Legislature(2007 - 2008)SENATE FINANCE 532
05/11/2007 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB209 | |
| HB110 | |
| HCR8 | |
| HB177 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | HB 110 | TELECONFERENCED | |
| + | HB 209 | TELECONFERENCED | |
| + | HCR 8 | TELECONFERENCED | |
| + | TELECONFERENCED |
MINUTES
SENATE FINANCE COMMITTEE
May 11, 2007
2:04 p.m.
CALL TO ORDER
Co-Chair Bert Stedman convened the meeting at approximately
2:04:26 PM.
PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice Chair
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
Senator Fred Dyson
Also Attending: REPRESENTATIVE KURT OLSON; MARCIA DAVIS, Deputy
Commissioner, Department of Revenue
Attending via Teleconference: From Offnet Locations: KATE GIARD,
Chair, Regulatory Commission of Alaska; DAN GAVORA, President
and Chief Executive Officer, Utility Services of Alaska (USA)
operating as College Utilities Corporation and Golden Heart
Utilities; From Valdez: DAVE DENGEL, Chief Executive Officer,
Copper Valley Telephone Cooperative; From Anchorage: DENNIS
NIEDERMEYER, Representative, Bristol Bay Telephone Cooperative;
TED MONINSKI, Director, Regulatory Affairs, Alaska
Communications Systems; DEAN THOMPSON, Legal Representative,
Municipal Light and Power; VIRGINIA RUSCH, Representative, AARP;
JIM ROWE, Executive Director, Alaska Telephone Association; JACK
RHYNER, President and Chief Executive Officer, TelAlaska Inc.;
STEVE HAMLEN, President, United Utilities; KRISTI CATLIN,
Representative, AT&T; From Mat-Su: DON REED, Vice President,
Regulatory Affairs, Matanuska Telephone Association
SUMMARY INFORMATION
HB 209-REGULATORY COMMISSION OF ALASKA
The Committee heard from the bill's sponsor, the Regulatory
Commission of Alaska, and the industry. A committee substitute
was adopted and the bill reported from Committee.
HB 110-EXTEND REGULATORY COMMISSION OF ALASKA
The Committee heard from the bill's sponsor, the Regulatory
Commission, and the industry. The bill reported from Committee.
HCR 8-RCA TASK FORCE
The Committee heard from the bill's sponsor and the industry.
The bill reported from Committee.
HB 177-NATURAL GAS PIPELINE PROJECT
The Committee heard a comparison between the House bill and its
Senate companion bill. One amendment was adopted and the bill
reported from Committee.
HB 162-MORTGAGE LENDING
This bill was scheduled but not heard.
2:06:57 PM
CS FOR HOUSE BILL NO. 209(JUD)
"An Act relating to the chair of the Regulatory Commission
of Alaska and amending the timeline requirements for a
final order of the commission; and providing for an
effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
AT EASE 2:07:12 PM /2:07:30 PM
Senator Elton moved to adopt committee substitute, Version 25-
LS0717\O, Kane, dated May 11, 2007, as the working document.
Without objection, the Version "O" committee substitute was
ADOPTED as the working document.
Co-Chair Stedman pointed out that the bill's title is changed by
the adoption of the Version "O" committee substitute. Therefore,
a Senate concurrent resolution would accompany the bill when it
reports from Committee.
2:08:01 PM
REPRESENTATIVE KURT OLSON, Chair, House Labor & Commerce (L&C)
Committee, the bill's sponsor, addressed the changes in the
committee substitute. The majority of the revisions result from
the decision to present time references in terms of days rather
than months. For example, the deadline specified in Section 1
subsection (a) page 1 line 5 now reads "180 days" rather than
the former reference to "six months".
Representative Olson communicated that Version "O" also
eliminated contentious language included in earlier bill
versions. For instance, during its hearings in the House, there
was disagreement over a section that specified that the governor
would select the chair of the Alaska Regulatory Commission
(RCA). The issue of whether the RCA chair should be appointed by
the governor or the RCA Board could be argued from either side.
The omission of this section from the bill is acceptable to the
sponsors.
2:09:23 PM
Representative Olson also concurred with increasing the
timeframe in which the Commission must issue its final order, as
specified in Section 3 subsection (c) page 2 line 4, from 270
days to 450 days.
Representative Olson concluded his remarks by affirming that the
changes in the Version "O" committee substitute were reasonable
and therefore acceptable to the House L&C Committee.
2:09:57 PM
Senator Thomas directed attention to new subsection (k), page 2
line 31 through page 3 line 1, added to AS 42.05.075 by Section
7, and the reference to (k) in new subsection (l), page 3 line
6, also added by Section 7. The question was whether AS
42.05.075(k) and (l) would limit the extension provision amended
in AS 42.05.175(f), page 2 line 20, by Section 6, to those
matters specified in subsection (k) that were advanced only by
the Commission.
