Legislature(1995 - 1996)

02/09/1995 09:10 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
                                                                               
                             MINUTES                                           
                    SENATE FINANCE COMMITTEE                                   
                        February 9, 1995                                       
                            9:10 a.m.                                          
  TAPES                                                                        
                                                                               
  SFC-95, #3, Side 1 (260-end)                                                 
  SFC-95, #3, Side 2 (575-end)                                                 
  SFC-95, #5, Side 1 (000-403)                                                 
                                                                               
  CALL TO ORDER                                                                
                                                                               
  Senator Rick Halford,  Co-chairman, convened the  meeting at                 
  approximately 9:10 a.m.                                                      
                                                                               
  PRESENT                                                                      
                                                                               
  All  committee  members  (Co-chairs  Halford  and  Frank and                 
  Senators Donley, Phillips, Rieger,  Sharp, and Zharoff) were                 
  present.                                                                     
                                                                               
  ALSO ATTENDING: Senate President Drue Pearce; Speaker of the                 
  House   Gail   Phillips;   Senator  Duncan;   Representative                 
  Finkelstein; Pat  Pourchot, Legislative Director,  Office of                 
  the  Governor; Former  Juneau  Mayor, Jamie  Parsons;  Chuck                 
  Achberger, Director,  Juneau Chamber of Commerce;  Pam Neal,                 
  Alaska State Chamber  of Commerce; Dave  Hutchens, Executive                 
  Director,  Alaska  Rural  Electric Cooperative  Association;                 
  Chip Wagoner; Josh Fink, aide to Senator Kelly; and aides to                 
  committee members and other members of the legislature.                      
                                                                               
  ALSO PARTICIPATING VIA TELECONFERENCE:  Don Schroer,  Alaska                 
  Public Utilities Commission,  Anchorage; Bob Lohr, Executive                 
  Director, Alaska Public Utilities Commission, Anchorage; and                 
  Jimmy Jackson, Attorney for GCI, Anchorage.                                  
                                                                               
  SUMMARY INFORMATION                                                          
                                                                               
  The  meeting  was   teleconferenced  to  Anchorage,  Barrow,                 
  Glennallen, Nome, and Valdez.                                                
                                                                               
                                                                               
  HCR  1 -  LONG RANGE FINANCIAL PLANNING COMMISSION                           
                                                                               
            Discussion   was   had   with    Senator   Pearce,                 
            Representative  Phillips,  Pat  Pourchot, and  Pam                 
            Neal.       An   amendment   suggested    by   the                 
            administration  was  moved by  Senator  Donley but                 
            failed on a vote of 5 to 2.  SCS CSHCR 1 (STA) was                 
            REPORTED OUT of committee with a $51.3 fiscal note                 
            from the Legislative Affairs Agency.                               
                                                                               
                                                                               
  HJR  7 -  EXPORT OF ALASKA OIL                                               
                                                                               
            Brief  testimony  was presented  by Representative                 
            Finkelstein.  CSHJR 7 (O&G)am  was REPORTED OUT of                 
            committee with a  zero fiscal note from  the Dept.                 
            of Natural Resources and a note  from the Dept. of                 
            Revenue showing potential revenues of $80 million.                 
                                                                               
                                                                               
  SB  19 -  LEGISLATIVE SESSIONS TO BE IN ANCHORAGE                            
                                                                               
            Testimony was  presented by  Jamie Parsons,  Chuck                 
            Achberger, and Chip Wagoner.  The sponsor directed                 
            attention  to  a  proposed   committee  substitute                 
            adding a relocation commission.  The bill was HELD                 
            in committee for continuing work on fiscal notes.                  
                                                                               
                                                                               
  SB  47 -  APUC EXTENSION AND REGULATORY COST CHARGE                          
                                                                               
            Testimony was presented by Josh Fink, Don Schroer,                 
            Bob Lohr, Jimmy  Jackson, and Dave Hutchens.   The                 
            bill was HELD in committee  for scheduling on next                 
            week's agenda.                                                     
                                                                               
                                                                               
  CS FOR HOUSE JOINT RESOLUTION NO. 7(O&G) am                                  
                                                                               
       Supporting  the lifting  of the  ban on  the export  of                 
       Alaska  North Slope crude oil, requesting the President                 
       of the  United States to  present to the  United States                 
       Congress  a  recommendation  that  it  is both  in  the                 
       national  interest to  lift the  ban on  the  export of                 
       Alaska North Slope crude oil  and discriminatory to the                 
       state to  maintain the  ban, and  endorsing passage  of                 
       H.R. 70  and S.  70, companion  federal legislation  to                 
       remove restraints on the export of that oil.                            
                                                                               
