Legislature(2009 - 2010)SENATE FINANCE 532
02/23/2009 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| SB115 | |
| SB116 | |
| SB93 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | SB 115 | TELECONFERENCED | |
| *+ | SB 116 | TELECONFERENCED | |
| + | SB 93 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 23, 2009
9:04 a.m.
9:04:47 AM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee meeting
to order at 9:04 a.m.
MEMBERS PRESENT
Senator Lyman Hoffman, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Charlie Huggins, Vice-Chair
Senator Johnny Ellis
Senator Kim Elton
Senator Donny Olson
Senator Joe Thomas
MEMBERS ABSENT
None
ALSO PRESENT
Jay Livey, Staff, Senator Lyman Hoffman, Sponsor; Senator
Joe Paskvan, Sponsor.
PRESENT VIA TELECONFERENCE
Regan Mattingly, State Affairs Coordinator, Alaska Primary
Care Association, Anchorage; Pat Luby, Advocacy Director,
Alaska Association of Retired Persons, Anchorage; Tom
Lakosh, Self, Anchorage; Melody Nibeck, Tribal Energy
Program Manager, Bristol Bay Native Association, Dillingham;
Norman Anderson, Economic Development Program Manager,
Bristol Bay Native Association, Dillingham; Myron Naneng,
President, Association of Village Council Presidents, Yukon-
Kuskokwim Delta Region; James Conner, Air Quality
Specialist, Fairbanks North Star Borough; Nadine Winters,
Assembly Member, Fairbanks North Star Borough.
SUMMARY
SB 93 "An Act relating to a municipal property tax
credit for an improvement that aids in improving
air quality."
SB 93 was HEARD and HELD in Committee for further
consideration.
SB 115 "An Act creating a rural community energy
assistance program; and providing for an effective
date."
SB 115 was HEARD and HELD in Committee for further
consideration.
SB 116 "An Act making a special appropriation for energy
assistance for rural communities; and providing
for an effective date."
SB 116 was HEARD and HELD in Committee for further
consideration.
SENATE BILL NO. 115
"An Act creating a rural community energy assistance
program; and providing for an effective date."
JAY LIVEY, STAFF, SENATOR LYMAN HOFFMAN, SPONSOR, explained
that SB 115 temporarily establishes the rural community
assistance program. The intent of the legislation is to
provide relief to Alaskan residents who are struggling to
pay heating costs this winter. Most residents of rural
Alaska heat their homes with fuel oil. The price of oil has
increased in rural Alaska, even though the price of a barrel
of oil has decreased. Most of the oil for the coming winter
was delivered prior to the decline of fuel oil prices.
Mr. Livey reported that there is not a lack of fuel in rural
Alaska except in a few isolated instances. Most of the fuel
stocks are adequate; however, many people do not have enough
money to purchase fuel, electricity, and other necessities.
He pointed to a Division of Community and Regional Affairs
report, "Current Community Conditions: Fuel Prices Across
Alaska, November 2008 Update" (Copy on File). Out of 100
communities surveyed, 27 pay more than $7 per gallon for
heating fuel.
9:09:03 AM
Mr. Livey explained that a person burning 800 gallons of
fuel each year--a fairly conservative amount--will spend
approximately $5700 per year to heat their home. In 2007,
the Institute of Social and Economic Research (ISER)
reported that the average per capita income for small
villages around Bethel was approximately $16,000
("Understanding Alaska's Remote Rural Economy, by Scott
Goldsmith, UA Research Summary No. 10" Copy on File).
Consequently, over 35 percent of an average individual's
income can be used for heating fuel alone. In addition, the
2007 ISER report noted that Bethel fuel costs were 92
percent higher than Anchorage costs. The ISER report also
covers food costs in rural Alaska.
Mr. Livey described other methods of distributing energy
assistance, including the Bulk Fuel Loan Program, Bulk Fuel
Bridge Loan Program, and the governor's emergency fuel
program; the programs are designed primarily to help
communities purchase fuel when there is a shortage. The
sponsors believe SB 115 would function differently. There is
enough fuel, but people cannot afford to buy it.
