quality of Alaska's rating system. The national system was
known as Residential Energy Network System (RESNET). He
pointed out that RESNET has positioned the organization to
review any rating systems in the Lower 48 for approval. He
noted that the state had submitted AKWarm for approval to
RESNET who denied the rating system for lack of cooling
loads. Alaska had very little use for cooling loads.
1:46:38 PM
Mr. Brean informed the committee that owner of RESNET was a
prior employee of the state of Alaska, who took the AKWarm
draft to the Lower 48 to establish a private business
model. The proposed legislation intended to review the
state's rating systems to determine whether they were
appropriate for the Alaskan climate. The AKWarm system
recognized data from five different regions across the
state.
Mr. Brean noted that the bill allowed Alaska Housing
Finance Corporation (AHFC) to compare other state's rating
systems to AKWarm. He believed that the issue was one of
states' rights and protection. The legislation was good
public policy to ensure that the Alaskan rating system was
appropriate for the unique climate.
1:49:07 PM
Co-Chair Stoltze noted that the finding section of the bill
was located in the body of subsection (h), which was
unusual. He noted that typical drafting would include a
finding section and then the substantive portion beginning
with "the corporation."
DIRK CRAFT, STAFF, REPRESENTATIVE PRUITT stated that his
consultation with Legislative Legal Services yielded the
recommendation for the bill's finding section.
Co-Chair Stoltze commented that the finding section would
not become part of the statute, which he deemed unusual.
1:50:13 PM
Representative Wilson noted that the software was available
to all at no cost. She asked if she could use the software
for her own home.
Mr. Brean stated that the product was a free product and
could be used as free public domain.
Representative Wilson asked if a private entity was
permitted to offer a rating service.
Mr. Brean replied that consumers had the ability to use any
software that they chose, however, AHFC could not finance a
home that did not meet the minimum building energy
efficiency standards measured by AKWarm. The legislation
proposed the analysis of other rating companies to ensure
it appropriate for climate, heating degree days and cost of
fuel. The bill would ensure that any rating system used in
the state was equivalent to AKWarm in determining the
performance of a consumer's home.
1:52:21 PM
Representative Wilson clarified that the bill served those
consumers interested in financing with AHFC, while an
alternative rating system would be appropriate with
financing from another lender.
Mr. Brean concurred and stated that the bill wished to
provide ease to the consumer. He provided history about the
buildings efficiency standards adopted by the state
requiring that homes meet efficiency standards prior to
loan approval by AHFC.
Representative Wilson wished to avoid government impeding
private business.
1:54:44 PM
Representative Gara asked if the legislation addressed the
one-to-five star rating system used by AHFC for their
weatherization programs.
Mr. Brean concurred, and added that another goal was to
ensure that an alternative rating system was at least as
robust as AKWarm.
Representative Gara asked about the allowances of other
rating systems.
Mr. Brean stated that the language approved other rating
systems in the state; other rating systems were not
prohibited. The free public domain software could be used
by private enterprise without a cost. Other rating systems
used in the Lower 48 required a percentage of rating for
the developer of the software.
1:56:27 PM
Representative Gara clarified that AHFC may authorize
alternative rating systems.
Mr. Brean concurred.
Representative Gara complimented AHFC on their
weatherization program. He asked if federal funding would
be jeopardized by the legislation.
Mr. Brean replied that federal funding would not be
jeopardized.
1:57:27 PM
Vice-Chair Neuman asked if the standards proposed in the
legislation were recognized by banking institutions.
Mr. Brean concurred; loans purchased from individual banks
in Alaska were required to meet a minimum building energy
efficiency standard.
Vice-Chair Neuman referred to his own home built to code
and inspected appropriately in 1996. He wondered if the
standards were applicable and recognized in 2014.
1:59:14 PM
Mr. Brean responded that Vice-Chair Neuman's house would be
grandfathered in at those standards. He mentioned the new
standard, but noted that older homes would be grandfathered
in via the process in which they were inspected. He noted
that the home energy rebate program would include a pre and
post rating provided by AKWarm to determine energy
efficiency performance.