  Co-chairman Halford directed that CSHJR 7 (O&G)am be brought                 
  on  for discussion.    REPRESENTATIVE FINKELSTEIN,  sponsor,                 
  came before committee.   He noted that the  proposed lifting                 
  of the  ban on export  of Alaska North  Slope crude  oil had                 
  been  before   previous  legislatures.     The   climate  in                 
  Washington, D.C., at  this time, however, appears  right for                 
  favorable  consideration.   Language  in  the  resolution is                 
  straightforward.   Projected revenues  reflect figures  from                 
  reports over the past few years.                                             
                                                                               
  Co-chairman Halford  called for comments  or questions  from                 
  committee members.  None were forthcoming.  Senator Phillips                 
                                                                               
                                                                               
  MOVED  that  CSHJR  7  (O&G)am  pass  from  committee.    No                 
  objection having been  raised, CSHJR 7 (O&G)am  was REPORTED                 
  OUT of committee  with a zero fiscal note  from the Dept. of                 
  Natural  Resources  and a  note  from the  Dept.  of Revenue                 
  showing  projected  revenues of  $80  million.   All members                 
  signed the committee report with a "do pass" recommendation.                 
                                                                               
                                                                               
  CS FOR HOUSE CONCURRENT RESOLUTION NO. 1(FIN)                                
                                                                               
       Creating the Long Range Financial Planning Commission.                  
                                                                               
  SENATE  PRESIDENT  DRUE  PEARCE  came before  committee  and                 
  directed attention to SCS  CSHCR 1 (STA).  She  referenced a                 
  recommendation  from  Commonwealth  North  for  a  statewide                 
  effort involving  Alaskan citizens  in long-range  financial                 
  planning.  She further stressed need for a "soft landing" as                 
  Prudhoe  Bay revenues fall and  the state faces "huge budget                 
  deficits over the next ten years."                                           
                                                                               
  The   resolution   would   create   a  balanced,   statewide                 
  commission.  Pages 2  (lines 25-29) and 3 (through  line 24)                 
  present specific  areas of  commission review.   The  Senate                 
  State Affairs' version calls for nine public members:                        
                                                                               
       1.   Three chosen by the Speaker of the House                           
       2.   Three chosen by the Senate President                               
       3.   Three chosen by the Governor                                       
                                                                               
  The House-passed  version required unanimous consent  by the                 
  Governor,  Speaker,  and  Senate  President  for  all   nine                 
  members.   Concern arose that  that type of  consensus would                 
  involve a difficult  and lengthy  selection process and  not                 
  provide the needed  wide range  of diversification.   Senate                 
  State Affairs added a  provision requiring that  legislative                 
  appointments by  both the  House and  Senate consist of  one                 
  member of the majority and one member of the minority.                       
                                                                               
  Senator Pearce acknowledged  that work  to be undertaken  by                 
  the commission should be done by  the legislature.  She then                 
  added that a long-range plan could probably not be developed                 
  without participation by  the public.  The  resolution would                 
  allow the legislature to work with the public on development                 
  of new ideas for future budgeting.   Senator Pearce spoke to                 
  constituent concern that the state does not presently have a                 
  budgetary plan.  She referenced the Cremo Plan and the "safe                 
  landing  plan"  proposed  by  ISER.    There   has  been  no                 
  opportunity for review and discussion of these plans by  the                 
  public.                                                                      
                                                                               
  The  resolution  passed the  House  on a  vote  of 37  to 1.                 
  Senator Pearce noted support by the Alaska Municipal League,                 
  Alaska State Chamber  of Commerce, Common Sense  for Alaska,                 
                                                                               
                                                                               
  the National Federation of  Independent Businesses, Resource                 
  Development Council, etc.                                                    
                                                                               
  Senator   Zharoff   referenced   fiscal   note   information                 
  indicating  that  public  members  would  be  selected  from                 
  Fairbanks,  Anchorage,   and  Southeast.     Senator  Pearce                 
  explained that since  there is  no way  to anticipate  where                 
  public members  might come  from, a  regional diversity  was                 
  simply set  forth  by Legislative  Affairs.   She  said  she                 
  expected rural  members would  participate and  advised that                 
  the fiscal note could be revised to show membership from the                 
  four judicial  districts, if  that would  provide a  greater                 
  level  of  comfort.    Senator  Zharoff  stressed  need  for                 
  participation by people from rural Alaska.                                   
                                                                               
  Discussion followed regarding identification  of anticipated                 
  fiscal gaps and recurring revenue and expenditures.  Senator                 
  Pearce   spoke  to   projections   by  the   administration,                 
  Legislative Finance Division, the Oil  and Gas Division with                 
  the Dept. of Revenue, etc.                                                   
                                                                               