2:11:25 PM
Representative Olson understood that the extension would apply
to matters presented by either the Commission or other parties.
Senator Thomas had also inferred that to be the intent. He was
simply seeking affirmation.
2:11:54 PM
DAN GAVORA, President and Chief Executive Officer, Utility
Services of Alaska (USA) operating as College Utilities
Corporation and Golden Heart Utilities, testified via
teleconference from an offnet location. USA is the second
largest water and waste water company in the State and serves
more than 8,500 accounts and 50,000 people in the Greater
Fairbanks area.
Mr. Gavora communicated that his company has experienced "the
consequences of the regulatory lag that allows excessively long
statutory periods to resolve rate case filings. The rate
adjustment process is cumbersome" and thereby often expensive.
Filing expenses are disproportionate to the return the utility
and its customers receive. USA is a strong proponent of the bill
before the Committee, particularly the provision that would
reduce the statutory time period for rate cases from 15 months
to nine months.
To that point, Mr. Gavora noted that numerous states have
determined that a lengthy hearing and review process does not
serve the interests of a utility's customers. For example,
oftentimes, by the time the RCA has ruled on a rate case, the
company has been forced to file a second rate adjustment case
due to escalating costs. This significantly "increases the
complexity" of the filings.
Mr. Gavora avowed that "reasonable actions and guidelines" by
the RCA should provide a utility "some assurance of a response
within a reasonable time after a filing takes place." USA
believes that "a reasonable time for a resolution of a rate case
is nine months."
2:14:15 PM
Mr. Gavora characterized rate case filings as "historical in
nature" in that a utility filing for the rate adjustment
provides backup information including the history of "increased
costs that have been in effect for at least one year before the
rate adjustment is presented" to the RCA.
Mr. Gavora reiterated that several states have "recognized the
benefit of more immediate action on rate adjustments and have
implemented statutory or voluntary timelines of nine months or
less." A study conducted by Michigan's public utility commission
"analyzed rate case filings from 1990 through 2003" and found
that 27 states provide determinations on such filings in nine
months or less. Alaska should "follow suit."
Mr. Gavora noted that were a mistake made either in favor or
against the utility, a prompt re-filing could be made by the
utility or required by the RCA. This process protects both the
public interest and the viability of the utility. Rates need to
be in effect during the computed timeframe, not one to two years
later."
2:15:29 PM
Mr. Gavora stressed that "the current statutory timeline does
not serve the best interests of our rate payers," as they
typically end up absorbing the expense of "legal consulting and
other direct expenses over these many months".
Mr. Gavora urged the Committee to support this legislation as
presented. It would assist in "repairing a system in dire need
of repair. Shortening the statutory timeline is one of the first
steps in this process."
2:15:58 PM
DAVE DENGEL, Chief Executive Officer, Copper Valley Telephone
Cooperative, testified via teleconference from Valdez. The
cooperative is a member-owned company with approximately 3,000
members serving approximately 9,000 residents in an area of
approximately 9,600 square miles.
Even thought he did not object to the bill, Mr. Dengel cautioned
that, without the addition of more RCA staff, the timelines
might be too short. Therefore, he urged that the legislation be
accompanied by a fiscal note reflecting a staffing increase to
ensure that thorough analyses could be conducted.
Mr. Dengel specified that the RCA's responsibilities are vast.
Furthermore, each of its telecommunications, pipeline, and other
utility work obligations are complicated. Additional staff is
necessary in order to allow the RCA "to continue to provide the
service to companies like Copper Valley".
2:17:44 PM
DENNIS NIEDERMEYER, Representative, Bristol Bay Telephone
Cooperative, testified via teleconference from Anchorage. His
testimony has been shortened due to the fact that the committee
substitute eliminated the section of the previous bill that
specified that the governor would designate the RCA chair.
Mr. Neidermeyer remarked that the cooperative does not take
issue with any of the timelines proposed in the bill. He echoed
Mr. Dengel's remarks about the good service provided by the
Commission and that, in order to support the shortened timelines
proposed in this bill, the RCA must be appropriately staffed.
2:19:40 PM
TED MONINSKI, Director, Regulatory Affairs, Alaska
Communications Systems (ACS), testified via teleconference from
Anchorage and informed the Committee that his remarks would be
in terms of statutory references rather than specific sections
of the bill because the Version "O" committee substitute was not
available to those testifying in the Anchorage Legislative
Information Office (LIO).
Mr. Moninski questioned whether private settlements and
contracts language that had been included in an earlier version
of the bill was included in the Version "O" committee
substitute.
2:20:47 PM
Representative Olson advised Mr. Moninski that the language in
question was not included in Version "O".
Mr. Moninski thus advised the Committee that he would address
the affect of eliminating that language. First, however, he
wanted the Committee to know that ACS, which has closely
followed this legislation, advocates for one principle: that
being that a timeline should be specified for every matter
coming before the RCA.