Mr. Livey added that the legislation is not intended to fix
the income problems in rural Alaska or to address long-term
fuel issues in rural Alaska. The intent is to provide people
with a way of getting through the rest of the current
heating season.
9:12:40 AM
Co-Chair Stedman clarified that the provision would be
repealed June 30, 2010. He asked about language on line 12
of the bill referring to departmental regulations.
Co-Chair Hoffman informed the committee that his staff is
looking at ways to change the legislation so it would not be
necessary to go through the regulatory process. The goal is
to make cash available immediately.
Co-Chair Stedman reiterated that the intent is to get
immediate relief for the coming winter. He referred to an
impending fiscal note by the Department of Commerce,
Community and Economic Development.
Co-Chair Stedman opened public testimony.
9:14:15 AM
REGAN MATTINGLY, STATE AFFAIRS COORDINATOR, ALASKA PRIMARY
CARE ASSOCIATION (APCA), ANCHORAGE (testified via
teleconference), testified in support of SB 115. The
association represents 26 community health center
organizations operating 141 clinics across the state. Clinic
directors have increasingly reported that revenues intended
for patient services are being crowded out and redirected to
cover high energy costs in facilities. Patient access could
be affected; APCA is requesting that non-profit community
health center organizations and other primary care safety
net providers as well as local tribal community health
center organizations be considered eligible for assistance
under the program.
PAT LUBY, ADVOCACY DIRECTOR, ALASKA ASSOCIATION OF RETIRED
PERSONS, ANCHORAGE (AARP) (testified via teleconference),
reported that AARP strongly supports SB 115. Many of the
younger people have had to leave rural communities, leaving
communities dominated by older people and children, the
people most susceptible to hypothermia.
TOM LAKOSH, SELF, ANCHORAGE (testified via teleconference),
had concerns about the bill supplying energy subsidies for
communities rather than individuals in need. He asked that
the bill be specifically amended to provide subsidy for
individuals and/or organizations in direct need rather than
a wholesale subsidy of communities. He thought the state had
indebted itself through the resource rebate the previous
year.
9:19:19 AM
Senator Thomas pointed out that the legislation is waiting
for language to assure dispersion of funds to individuals in
communities.
MELODY NIBECK, TRIBAL ENERGY PROGRAM MANAGER, BRISTOL BAY
NATIVE ASSOCIATION (BBNA), DILLINGHAM (testified via
teleconference), testified in support of the legislation.
She said the communities of Bristol Bay are facing high fuel
prices that impact electric, gas, and food bills. People
often have to choose between paying for fuel and other basic
necessities. She stressed that Dillingham heating fuel costs
$6.10 per gallon and food is 220 percent of Anchorage
prices. Small villages pay more. The association is
committed to being part of finding a long-term solution to
energy challenges in rural Alaska and recognized that the
bill was providing one-time assistance.
Ms. Nibeck informed the committee that the Bristol Bay
Region has one first-class city, 12 second-class cities, and
18 unincorporated communities. Since all communities equally
face high prices, BBNA hopes the bill will clearly define
"rural community."
NORMAN ANDERSON, ECONOMIC DEVELOPMENT PROGRAM MANAGER,
BRISTOL BAY NATIVE ASSOCIATION, DILLINGHAM (testified via
teleconference), spoke in support of the legislation. He
reported that increased assistance has been needed because
of economic challenges, including low salmon prices. He
explained that the people in the region are proud and rarely
ask for assistance. The people have done everything they
possibly could to be able to sustain themselves, but the
increasing price of fuel has made it more and more difficult
to make ends meet. He spoke for the more remote villages in
the region where people cannot find jobs and the necessary
income.
9:24:51 AM
MYRON NANENG, PRESIDENT, ASSOCIATION OF VILLAGE COUNCIL
PRESIDENTS, YUKON-KUSKOKWIM DELTA REGION (testified via
teleconference), spoke in strong support of SB 115. He
reported that fuel costs range from $6 to $11 per gallon, a
high amount for people in the village with limited
resources. The fuel is needed for gathering subsistence
resources. In the villages a gallon of milk can cost up to
$13 a gallon. People have to choose between fuel and food.