  REPRESENTATIVE   GAIL   PHILLIPS,   sponsor,   came   before                 
  committee.   In response to a question from Senator Zharoff,                 
  she  spoke  to need  for  involvement  of more  public  than                 
  legislative members.  A total of  nine was selected to "keep                 
  the committee from getting too big."  Senator  Zharoff asked                 
  how the public  members would  be selected.   Representative                 
  Phillips referenced lists  of people who have  been involved                 
  in state financial planning for some time as well as experts                 
  and volunteers.                                                              
                                                                               
  Senator Halford expressed his hope that membership would not                 
  be   weighted   toward   direct  or   significant   indirect                 
  beneficiaries of state spending.  More general beneficiaries                 
  should be well represented.                                                  
                                                                               
  Senator Rieger  voiced  support for  the resolution,  saying                 
  that  it  would  create  a  mechanism for  protecting  state                 
  reserves such as the earnings  of the permanent fund,  AHFC,                 
  AIDEA, etc.                                                                  
                                                                               
  PAT POURCHOT, Legislative Director, Office  of the Governor,                 
  next came before committee.  He  voiced support for the idea                 
  of  a  long-range  fiscal  planning  commission,  but  noted                 
  disagreement  regarding composition  of  the  members.   All                 
  members must have equal involvement in the process to ensure                 
  both the  function and credibility  of the commission.   The                 
  Governor's position is  that commission members  should work                 
  toward  consensus  and  avoid vote  count  situations.   The                 
  proposed fifteen-member commission could lead to an eight to                 
  seven  configuration.    Mr.  Pourchot  proposed   that  the                 
  commission consist of a structure that  does not include the                 
  typical tie-breaking vote.   He noted that when the  vote is                 
  eight  to  seven,  the  credibility  of commission  work  is                 
                                                                               
                                                                               
  greatly weakened.  He  pointed to an even number  of members                 
  on the PERS and TRS investment board and even representation                 
  of management and  employee interests.   In that  situation,                 
  members are forced to work together to reach consensus.  Mr.                 
  Pourchot  suggested  addition  of  another  public   member,                 
  appointed  by the Governor, for a sixteen-member commission,                 
  including  ten  public  members:    four  appointed  by  the                 
  Governor, three  by the Senate, and three  by the House.  He                 
  cautioned that lessening the Governor's role in selection of                 
  commission members might  force him  into a "less  proactive                 
  role in the ultimate recommendations of the commission."                     
                                                                               
  PAM NEAL, Alaska State Chamber of Commerce, next came before                 
  committee.    She  told  the   committee  that  the  chamber                 
  represents  approximately  700 businesses,  employing 80,000                 
  people.  She voiced support for the resolution and said that                 
  reduction  in   state  spending  and   long-range  financial                 
  planning  are   the  first  priorities   on  the   chamber's                 
  legislative  agenda.    The  chamber  is less  concerned  by                 
  composition of the  commission than the requirement  that it                 
  include:                                                                     
                                                                               
       1.   Statewide representation.                                          
       2.   Representatives   of   beneficiaries    of   state                 
  spending.                                                                    
       3.   Representatives of providers of state revenue (the                 
            business community).                                               
                                                                               
  Speaking to questions regarding need for the commission, Ms.                 
  Neal stressed that it would "help get this process rolling .                 
  .  . get something on the table that everybody can look at."                 
                                                                               
                                                                               
  Referencing commission costs,  Ms. Neal noted  that planning                 
  is  a  necessary  and  beneficial  process in  the  business                 
  community.  It thus justifies the expense.  The $51.3 fiscal                 
  note  is a  small  price  to pay  for  a solution  to  state                 
  deficits.                                                                    
                                                                               
  Co-chairman Halford  called for additional testimony  on the                 
  resolution.  None was forthcoming.  Senator Donley MOVED for                 
  adoption of the amendment suggested by the administration:                   
                                                                               
       Page 2, Line 6:                                                         
                                                                               
            Change  "nine  members  of  the  public"  to  "ten                 
  members                                                                      
            of the public"                                                     
                                                                               
       Page 2, Line 8:                                                         
                                                                               
            Change  "three"   to  "four"   appointed  by   the                 
  Governor.                                                                    
                                                                               
                                                                               
       Page 2, Lines 7 and 8:                                                  
                                                                               
            Include language specifying appointment of three                   
            public  members,  each,  by  both  the  Senate and                 
            House.                                                             
                                                                               
  End:      SFC-95, #3, Side 1                                                 
  Begin:    SFC-95, #3, Side 2                                                 
                                                                               