Mr. Moninski then advised that eliminating the language
pertaining to private settlements and contracts would serve "to
create one category of settlements and contracts" that would
have no timeline. "And that would be disappointing. Instead, I
believe the concerns about the language that was in the earlier
version of the bill, could be resolved rather easily by
eliminating the word 'private'" and adding the words "within the
Commission's jurisdiction" after "settlements and contracts".
Mr. Moninski stated that proceeding in that manner "would
continue to provide a timeline for all categories of cases that
come before the Commission and at the same time recognizes that
all of the normal procedures and legal standards that would be
applied to contracts and settlements that the Commission would
normally review anyway would be in no way affected by applying a
timeline in this provision."
Mr. Moninski urged the Committee to consider this course of
action as opposed to eliminating the language in its entirety.
2:22:33 PM
DEAN THOMPSON, Legal Representative, Municipal Light & Power
(ML&P), testified via teleconference from Anchorage. ML&P, which
is owned and operated by the Municipality of Anchorage,
"provides retail electric service" to the area via its own
generation system and transmission and distribution facilities.
ML&P participated in the regulatory hearings held by the RCA
regarding potential changes to AS 42.05, and, while not opposed
to the bill, ML&P was disappointed that adequate funding for
staff had not been addressed in the bill. There is concern
whether existing staffing levels could accommodate the shortened
timelines being proposed.
Mr. Thompson shared that ML&P was "impressed with the work of
the current Commission and the improvements that have been made
over the past several years." ML&P also commended the work of
RCA chair Kate Giard. While ML&P does not always agree with
RCA's rulings, it has witnessed a "marked improvement in docket
management and the overall timeliness of dockets".
Mr. Thompson stated that ML&P was pleased that Version "O" does
not further previous language that would have terminated the
current panel of commissioners.
2:24:43 PM
Mr. Thompson advised of another issue that ML&P would support
being included in the bill. That being language allowing the
governor or the administration to set the salaries of the RCA
commissioners. While supportive of cost containment, ML&P
believes that "you get what you pay for." The regulation of
utility rates is becoming an increasingly specialized and
technical field that requires knowledgeable individuals.
Reasonable compensation is required. ML&P would support "a
modest increase in the Regulatory Cost Charge (RCC) rate to
support adequate salary funding.
2:25:47 PM
Mr. Thompson expressed that ML&P agreed with the effort to
address rate change filings in an expedient manner; however,
while a nine month period might be "adequate" for most rate
change cases, complex or multi-party cases would require
additional time.
Mr. Thompson concluded his remarks by emphasized that ML&P is
very supportive of the Commission and its chair person. To that
point, ML&P encouraged consideration of increasing the
Commission's salaries.
2:26:45 PM
VIRGINIA RUSCH, Representative, AARP, testified via
teleconference from Anchorage. AARP is interested in utility
rate legislation due to the potential impact on its members and
other rate payers. AARP asked her to follow this legislation
because of her extensive experience with the RCA and its
predecessor agency since she had served either as the public
advocacy attorney assigned to the Commission or as the attorney
for the Commission during 14 of her 23 years as a State
assistant attorney general. She has represented AARP in rate
cases, consumer hearings, and appeals since retiring from State
employment.
Ms. Rusch was very familiar with Commission processes and
problems and would be happy to answer any Committee questions on
the subject.
Ms. Rusch, noting that a copy of the Version "O" committee
substitute has now been provided to the testifiers in the
Anchorage LIO, stated that AARP is happy with some of the
changes made in the committee substitute, specifically that the
deadline in Section 3(c), page 2 lines 2 through 6, "had been
restored" to specify that the Commission must issue a final
order in 450 days.
Ms. Rusch agreed with Mr. Thompson that a reasonable amount of
time must be provided to address complex issues and issues
concerning large utilities.
2:28:47 PM
Ms. Rusch addressed Mr. Gavora's remarks in support of
"shortened timelines." During her career with the State, she had
participated in several rate cases, including one involving Mr.
Gavora's companies. One of her duties at the time was to
schedule conferences. Her experience then in "divvying up" the
15 month period amongst the participants in the case was that
"everybody wanted more time". Based on those experiences, she
did not foresee that the timeframe could be shortened.
Ms. Rusch detailed the mechanics of a rate case, including the
requirement that the utility submit information justifying its
rate adjustment request and the responsibility of the Commission
and attorney general assigned to it to determine whether the
costs argued by the utility justify a rate increase. "By
shortening the time period to nine months as Mr. Gavora
suggests, you are harming the ability of the Commission to
protect ratepayers."
Ms. Rusch noted that the investigation of requested rate
increase filings has been conducted by the Attorney General's
Office for the past several years. This is the result of an
Executive Order a few years prior that moved the investigatory
responsibility in a rate case into that Office.