Vice-Chair Neuman relayed that he was involved in the
process with AHFC and AKWarm. He inquired about the fund
specific to the home energy rebate program.
Mr. Brean replied that the residuals of the home energy
rebate program existed with the Department of Revenue and
AHFC drew down on the fund. Interest earned on the fund
promoted the program. He stated that 150-250 homes were in
the rebate process at any one time.
Vice-Chair Neuman asked if the legislation changed the
location of the fund.
Mr. Brean answered no.
2:01:14 PM
Representative Munoz asked if an older home might be
eligible for financing.
Mr. Brean noted that historical homes had certain
requirements. Older homes often required improvements.
Financing an older home was not his purview. He recommended
the mortgage operations portion of AHFC as experts on
financing. He noted that older homes were eligible for home
energy ratings.
2:02:38 PM
Representative Munoz asked if an older home required energy
improvements to be eligible for financing.
Mr. Brean replied that the age and condition of the house
were evaluated prior to financing. He mentioned the
necessity of insurance for the older home prior to the
approval of financing. He deferred the question to mortgage
operations.
Representative Munoz stated that she represented many
people with older homes.
2:03:46 PM
Representative Costello asked if the program could be used
in a school.
Mr. Brean replied that AKWarm had been used for small
commercial sized buildings, however the program did not
transcend to large public facilities. He mentioned working
with architects and engineers who understood energy
efficiency. A recent evaluation showed that school
districts could experience considerable savings with a
focus on energy efficiency construction and good operation
and maintenance practices. He mentioned the AHFC revolving
loan fund that was available to public schools for energy
efficient improvements to the facility. He stated that AHFC
issued contracts for architects and engineers to evaluate
public facilities with the goal of saving energy.
2:06:09 PM
Representative Thompson asked if the revolving loan program
had been utilized.
Mr. Brean replied yes; municipalities, the Department of
Transportation and Public Facilities and some school
districts had taken advantage of the program. He pointed
out that school districts hesitated to participate as they
preferred a legislative appropriation. He stated that AHFC
demonstrated the ease of generation for the loan payback,
which had increased the interest in the program.
Co-Chair Austerman OPENED public testimony.
2:07:37 PM
JOHN ANDERSON, OPERATIONS OFFICER, ALASKA HOUSING FINANCE
CORPORATION (via teleconference) commented that the
requirement for financing with AHFC stated that any home
built before 1992 was eligible without meeting energy
standards.
Co-Chair Austerman CLOSED public testimony.
Representative Thompson understood that many state
departments utilized services provided by the Alaska Cold
Climate Housing program.
Mr. Brean replied that AKWarm had a grant with the Alaska
Cold Climate Housing program working on the draft housing-
needs assessment study. The working relationship was good.
2:09:14 PM
Vice-Chair Neuman offered to provide committee members with
information from a recent presentation offered by
Department of Transportation and Public Facilities related
to performance contracting.
2:09:35 PM
Representative Gara discussed an Alaska Energy Authority
(AEA) program used by private companies for large
commercial buildings for energy audits.
Co-Chair Austerman stated that the bill would be held until
a later date.
2:10:38 PM
Representative Pruitt spoke to the findings piece of the
bill. He clarified that the Attorney General worked with
AHFC to draft the proposed legislation's findings section.
He stated that the appropriate changes were not opposed by
himself or the corporation.
HB 297 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
2:11:35 PM
The meeting was adjourned at 2:11 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 297 Sponsor Statement.pdf |
HFIN 2/19/2014 1:30:00 PM |
HB 297 |
| HB 297 AHFC Fact Sheet.pdf |
HFIN 2/19/2014 1:30:00 PM |
HB 297 |
| HB 297 NEW FN- DOR- 021614.pdf |
HFIN 2/19/2014 1:30:00 PM |
HB 297 |