  Senator Rieger voiced support for the resolution without the                 
  proposed amendment.  Senator Zharoff spoke in support of the                 
  change, stressing need for  the sixteen-member commission to                 
  reach consensus.   Co-chairman Halford called for  a show of                 
  hands on the motion.  The motion FAILED on a vote of 2 to 5.                 
                                                                               
                                                                               
  Senator Rieger  MOVED  that  SCS  CSHCR 1  (STA)  pass  from                 
  committee  with individual  recommendations.   No  objection                 
  having been raised,  SCS CSHCR 1  (STA) was REPORTED OUT  of                 
  committee  with  a $51.3  fiscal  note from  the Legislative                 
  Affairs Agency.   Co-chairman Frank and Senators  Rieger and                 
  Sharp  signed  the   committee  report  with  a   "do  pass"                 
  recommendation.  Co-chairman Halford and Senators Donley and                 
  Zharoff signed "no recommendation."  Senator Phillips signed                 
  "do not pass."                                                               
                                                                               
                                                                               
  SENATE BILL NO. 47                                                           
                                                                               
       An  Act  relating to  the  extent to  which  the Alaska                 
       Public  Utilities Commission  may  exercise its  powers                 
       when  regulating  utilities; establishing  a regulatory                 
       cost  charge on public utilities and pipeline carriers;                 
       relating to the allocation of  costs in hearings before                 
       the Alaska Public Utilities Commission; relating to the                 
       method by which  utilities are  exempted from and  made                 
       subject to  regulation by  the Alaska  Public Utilities                 
       Commission;  relating  to  the monetary  threshold  for                 
       regulation of certain kinds of  utilities by the Alaska                 
       Public  Utilities  Commission;  extending   the  Alaska                 
       Public  Utilities  Commission;  relating  to  staggered                 
       terms  for  members  of  the  Alaska  Public  Utilities                 
       Commission; and providing for an effective date.                        
                                                                               
  Co-chairman Halford directed  that SB 47  be brought on  for                 
  discussion.  JOSH  FINK, aide to Senator  Kelly, came before                 
  committee.  He  directed attention  to a sectional  analysis                 
  prepared by Senator Kelly, sponsor, and a separate sectional                 
  prepared by Legislative  Legal Services.  He  explained that                 
  SB 47  reflects reintroduction of  SB 213 from  the previous                 
  legislature.  It accomplishes two goals:                                     
                                                                               
       1.   Extension   of   the   Alaska   Public   Utilities                 
                                                                               
                                                                               
  Commission                                                                   
            currently scheduled  to  sunset the  end of  June,                 
            1995.                                                              
                                                                               
       2.   Reenactment  of the  regulatory  cost charge  that                 
  expired                                                                      
            December 31, 1994.                                                 
                                                                               
  Given  the unknown and  potentially serious ramifications of                 
  expiration  of  APUC,  SB  47  was introduced  as  consensus                 
  legislation.   All provisions have  been extensively debated                 
  and are either unopposed or the  result of compromise by all                 
  concerned  parties,  in   the  best  interest   of  consumer                 
  protection.  SB 47  is almost identical to the  version that                 
  reached the House floor last May and failed to pass prior to                 
  adjournment.                                                                 
                                                                               
  A separate bill  including further APUC amendments  has also                 
  been introduced.  It is Senator Kelly's hope that SB 47 will                 
  remain unamended  as  it  travels  through  the  legislative                 
  process.                                                                     
                                                                               
  Mr.  Fink  provided  a  review  of the  sponsor's  sectional                 
  analysis  (copy on  file  in the  SFC  file for  SB 47)  and                 
  highlighted the following provisions:                                        
                                                                               
       1.   Sec. 1  replaces language granting  the commission                 
            "liberally   construed"   powers   with   language                 
            allowing  the   commission  to   do  "all   things                 
            necessary or proper to carry  out the purposes and                 
            exercise   the   powers   expressly   granted   or                 
            reasonably  implied."    The   foregoing  reflects                 
            compromise language developed last year.                           
                                                                               
       2.   Secs. 2, 3, 10 and 11 reenact the  regulation cost                 
  charge                                                                       
            for utilities and pipelines.  Reenactment does not                 
            include  sunset provisions.    The  RCC should  be                 
            considered  when  the  commission  "comes  up  for                 
            sunset."                                                           
                                                                               
       3.   On   Page  3,   Lines  11-13,   provisions  adjust                 
  allocation of                                                                
            the RCC for electric utilities by  subtracting the                 
            cost of power from gross revenues.                                 
                                                                               