2:30:26 PM
Ms. Rusch noted that the Attorney General Office's is short-
staffed and has often had to delay rate investigations for
months in order to address other matters before them. Added to
the timing issue is the fact that in recent years, utilities
themselves have requested more time to file "reply testimony."
In one recent case, the Commission required four months to issue
an order once the other processes allowed it to come before
them. A timeline of nine months is unrealistic.
Ms. Rusch spoke against reducing the timeframe to nine months
until the issue of adequate staffing is addressed.
2:31:49 PM
JIM ROWE, Executive Director, Alaska Telephone Association,
testified via teleconference from Anchorage. The Association,
which is comprised of 15 companies serving rural Alaska,
supports many of the changes made in Version "O".
Mr. Rowe advised the Committee that he was also concerned about
the private settlement and contract language discussed earlier.
The suggestion offered by Mr. Moninski would be acceptable as it
would address his concerns.
Mr. Rowe voiced approval of the timelines specified in Version
"O". However, reducing the length of time in which an issue must
be addressed would increase pressure on staff. Unfortunately,
this issue has not been addressed in the bill.
2:32:57 PM
Mr. Rowe announced therefore that the Association supports
increased staffing levels. Thus, the proposal to increase the
RCC rate to support increased staff levels as well as to support
an increase in commissioners' salaries is also acceptable.
Commissioners should be adequately compensated for the demands
of the job.
Mr. Rowe declared that, like others, the Association is not
always happy with the rulings made by the Commission; however,
they are "satisfied with the effort and the integrity of the
people who are sitting on that commission today." Their
compensation should be addressed in the bill.
2:34:24 PM
Representative Olson clarified that the salary issue was removed
from the bill at the request of the RCA and Governor Sarah
Palin. Separate legislation regarding establishing a RCA task
force was introduced in response to a request from the Governor
that the Legislature be the body making the determination on
commissioners' salaries.
2:35:14 PM
Senator Thomas asked for clarification as to whether staffing
levels of the RCA would be expanded.
2:35:56 PM
KATE GIARD, Chair, Regulatory Commission of Alaska, testified
via teleconference from an offnet location. The $505,000 FY 2008
funding increase reflected in the Department of Commerce,
Community and Economic Development May 10, 2007 fiscal note
would increase RCA "resources" to accommodate both the shortened
timelines and the new requirement that a timeline be specified
for every type of docket coming before the Commission.
Ms. Giard noted, however, that the RCA is "challenged" because
this funding request and the $1,300,000 funding being considered
in the FY 2007 supplemental bill "will cause the RCA to exceed
the statutory rate cap which is a limit on the amount of
revenues that it can collect from regulated utilities."
Ms. Giard elaborated on how testifiers' proposal to fund new
positions and increased salaries for commissioners with an
increased RCC rate would not mesh with the ability of the RCA to
collect revenues from utilities under existing statutory
restrictions or their ability to receive the supplemental
funding.
2:37:27 PM
Senator Elton asked why the funding amount requested in the May
10, 2007 fiscal note had not decreased as a result of some of
the timeframes in Version "O" being lengthened.
Ms. Giard clarified that the staffing level proposed in the
$505,000 fiscal note was developed prior to the changes made in
Version "O". It was noted that Version "O" shortened the
entirety of timelines specified in Section 7 subsection (k),
page 2 beginning on line 28 through page 3 line 5, from nine
months to six months. The staffing levels in the fiscal note
were deemed necessary in order for the Commission to comply with
new and revised timeframes.
Ms. Giard communicated that establishing in statute a timeline
for every case coming before the RCA, as proposed in this bill,
would be labor intensive, particularly as, 181 cases, or
approximately 46 percent of the rate cases coming before the
Commission in the last three years, had not previously been
subject to any timeline.
2:39:01 PM
In response to a question from Senator Thomas, Ms. Giard pointed
out that, in addition to imposing a timeline on every rate case
filed with the RCA, this legislation would impose a timeline on
any jurisdictional matter presented to the RCA. She clarified
that this "process was heavily supported by the RCA".
Senator Thomas asked Ms. Giard whether the six month timeline
only applied to adjudicated dockets.
2:39:46 PM
Ms. Giard clarified that the six month timeline would apply "to
all cases filed with the Commission".
2:40:05 PM
Senator Olson advised the Committee that the May 10th $505,000
fiscal note was suspect. Not only had timelines in Section 3 AS
42.05.175(c) been extended from 270 days to 450 days, but the
effective date of the section had been changed to July 1, 2008.
2:40:50 PM
Senator Thomas moved to report the Version 25-LS0717\O committee
substitute from Committee with individual recommendations and
accompanying fiscal notes.
2:41:24 PM
Senator Elton objected in order to request that the bill's
fiscal note be recalculated. He agreed with Representative Olson
that the fiscal note should be substantially lower than $505,000
because of the language revisions in Version "O". While he would
not object to moving the bill from Committee, he would like an
updated fiscal analysis of the Version "O" committee substitute
before the bill came before the full Senate.