He emphasized the hardships in the region and the real need
for the energy assistance. The association has provided many
with low-income energy assistance, but it is not enough to
buy the necessary fuel.
Mr. Naneng added that people in the region have lost their
economic base due to poor management of fisheries. He stated
that if the fisheries had been managed well, some people
would have been able to manage through the winter. The
people are bearing the burden of conservation as well as
providing for their families.
Co-Chair Stedman closed public testimony.
9:29:28 AM
Co-Chair Stedman raised the issue of fuel delivery in
Western Alaska.
Co-Chair Hoffman noted that SB 115 was designed only to get
Alaskans through the following winter. He stressed that
there is need for a long-term solution. He referred to
legislation from the previous year for capping fuel prices.
He acknowledged that price capping might not be an ideal
solution. He thought SB 115 could be fine-tuned and
implemented. He reiterated his intent that the legislation
be as broad as possible to include all people in Alaska, and
his desire to avoid the time-consuming regulations process.
Co-Chair Stedman asked about the status of ports in the
region. Co-Chair Hoffman answered that ice-free ports begin
below Naknek. He added that the delivery schedule is the
problem as many communities did not get their fuel and had
to have it flown in.
9:32:03 AM
Senator Ellis stated support for the legislation. He asked
whether clinics were considered for fuel relief. Co-Chair
Hoffman hoped to have the issue addressed. Senator Ellis
emphasized need in rural health clinics.
SB 115 was HEARD and HELD in Committee for further
consideration.
SENATE BILL NO. 116
"An Act making a special appropriation for energy
assistance for rural communities; and providing for an
effective date."
9:33:34 AM
Co-Chair Hoffman explained SB 116 as the appropriation bill
to fund SB 115. The appropriation is for $5 million at
present. He did not want the program to be underfunded;
whatever is not utilized will be returned to the general
fund.
Co-Chair Stedman queried fund source identification. Co-
Chair Hoffman answered that at this point the only fund
being considered is the general fund.
9:35:04 AM AT EASE
9:35:45 AM RECONVENED
Co-Chair Stedman opened public testimony.
MELODY NIBECK, TRIBAL ENERGY PROGRAM MANAGER, BRISTOL BAY
NATIVE ASSOCIATION (BBNA), DILLINGHAM (testified via
teleconference), testified in support of the legislation.
9:36:48 AM
NORMAN ANDERSON, ECONOMIC DEVELOPMENT PROGRAM MANAGER,
BRISTOL BAY NATIVE ASSOCIATION, DILLINGHAM (testified via
teleconference) spoke in support of the legislation. He
emphasized how the bill would impact villages.
REGAN MATTINGLY, STATE AFFAIRS COORDINATOR, ALASKA PRIMARY
CARE ASSOCIATION (APCA), ANCHORAGE (testified via
teleconference), testified in support of SB 116. He urged
the committee to consider health clinics when formulating
the energy assistance program.
PAT LUBY, ADVOCACY DIRECTOR, ALASKA ASSOCIATION OF RETIRED
PERSONS, ANCHORAGE (AARP) (testified via teleconference),
testified in support of SB 116.
Co-Chair Stedman closed public testimony.
SB 116 was HEARD and HELD in Committee for further
consideration.
SENATE BILL NO. 93
"An Act relating to a municipal property tax credit for
an improvement that aids in improving air quality."
9:38:56 AM
SENATOR JOE PASKVAN, SPONSOR, explained SB 93, the Municipal
Air Quality Property Tax Credit (from Sponsor Statement,
Copy on File):
Some communities in Alaska have been designated as non-
attainment areas for PM 2.5 by the EPA [Environmental
Protection Agency]. Based on the requirements of the
Clean Air Act, the state and those impacted local
governments have three years to develop attainment
plans designed to bring air quality into compliance
with federal air standards.
Senator Paskvan reported that interior Alaska has an air
inversion, which creates a problem in cold weather when
heating requirements are at the highest. Trapped particles
results in the violation of the 2.5 air standards. He
continued:
SB 93 is needed as a first step to allow local
municipalities the latitude in developing tax credit
programs to address the important public health and
community compliance issues that result from poor air
quality.