       4.   On Page 2, Line 27 and Page 6, Line 4, the ceiling                 
  on the                                                                       
            RCC for utilities and pipeline  carriers is raised                 
            from .61 % to .8 %.  The RCC has never reached the                 
            ceiling.  If the cost  of power is subtracted from                 
            gross revenues for electric utilities, the ceiling                 
            for   other  utilities   must   be  increased   or                 
            sufficient program receipts  will not be generated                 
                                                                               
                                                                               
            to cover the commission budget.                                    
                                                                               
       5.   Page  3,  Lines  20-24 and  Page  6,  Lines 15-19,                 
  contain        language    requiring     the    Dept.     of                 
                 Administration  to  earmark  regulatory  cost                 
                 charge  collection   overages  for   possible                 
                 appropriation  by  the  legislature  for  the                 
                 commission's next fiscal year,  thus lowering                 
                 the RCC for that year.  That charge is passed                 
                 directly  to  consumers   and  averages   $10                 
                 annually, for all utilities.                                  
                                                                               
       6.   Secs. 4, 5, 6, 7, 8, and 9 are the result of audit                 
            recommendations.    Secs.  4,  8,   and  9  permit                 
            subscribers of small utilities or utilities exempt                 
            from regulation to  petition for regulation  under                 
            the  same  procedures  used by  subscribers  of  a                 
            regulated  utility to  petition  for removal  from                 
            regulation.                                                        
                                                                               
       7.   Sec. 12 extends the sunset date for the commission                 
  to                                                                           
            June 30, 1999.                                                     
                                                                               
       8.   Sec. 13 staggers the terms of commission  members.                 
  Two                                                                          
            terms  presently expire at the same time.  The new                 
            provision  will  not impact  the terms  of current                 
            commissioners.                                                     
                                                                               
       9.   Secs. 14 and  15 provide for new  language enacted                 
  in                                                                           
            Sec.   1   (changing   language  from   "liberally                 
            construed"  to  "reasonably  implied")  to  become                 
            effective July 1, 1996.                                            
                                                                               
       10.   Sec. 16 provides  an immediate effective date for                 
  all                                                                          
            provisions with the exception of Sec. 1.                           
                                                                               
  Senator  Donley voiced concern over the above-noted language                 
  change in Sec. 1, suggesting that it would lead to increased                 
  litigation over the meaning of the  new standard.  Consumers                 
  will  pay  the  cost of  that  litigation  through increased                 
  utility bills.   He then inquired concerning why  the change                 
  was made.   Mr. Fink  deferred to  APUC staff.   He  briefly                 
  referenced situations in which utilities felt the commission                 
  overstepped its authority  and made policy  decisions beyond                 
  its statutory mandate.  Alternatively,  other utilities were                 
  pleased that the commission had authority to grant temporary                 
  operating permits,  a function  for which  it does  not have                 
  express authority.   Compromise  language is  "a shade  more                 
  restrictive."     Senator  Sharp attested  to the  fact that                 
  under  "liberally  construed,"  commission philosophy  often                 
                                                                               
                                                                               
  swung  in accordance  with the  make up  of  the commission.                 
  Administrative   and   court   challenges   are   expensive.                 
  "Necessary and proper"  is better, particularly in  light of                 
  provisions  which allow  the commission to  levy the  RCC to                 
  cover its budget  expenses.   Senator Rieger voiced  support                 
  for the more  moderate language.   Senator Donley  cautioned                 
  that  new  language   appears  "ripe   with  potential   for                 
  litigation."                                                                 
                                                                               
  Co-chairman Halford voiced his understanding that should the                 
  proposed  bill  not  pass,    utility bills  would  decrease                 
  because the RCC  would not be  applied.  Mr. Fink  concurred                 
  that individual bills  would decrease by  approximately $10.                 
  He  pointed,  however, to  federal mandates  associated with                 
  utilities  and  suggested  that  staff  from APUC  speak  to                 
  potential problems should APUC cease to exist.                               
                                                                               
  Senator Donley next  addressed statements  by Mr. Fink  that                 
  reenactment of the  RCC reflects  a compromise, noting  that                 
  while it might represent a compromise among utilities, it is                 
  not a compromise "among the consumers."  He then attested to                 
  constituent complaints  over new  charges on utility  bills.                 
  The situation is worsened by  the proposed legislation which                 
  enacts the "first,  new tax  bill of this  year."   Further,                 
  restructuring  increases the  tax  for urban  residents more                 
  than for those in rural Alaska.                                              
                                                                               