Senator Elton removed his objection.
Co-Chair Stedman announced that the RCA would provide the
requested information.
AT EASE 2:42:14 PM / 2:48:24 PM
Ms. Giard clarified that "while the Legislature has seen fit in
this CS" to alter the timelines for rate making, the RCA had
also opened a docket on revising timelines. No action has been
taken on that docket however, as the RCA was waiting on the
Legislature to address policies under their jurisdiction. The
RCA "fully intends to move forward on that docket" and "shorten
the timelines as the public utilities and the public advocate
recommend." The RCA considers reducing regulatory lag to be very
important.
Co-Chair Stedman noted that an updated fiscal note would be
developed to accompany the bill.
There being no further objection, SCS CS HB 209(FIN) REPORTED
from Committee with Senate Concurrent Resolution, Version 25-
LS0949\C and two new fiscal notes: a $229,400 fiscal note dated
May 11, 2009 from the Department of Commerce, Community and
Economic Development and an indeterminate fiscal note dated May
8, 2009 from the Department of Law.
AT EASE 2:50:36 PM / 2:51:32 PM
CS FOR HOUSE BILL NO. 110(L&C)
"An Act amending the powers and duties of the legislative
audit division regarding the Regulatory Commission of
Alaska; amending annual report requirements for the
Regulatory Commission of Alaska; extending the termination
date for the Regulatory Commission of Alaska; and providing
for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Stedman stated that this bill would extend the
termination date of the Regulatory Commission of Alaska (RCA).
REPRESENTATIVE KURT OLSON, the bill's sponsor, stated that this
bill would extend the termination date of the RCA four years.
The bill also contained a provision that required a "report
card" to be compiled every two years. The report card would
review the information provided in the RCA's annual report to
determine whether or not the RCA was in compliance with such
things as specified timelines and other performance measures.
The four year extension timeframe was considered reasonable
following discussions with the Governor Sarah Palin
Administration, the presiding officers of the House of
Representatives and the Senate, and in consideration of new
timelines specified in HB 209.
Co-Chair Stedman announced that public testimony would now
commence.
2:52:42 PM
DON REED, Vice President, Regulatory Affairs, Matanuska
Telephone Association, testified via teleconference from Mat-Su
in support of the bill. While the Association has not always
received favorable rulings from the RCA nor would expect that,
they have received and do expect "a fair and impartial unbiased
review of our cases."
Mr. Reed voiced that the Association has also witnessed a
tremendous increase in the efficiency of the services provided
by the RCA. This would include more timely docket reviews and
improved and clearly written orders. Access to information
online has also been beneficial. The improvements made by the
Commission have made dealing with them easier and less costly.
In conclusion, the Association fully supports the bill.
2:54:20 PM
DENNIS NEIDERMEYER, Representative, Bristol Bay Telephone
Association, testified via teleconference from Anchorage and
echoed Mr. Reed's comments in support of the bill. The work
conducted by the Commission is appreciated. Four years is the
shortest extension period that should be considered.
2:55:04 PM
JACK RHYNER, President and Chief Executive Officer, TelAlaska
Inc., testified via teleconference from Anchorage and advised
the Committee that TelAlaska Inc., which operates two telephone
companies in the State, is in favor of reauthorizing the RCA.
"It would be practically impossible to regulate utilities to
operate without the RCA." The efforts of Chairman Giard and the
other RCA commissioners to shorten the time in which matters are
addressed and orders are completed are noticeable.
2:55:54 PM
STEVE HAMLEN, President, United Utilities, testified via
teleconference from Anchorage, in support of this bill on behalf
of his company. United Utilities provides telecommunication
service to 70 different communities, primarily in the Yukon-
Kuskokwim Delta.
Mr. Hamlen avowed that there is a linkage between what the
Commission does and the need to conduct that business in
cooperation with the Federal Communications Commission (FCC).
The State is the recipient of millions of federal dollars in
support of telemedical services, distance learning services, and
services to low-income households. In order to facilitate these
services, the RCA must work closely with the FCC. The RCA must
be fully staffed, be "up and running" and be fully funded in
order for the State to receive the federal benefits.
Mr. Hamlen stated that Chair Giard has been instrumental in
getting public access points established in many communities
throughout the State for broadband services, telemedicine
services, and services to low-income households.
2:57:32 PM
DEAN THOMPSON, Legal Representative, Municipal Light & Power,
testified via teleconference from Anchorage in support of
reauthorizing the RCA. He noted that, for the regulated
utilities, "predictability and continuity is important. We need
to know what the rules are, and having a level of continuity
without interruptions of threats of sunset assists that."
2:58:06 PM
VIRGINIA RUSCH, Representative, AARP, testified via
teleconference from Anchorage. AARP is in support of extending
the commission. "RCA is essential to protect consumers by
setting just and reasonable rates."