Senate Bill 93 is designed to provide optional tools to
municipalities that can be used to create incentives
for individuals to take actions that will improve local
air quality and reduce fuel consumption.
SB 93 expands the discretion of municipalities in a
manner that allows, by ordinance, the creation of
programs that will offer property tax credits for
actions that the local governing body determines will
improve air quality. This bill requires that
eligibility, conditions and other criteria for the tax
credits be established by ordinance.
Examples of how this proposed legislation might be used
by a municipality include:
· Incentives to residents to exchange old-style
wood stoves for EPA certified wood stoves. Data
show that EPA certified wood stoves
significantly reduce fine particulate emissions
over non-EPA stoves. It is in the interest of
any community with air quality nonattainment
issues to have citizens who choose to heat with
wood do so in the most environmentally friendly
way.
· Incentives to residences or commercial
businesses to improve the energy efficiency of
their property. Reduced fuel consumption would
lead to reduced emissions from area heating or
electricity generation. Incentives could be
based on calculated BTU savings, MW reductions,
etc.
· Incentives to convert from carbon based energy
consumption to alternative energy generation.
This could involve tax credits for construction
and use of a solar array or wind turbine to
power/heat residential or commercial facilities.
The proposed legislation would create a full range
of options for a local municipality to address air
quality issues, rather than just restriction and
enforcement based options.
Senator Paskvan referenced the attached zero fiscal note.
9:43:17 AM
Co-Chair Stedman asked if the borough would incur EPA
penalties without air quality clean-up. Senator Paskvan
replied that the federal government can impose sanctions if
nonattainment continues. One immediate effect was that Fort
Wainwright failed consideration for a brigade of 5,000
striker members because of nonattainment of 2.5 standards.
He thought that kind of sanction would continue until
compliance was reached.
Senator Thomas asked if transportation funding would be
affected as well by nonattainment. Senator Paskvan replied
that the region not only lost the troops, but could lose
military bases altogether. Moving the legislation forward
would demonstrate intent to come into compliance.
9:46:07 AM
Senator Elton added that as energy costs have gone up, home
owners are being forced out of less expensive energy sources
such as wood stoves because of compliance issues.
Senator Huggins asked if Fairbanks, Anchorage, and Juneau
were under the EPA standards. Senator Paskvan did not know
which communities were in nonattainment. The statute's
language is broad enough to allow a local government to
provide tax credits for the increased energy efficiency of
existing structures as well as for conversion from a carbon-
based source to an alternative energy source. The
legislation is not only for communities in nonattainment; it
provides good social policy.
Senator Huggins asked if someone who owned multiple rental
properties could take advantage of the program. Senator
Paskvan answered that the legislation covers residences and
commercial businesses. The local community has the
discretion to decide who they want to benefit, the amount of
the tax credit, and the period of time covered.
9:49:41 AM
Senator Huggins asked if military communities were exempted
out of the calculation. Senator Paskvan replied that Fort
Wainwright was specifically not exempted.
Senator Olson asked the cost to the municipalities of the
tax credit. Senator Paskvan reported that those calculations
had not been done on the local level. The legislation is the
first step to promote implementation of the standard. The
intent is to leave local municipalities free to decide how
they want to approach the issue.
Co-Chair Stedman opened public testimony.
JAMES CONNER, AIR QUALITY SPECIALIST, FAIRBANKS NORTH STAR
BOROUGH (testified via teleconference), spoke in support of
the legislation. He read from a statement:
Within the greater Fairbanks area, the fine particulate
pollution fails to meet the EPA's National Ambient Air
Quality Standard 20 to 30 times each winter. This
health-based standard was changed in September 2006
based on the EPA's Science Advisory Board
recommendations, lowering the allowable concentration
of fine particulates from 65 to 35 micrograms per cubic
meter (ug/m3) for a 24-hour average. There is also an
annual standard that was left at 15 ug/m3. These
recommendations were based on many extensive health
studies over a five-year period. These studies
indicated that even short term exposure to fine
particulates can result in new cases of respiratory and
heart disease. This is truly a public health issue, in
addition to being an economic issue.