  DON SCHROER, Alaska Public Utilities  Commission, next spoke                 
  via  teleconference  from  Anchorage.     He  stressed   the                 
  importance of early  action on  SB 47, and  noted the  audit                 
  recommendation   for   a  ten-year   extension,   since  the                 
  commission is  fulfilling its  public purpose.   During  the                 
  past  two  years, no  one  has  testified in  favor  of APUC                 
  sunset.    Mr.  Schroer  acknowledged  that SB  47  contains                 
  provisions  the  commission could  "live  without."   It is,                 
  however, supported in  its present form, in the  interest of                 
  the impending time crunch.                                                   
                                                                               
  Mr.  Schroer  further  spoke  to  investigative  delays  and                 
  uncertainty in APUC hire as a result of scheduled sunset.                    
                                                                               
  He thanked utilities  for their  cooperation through  early,                 
  lump-sum  payment  of   the  RCC  prior  to   expiration  of                 
  commission  authority to levy the charge.   He urged passage                 
  of SB 47 without amendment.                                                  
                                                                               
  In  response   to  a   question  from   Co-chairman  Halford                 
  concerning  areas of the  bill the commission  does not look                 
  favorably  upon,  Mr.   Schroer  replied   that  while   the                 
  commission sees no  need to change "liberally  construed" to                 
  the proposed new language, the change is acceptable.                         
                                                                               
  Discussion followed regarding  ability of  a utility to  opt                 
  out  of  APUC  regulation.   BOB  LOHR,  Executive Director,                 
                                                                               
                                                                               
  Alaska   Public   Utilities   Commission,   testified   from                 
  Anchorage.  He explained that a  number of utilities may not                 
  opt  out of economic  regulation because of  size.  Proposed                 
  changes in  the bill would increase the  number of utilities                 
  allowed  to  do  so,  but  maximum size  prohibitions  would                 
  remain.   Cooperatives may opt  out regardless of  size, and                 
  municipal  utilities  are  exempt  from regulation  by  law,                 
  unless the municipal utility competes with a privately owned                 
  utility.   If  one  of a  number  of utilities  owned  by  a                 
  municipality elects to  compete with a private  utility, all                 
  of the utilities owned by the municipality are automatically                 
  subject to economic regulation by the commission.                            
                                                                               
  Senator Zharoff commented  upon the amount of  paperwork and                 
  duplication  in   state  and   federal  filings  for   small                 
  utilities.    Mr.  Schroer  attested  to recent  regulations                 
  allowing  simplified  rate  filings for  both  electric  and                 
  telephone utilities.                                                         
                                                                               
  JIMMY JACKSON, Attorney for GCI,  next spoke from Anchorage.                 
  He voiced support for passage of the  legislation as quickly                 
  as  possible,  without  amendment.    The present  state  of                 
  "limbo" is undesirable and imposing an adverse affect on the                 
  agency.                                                                      
                                                                               
  DAVE  HUTCHENS, Executive  Director,  Alaska Rural  Electric                 
  Cooperative Association, next came before committee, voicing                 
  support for the legislation.   He attested to the  fact that                 
  the commission  should be extended  for the same  reasons it                 
  was initially  created:   to  prohibit  territorial  utility                 
  wars, which  are both  wasteful and  destructive, and  bring                 
  peace  in  the  electric  utility  industry.   Mr.  Hutchens                 
  reiterated previous testimony asking that SB 47 be passed in                 
  its present form, without amendments.                                        
                                                                               
  Speaking to language  in Sec. 1, Mr. Hutchens  advocated the                 
  change from "liberally construed" to  "necessary or proper .                 
  . . or reasonably  implied."  In response to a question from                 
  Co-chairman Halford,  Mr. Hutchens voiced  his understanding                 
  that new language means that the commission cannot embark on                 
  new  kinds   of  regulation   which  "liberally   construed"                 
  previously allowed.  As an  example, he cited application by                 
  the community of  King Cove  and the resulting  three-to-two                 
  vote  by  the  commission  regarding  whether  environmental                 
  issues and regulations should  be included in deliberations.                 
  The  community and AIDEA prevailed,  but the vote was close.                 
  With different  members on  the commission,  the vote  could                 
  easily have gone the other way.  The supreme court supported                 
  the commission exclusion, but the  ruling was accompanied by                 
  a long dissenting  opinion.  That  is the type of  situation                 
  the  new language seeks  to prevent.   If there is  to be an                 
  expansion of commission powers, that decision should be made                 
  by  the  legislature  rather  than  the commission  and  the                 
  courts.                                                                      
                                                                               