2:58:33 PM
JIM ROWE, Executive Director, Alaska Telephone Association,
testified via teleconference from Anchorage in favor of
extending the Commission four years. This regulatory body is
needed. He urged the Committee to advance the bill in short
order.
2:59:11 PM
KRISTI CATLIN, Representative, AT&T, testified via
teleconference from Anchorage, in support of extending the RCA.
AT&T believes "the Commission has done a tremendous job in
reducing timelines and dealing with issues."
2:59:43 PM
KATE GIARD, Chair, Regulatory Commission of Alaska, testified
via teleconference from an offnet location. The issue of
extending the RCA is a public policy decision. The Commission
would be pleased with a four year extension.
3:00:07 PM
Co-Chair Hoffman moved to report the bill from Committee with
individual recommendations and accompanying fiscal note.
There being no objection, CS HB 110(L&C) was REPORTED from
Committee with previous fiscal note #2 from the Department of
Commerce, Community and Economic Development.
AT EASE 3:00:42 PM / 3:01:38 PM
CS FOR HOUSE CONCURRENT RESOLUTION NO. 8(L&C)
Establishing a legislative task force to make
recommendations regarding job descriptions and salary
changes for the commissioners and support staff and the
possible need for additional support staff of the
Regulatory Commission of Alaska.
This was the first hearing for this bill in the Senate Finance
Committee.
REPRESENTATIVE KURT OLSON, the bill's sponsor, informed the
Committee that this Resolution would establish a nine member
Legislative Task Force which would be charged with reviewing and
developing recommendations pertaining to the salary schedules of
the Alaska Regulatory Commission (RCA) and its staffing levels.
Particular attention would be given to the issue of whether
additional staff would be required to ensure compliance with
docket determination timelines. Another element of interest
would be the relationship between the RCA and the attorneys in
the Attorney General's Office assigned to the RCA.
Representative Olson specified that the Task Force would be
comprised of three members appointed by the Speaker of the
House; three members appointed by the Senate President; Governor
Sarah Palin or her designee; Department of Law Attorney General
Talis Colberg or his designee; and Department of Commerce,
Community and Economic Development Commissioner Emil Notti or
his designee. The Task Force would meet five times during the
Legislative Interim and compile a report of its recommendations
to the Legislature by February 1, 2008. The Task Force would
terminate on May 30, 2008. The Resolution is accompanied by a
$10,000 fiscal note from the Legislative Affairs Agency.
3:03:17 PM
DEAN THOMPSON, Legal Representative, Municipal Light & Power
(ML&P), testified via teleconference from Anchorage and
communicated that even though ML&P "is not convinced of the need
for such a Task Force," it would not oppose it. He reiterated
remarks he made during his earlier testimony on HB 209 in which
he advised that ML&P believes that "the commissioners are
overdue for a salary increase." ML&P would "support a statutory
amendment that just specifies that the commissioners shall
receive an annual salary."
3:04:03 PM
JIM ROWE, Executive Director, Alaska Telephone Association,
testified via teleconference from Anchorage. Like the previous
testifier, he was not convinced of the need to convene a task
force. It would simply consume time of commissioners, the
Legislature, the industry, and the Administration. The issues
could have been addressed during this Legislative Session.
Mr. Rowe stated that charging the Task Force with developing a
job description for the commissioners is unnecessary as that is
a known element. The salary specifications that had been
included in previous versions of separate Senate RCA legislation
would have aligned commissioner compensation with that of a
District Court judge. The Legislature could have addressed that
if it had remained in the bill. That would have been his
preferred approach. Support staff issues were, at one time, also
included in the bill.
Mr. Rowe restated comments made during his earlier testimony on
HB 209 in which he had advocated for an increase in RCA staff
and appropriate salaries. Nonetheless, since these things were
not included in that RCA bill, this legislation is the only
option available through which to address these matters.
3:05:20 PM
KRISTI CATLIN, Representative, AT&T, testified via
teleconference from Anchorage to emphasize that the industry
would have preferred the issues specified in this Legislation to
have been addressed during this Legislative Session. However,
because the effort to correct the salary schedule of the
Commissioners and other staffing issues is "long overdue", AT&T
would not object to the Task Force. The desire is to get these
issues resolved.
3:06:06 PM
Co-Chair Hoffman moved to report the resolution from Committee
with individual recommendations and accompanying fiscal note.
There being no objection, CS HCR 8(L&C) was REPORTED from
Committee with previous $10,000 fiscal note #1 from the
Legislative Affairs Agency.
RECESS TO THE CALL OF THE CHAIR 3:07:21 PM / 6:07:14 PM
Co-Chair Stedman called the meeting back to order.
CS FOR HOUSE BILL NO. 177(FIN) am
"An Act relating to the Alaska Gasline Inducement Act;
providing inducements for the construction of a natural gas
pipeline and shippers that commit to use that pipeline;
establishing the Alaska Gasline Inducement Act
reimbursement fund; providing for an Alaska Gasline
Inducement Act coordinator; making conforming amendments;
and providing for an effective date."