The fine particulate pollution is exacerbated in the
winter because the surrounding hills, the stagnant air
flow, and temperature inversions trap the particulates
produced locally. These are coming mostly from
transportation and space heating.
During the summer, space heating demands are reduced
and the pollution produced is cleared out with wind and
rain before it can accumulate to dangerous levels,
except when we experience wildland fires. We have
experienced concentrations above 1000 ug/m3 in the
summer due to wildland fires, but we are permitted to
exclude these natural emissions from our 24-hour and
annual averages, because they are not man-made, unless
we start the fires as a resource management strategy.
In Fairbanks, we depend on the clean summer air to
average with the polluted air in the winter to stay
below the annual limit of 15 ug/m3. This is one reason
it is important to reduce the number and severity of
the winter emissions. If we violate the winter average,
we need to extend those winter controls into the
summer.
9:54:48 AM
The timeline associated with the EPA action proceeds 90
days from the publication of the nonattainment
designation in the federal register. That starts the
clock, and then we have three years to submit to the
EPA an air quality control plan demonstrating how we
will attain the standard within five years. Once that
federal register designation is published, all new
construction projects in the designated nonattainment
area are then required to demonstrate conformity with
an approved air quality control plan, the plan we have
three years to submit, and requires EPA approval. Since
this plan takes time to create, there will likely be a
period when conformity cannot be met, and economic
development of the area can be affected. However, there
is a one-year grace period that starts with that
federal register designation date where new projects do
not have to demonstrate conformity. If the state fails
to submit a plan or show progress in cleaning up the
air, the EPA can begin to withhold federal funds, first
in the designated area and eventually to the entire
state.
An area or a county is allowed one exceedance of this
health standard per year. The second exceedance is
considered a violation that can bring a nonattainment
designation to the area. The number and severity of the
exceedances after that simply further jeopardizes
public health and the economic environment for
development, and the difficulty to eventually meet the
standard.
SB 93 gives the Fairbanks North Star Borough a means to
provide a voluntary incentive program to borough
residences and businesses to improve the efficiency of
their homes and businesses in a manner that will
improve air quality and efficiency. As the high cost of
energy has driven residents to lower costing fuels such
as wood and coal, this bill help further reduce this
cost and higher emissions.
9:57:13 AM
NADINE WINTERS, ASSEMBLY MEMBER, FAIRBANKS NORTH STAR
BOROUGH (testified via teleconference), spoke in support of
SB 93. Fairbanks has an air quality issue and is looking for
a way to protect the health of residents and as well as
long-term economic viability. The bill provides a tool to
meet both needs.
Co-Chair Stedman closed public testimony.
Co-Chair Stedman asked if there would be a federal penalty
against the state if the legislature did not act on the
bill. Senator Paskvan answered that the penalty would be on
communities that are in nonattainment. There could be
various consequences, including withdrawal of federal funds
for highways. He thought the best alternative was to
establish policy to get local municipalities to move towards
attainment.
SB 93 was HEARD and HELD in Committee for further
consideration.
10:00:16 AM
ADJOURNMENT
The meeting was adjourned at 10:00 AM.
| Document Name | Date/Time | Subjects |
|---|---|---|
| CNN Article.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 115 |
| Community Survey.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 115 |
| SB_93_AML_Support.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 93 |
| SB_93_Back-Up.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 93 |
| SB_93_Fiscal_Note.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 93 |
| SB_93_Letter_From_Mayor.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 93 |
| SB_93_Sponsor_Statement.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 93 |
| LA Times Article.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 115 |
| Senate Bill 115 Sponsor Statement.doc |
SFIN 2/23/2009 9:00:00 AM |
SB 115 |
| UA Research Rural Economy.pdf |
SFIN 2/23/2009 9:00:00 AM |
SB 115 |
| Senate Bill 116 Sponsor Statement.doc |
SFIN 2/23/2009 9:00:00 AM |
SB 116 |
| SB 115 SB 116 APCA Support Lttr Energy Assistance Program 2-22-09.doc |
SFIN 2/23/2009 9:00:00 AM |
SB 115 SB 116 |