                                                                               
  Co-chairman  Halford  asked  if the  APUC  would  come under                 
  standard   statutory   language  (reasonably   necessary  to                 
  implement the  statute) if  there was  no specific  language                 
  relating to regulatory  standards for  the commission.   Mr.                 
  Hutchens responded affirmatively  and said that was  what he                 
  originally  proposed.     Changes  within  Sec.  1   reflect                 
  compromise language  modeled on  wording from  the state  of                 
  Wisconsin.                                                                   
                                                                               
  Mr. Hutchens  next addressed adjustments  to the  regulatory                 
  cost charge.  He voiced  concurrence in comments by  Senator                 
  Donley and agreed that utilities do not enjoy serving as tax                 
  collectors.    However, if  the  decision is  that utilities                 
  should play  that role, the  burden of collection  should be                 
  equitably  distributed.    An  adjustment  was  the  primary                 
  recommendation of legislative  audit.   The proposal was  to                 
  allocate  the  RCC  based  on  time records  evidencing  how                 
  commission time is  expended on  regulation.  That  approach                 
  was  determined to  be too  time consuming.      The present                 
  formula keys the RCC to retail revenues, but revenue dollars                 
  have no real  relationship to commission activities.   While                 
  electric utility  regulation  comprises  30%  of  commission                 
  activity, electric utilities were paying  45% of the cost of                 
  the commission.   The proposal  contained within  SB 47  was                 
  crafted by Senator Sharp  as a means of providing  equity in                 
  allocation of regulatory costs.                                              
                                                                               
  Co-chairman Halford asked if cost  charges would increase in                 
  Anchorage while decreasing in other locations.  Mr. Hutchens                 
  responded, "Perhaps, very  slightly . .  . ."   Reallocation                 
  could have  that effect because of availability of heat from                 
  a regulated natural gas utility.   In other areas, providers                 
  of heat are  unregulated and thus  not taxed to support  the                 
  commission.                                                                  
                                                                               
  Senator  Zharoff  sought  clarification  of  the  impact  of                 
  increasing the RCC rate.  Mr. Lohr explained that the effect                 
  of  allowing   the  cost-of-power  exclusion   for  electric                 
  utilities  shifts  approximately  45%  of  the cost  of  the                 
  commission to  all other utilities.  Since the commission is                 
  mandated to collect  its operating  budget from all  sources                 
  subject to  the RCC,  a reduction  for one  type of  utility                 
  requires a commensurate increase for others.  RCC  rates for                 
  utilities other than electrical will increase by roughly 31%                 
  to  offset the  45% reduction  to electric  utilities.   The                 
  commission  is   only  authorized  to  collect   the  amount                 
  necessary to cover its budget.  Mr. Lohr reiterated that the                 
  RCC has never  hit the existing  ceiling.  The initial  rate                 
  equivalent of .45% has dropped since inception.  It was .42%                 
  last  year.    While  the   trend  has  been  downward,  the                 
  commission seeks to  maintain  latitude within  the ceiling,                 
  in  light  of  proposed  changes  in  levies  upon  electric                 
  utilities.                                                                   
                                                                               
                                                                               
  Discussion followed  between  APUC staff  in  Anchorage  and                 
  Senator Rieger  regarding activity (brush clearing  and tree                 
  removal)                                                                     
  in utility right-of-ways.                                                    
                                                                               
  End:      SFC-95, #3, Side 2                                                 
  Begin:    SFC-95, #5, Side 1                                                 
                                                                               
  Co-chairman Halford  called for additional testimony  on the                 
  bill.    None was  forthcoming.   He  then advised  that the                 
  testimony  portion of  committee  review  was concluded  and                 
  directed that SB 47  be HELD in committee and  available for                 
  further consideration during the coming week.                                
                                                                               
                                                                               
  SPONSOR SUBSTITUTE FOR SENATE BILL NO. 19                                    
                                                                               
       An Act relating to the location of the convening of the                 
       legislature in regular session.                                         
                                                                               
  Co-chairman Halford  directed that SSSB 19 be brought on for                 
  discussion.    Senator  Randy  Phillips  explained  that  he                 
  introduced the proposed  bill to  move the legislature  from                 
  Juneau to Anchorage to  improve access to the capital.   The                 
  move  would be concluded by January, 1998.  Senator Phillips                 
  referenced a draft CSSSSB 19  (9-LS0288\F, Cook, 2/3/95) and                 
  explained  that  it provides  for  establishment of  a state                 
  government relocation  commission.   By March  1, 1996,  the                 
  commission  would  submit  a  report  of  relocation  costs,                 
  including  the  amount of  bondable  costs subject  to voter                 
  approval under AS 44.06.055.  Senator Phillips stressed that                 
  the main purpose of  the bill is access.   Proposed movement                 
  of the legislature, alone, should  not devastate the economy                 
  of Juneau.   The Senator further stressed the  importance of                 
  face-to-face   rather   than   teleconference    access   by                 
  constituents.  He then  said he would request that  the bill                 
  be held in committee pending additional work on fiscal notes                 
  as well as a comparison of costs of retaining the capital in                 
  Juneau versus moving it to Anchorage.                                        
                                                                               