This was the first hearing for this bill in the Senate Finance
Committee.
Co-Chair Stedman expressed that the intent of this hearing is to
compare the provisions of CS HB 177(FIN)am, the Alaska Gasline
Inducement Act (AGIA) bill which recently passed the House of
Representatives, to its Senate companion bill, CS SB 104(FIN),
which recently passed the Senate. To assist in this comparison,
a copy of CS HB 177(FIN)am has been modified [copy on file] to
highlight the differences. The provisions that differ are color
coded: the House language is identified by blue lettering and
the Senate language by red lettering.
[NOTE: In addition to the color coding, the House language is
underlined and the Senate language has a strike-through mark
across it.]
Co-Chair Stedman informed the Committee that, prior to this
hearing, his office, Senator Huggins' office, and
representatives of the Governor Sarah Palin Administration met
and thoroughly reviewed the bills. The group has developed a
recommendation as to whether the House or Senate language is
preferred in respect to each differing language matter.
Co-Chair Stedman identified the first difference between the two
bills as being in the bill's title, page 1, line 3. The House
language "reimbursement" is preferred to the "matching
contribution" language included in the Senate bill.
6:08:57 PM
Chapter 90. Alaska Gasline Inducement Act.
Article 2. Alaska Gasline Inducement Act License.
Co-Chair Stedman began reviewing the differing provisions in
sections of Chapter 90. Article 2, added to Alaska Statute (AS)
43 by Section 1 of the bill.
Section 43.90.110. Natural gas pipeline project
construction inducement., subsections (a)(1)(A) and
(a)(1)(B) (page 2 line 25 and line 30, respectively).
Co-Chair Stedman informed that the preference in these instances
is that the House word "reimbursements" be utilized following
the word "state's" rather than the term "matching contribution"
as proposed by the Senate.
Section 43.90.110. Nature gas pipeline project
construction inducement., subsection (a)(1)(C) (page
3, lines 4 through 6 and line 10)
Co-Chair Stedman stated that the recommendation is that the
Senate language be used. Thus the language "pursing firm
transportation commitments in a binding open season, to securing
financing for the project, or to" would be inserted following
"related to" on page 3,line 4. The phrase "lobbying costs,"
would be inserted following "overhead costs," on page 3, line
10.
6:09:25 PM
Section 43.90.130. Application requirements.,
subsection (9) (page 8 line 26)
Co-Chair Stedman voiced that the House language "reimbursement"
is recommended over the Senate's "matching contribution"
language following the word "state's" on page 8 line 26.
6:10:04 PM
Co-Chair Stedman announced that because only the Committee
Members had color copies of the bill, he would identify the
House language as that which is underlined and the Senate
language as that which is struck-through with a line.
6:10:17 PM
Co-Chair Stedman resumed his review of language recommendations
in Article 2.
Section 43.90.130. Application requirements.,
subsection (17) (page 9, line 30)
Co-Chair Stedman stated that the recommendation is to retain the
House language "to the maximum extent permitted by law"
following "agreement" on page 9 line 30. This language was not
included in the Senate version of the bill.
6:10:29 PM
Section 43.90.130. Application requirements.,
subsection (18) (Page 10 line 3)
Co-Chair Stedman expressed that the House language
"reimbursement" is preferred to the Senate's "matching
contribution" following "state's" on page 10, line 3.
6:10:38 PM
Section 43.90.160. Notice, review, and comment.,
subsection (c) (page 11 lines 29 through 31)
Co-Chair Stedman informed that the Senate language is preferred
to that of the House in this provision. The language would read
"(c) After the commissioners determine that all applications
that have not been rejected are complete under AS 43.90.140,
information provided by the applicants …".
6:11:00 PM
Section 43.90.170. Application evaluation and
ranking. Subsection (b) (page 12 line 15)
Co-Chair Stedman expressed that the Senate language is preferred
in this Section. Thus, the recommendation is that the word
"six," would be inserted following "five," on page 12, line 15.
6:11:47 PM
Section 43.90.170. Application evaluation and
ranking. subsection (B)(5) (page 12 line 25)
Co-Chair Stedman communicated that the House language
"reimbursement" is preferred to the Senate's "matching
contribution" language following the phrase "the amount of the"
on page 12, line 25.
6:11:57 PM
Section 43.90.200. Certification by regulatory
authority and project sanction., subsection (e) (page
15 line 30)
Co-Chair Stedman communicated that the Senate reference to AS
43.90.110 is preferred to the House reference of AS 43.90.100.
6:12:17 PM
Section 43.90.220. Records, reports, conditions,
and audit requirements., subsection (d)(2)(page 17
line 1)
Co-Chair Stedman stated that the House approach to this
subsection was recommended. Thus, the Senate language "when and
as issued" would not be included in the text.
6:13:22 PM
Section 43.90.230. License violations; damages.,
subsection (c) (page 17 lines 29 and 30)
and
Section 43. 90.230. License violations; damages.,
subsection (e)(1)(page 18 line 11)
Co-Chair Stedman stated that the House language "reimbursements"
is preferred to the Senate's "matching contribution" verbiage
following the word "state" in both of these instances.
Section 43.90.240. Abandonment of project.,
subsection (b) (page 18 lines 26 and 27)
Co-Chair Stedman specified that the House language was preferred
in this subsection. Thus, the language would read "(b) If the
commissioners or the licensee determine that the project is
uneconomic and the other party disagrees, the disagreement shall
be settled…".
6:13:48 PM
Article 4. Miscellaneous Provisions.
Co-Chair Stedman next addressed the language recommendations
pertinent to Article 4 of Chapter 90, added to AS 43 by Section
1 of the bill.
Section 43.90.400. Alaska Gasline Inducement Act
….(page 25 lines 17 through 21)
Co-Chair Stedman stated that the House language "reimbursement"
was preferred to the Senate's "matching contribution" language
following the word "Act" on page 25, line 17 and 19 and the word
"state's " on line 21.
Section 43.90.400. Alaska Gasline Inducement Act
… .,subsection (c)(page 25 line 31)
Co-Chair Stedman stated that the House language was the
preferred choice in this section. Thus the Senate language
"matching contributions in the form of" would not be utilized.
6:14:49 PM
Section 43.90.400. Alaska Gasline Inducement Act
…. Subsection (c) (page 26 line 2)
Co-Chair Stedman recommended that the House language
"reimbursement" be utilized instead of the Senate's "matching
contributions" language following the word "as" on page 26, line
2.
6:15:00 PM
Section 43.90.400. Alaska Gasline Inducement Act
… Subsection (d) (page 26 line 8)
Co-Chair Stedman stated that the recommendation is to adopt the
House language "reimbursement" as opposed to the Senate language
"contributions" following the word "for" on page 26, line 8.
6:15:22 PM
Article 5. General Provisions.
Co-Chair Stedman noted that the following recommendations
pertain to language in Article 5 of Chapter 90, added to AS 43
by Section 1 of the bill.
Section 43.90.900. Definitions., subsection (4)
(page 29 line 3 and line 4)
Co-Chair Stedman stated that the recommendation is that the
Senate language be considered in two areas of this provision.
Thus, the House word "mean" would be replaced with the word
"means" on page 29, line 3 and the word ", and" would replace
the word "or" following "Alaska" on page 29, line 4.
6:15:46 PM
Section 43.90.900. Definitions., subsection (17)
(page 30 line 13)
Co-Chair Stedman stated that the recommendation is that the
House language "a similar process" would be utilized as opposed
to the Senate language "similar procedures" on page 30, line 13.
6:16:18 PM
Co-Chair Stedman announced that this concluded the provision
comparisons and recommendations. He characterized the majority
of the changes as "word-smithing".
6:17:32 PM
Senator Elton asked whether the Department of Revenue concurred
with the recommended language.
6:17:39 PM
MARCIA DAVIS, Deputy Commissioner, Department of Revenue
answered in the affirmative.
AT EASE 6:17:54 PM / 6:20:02 PM
Amendment #1: This amendment incorporates the entirety of
recommendations reviewed by Co-Chair Stedman into the bill.
Co-Chair Stedman moved the amendment and objected for purposes
of discussion.
No discussion forthcoming, Co-Chair Stedman removed his
objection.
Without further objection, Amendment #1 was ADOPTED.
AT EASE 6:20:46 PM / 6:21:07 PM
Co-Chair Hoffman moved to report the bill, as amended, from
Committee.
AT EASE 6:21:40 PM / 6:22:23 PM
Co-Chair Hoffman amended his motion to move with the bill,
previous fiscal notes and a new Department of Natural Resources
fiscal note dated May 11, 2007.
There being no objection, CSC CS HB 177(FIN) was REPORTED from
Committee with previous zero fiscal note #1 from the Department
of Administration; previous zero fiscal note #2 from Department
of Commerce, Community and Economic Development; previous zero
fiscal note #3 from the Division of Oil & Gas, Department of
Natural Resources; previous $2,226,000 fiscal note #5 from the
Department of Revenue; previous $132,800 fiscal note #6 from the
Office of the Governor; previous $6,500,000 operating budget
fiscal note #7 from the Department of Labor and Workforce
Development; and new $5,000,000 capital expenditure fiscal note
from the Division of Oil and Gas, Department of Natural
Resources, dated May 11, 2007.
6:23:02 PM
Co-Chair Stedman reviewed the Committee's upcoming meeting
schedule.
ADJOURNMENT
Co-Chair Bert Stedman adjourned the meeting at 6:23:48 PM
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