  JAMIE PARSONS, former mayor of Juneau, came before committee                 
  in opposition to SSSB 19, which he termed "nothing more than                 
  a  back  door capital  move."    Three  months ago,  Alaskan                 
  residents voted  by a  9.4% margin  against movement of  the                 
  capital  from Juneau  to Wasilla.   Mr.  Parsons pointed  to                 
  Juneau's  efforts to provide excellent health, police, fire,                 
  emergency, and recreational services.   He acknowledged that                 
  the recent  capital move  campaign pointed out  improvements                 
  that should be made  to make government work better  for all                 
  Alaskans.   The statewide  Alaska Committee,  which led  the                 
  campaign to keep the capital in Juneau, is in the process of                 
  converting to a statewide,  nonprofit organization to follow                 
                                                                               
                                                                               
  up on  those  improvements.   Mr.  Parsons  asked  that  the                 
  legislature give Juneau  a few years to  address issues such                 
  as   housing,   electronic  and   telecommunication  access,                 
  improved  air  and  land access.    He  next  spoke to  more                 
  important  issues  facing  the   state:    budget  deficits,                 
  declining   revenues,   reduced   Prudhoe  Bay   production,                 
  increasing demand  for services  as a  result of  population                 
  growth, crime, educational standards, etc.                                   
                                                                               
  CHUCK ACHBERGER, Director, Juneau  Chamber of Commerce, next                 
  came  before  committee  in  opposition to  the  bill.    He                 
  attested   to  access   to   legislative  activity   through                 
  telecommunications.    The   electronic  data  base   allows                 
  Alaskans  free  telephone  access to  the  status  of bills,                 
  committee action, etc.                                                       
                                                                               
  Mr.  Achberger   advised  that  he  accessed   fiscal  notes                 
  accompanying SSSB 19.  He then spoke to past experience with                 
  the fiscal note  associated with movement of  the Governor's                 
  office  from  the  capitol  building   to  the  Court  Plaza                 
  Building.  The initial  note was $400.0.  Six  months later,                 
  the note for what  was essentially a move across  the street                 
  had escalated to $2 million.                                                 
                                                                               
  In his closing  remarks, Mr.  Achberger advised that  Juneau                 
  residents  fought  hard  to  retain  the  capital,  and  the                 
  community  made a number  of promises for  improvements.  He                 
  asked  that Juneau be given  time to fulfill those promises.                 
  Mr.  Achberger  took  exception to  the  statement  that the                 
  proposed move would not have  an adverse economic impact  on                 
  Juneau.    He  noted  that  legislative  housing  and  other                 
  residential and  commercial  construction  would  not  occur                 
  while SSSB 19 remains a threat.                                              
                                                                               
  Senator  Phillips voiced  his  recollection that  escalating                 
  costs associated with  the proposed  move of the  Governor's                 
  office resulted from needed code upgrades at the Court Plaza                 
  Building.                                                                    
                                                                               
  Co-chairman Halford asked  Mr. Achberger if he  would prefer                 
  the bill to  go to the floor for a definitive vote or remain                 
  in  committee where  it would  be potentially  viable.   Mr.                 
  Achberger said that  his first  choice was for  the bill  to                 
  cease to exist.  He then  expressed his second choice:  that                 
  the  bill remain in committee until final adjournment.  That                 
  would give Juneau time to work  on access problems and other                 
  improvements.                                                                
                                                                               
  Senator Phillips stressed that the proposed legislation does                 
  not  represent  a   personal  crusade.     He  attested   to                 
  constituents in his district who continually  complain about                 
  lack of access.   They voted "two out of three"  to move the                 
  entire  capital.   A  number of  those constituents  are not                 
  happy with the proposed move of  only the legislature.  Lack                 
                                                                               
                                                                               
  of access is a valid concern.  Mr. Achberger replied that he                 
  did not view  the proposed legislation as  a personal attach                 
  on Juneau.  However,  those whose jobs are impacted  are not                 
  likely to  feel the  same.   He again asked  that Juneau  be                 
  given time to work  on access.  Mr. Achberger  stressed that                 
  legislators are within  their districts seven months  of the                 
  year.    It  is  not  difficult   for  constituents  to  get                 
  appointments during that time.                                               
                                                                               
  CHIP WAGONER next came before committee, advising that he is                 
  both a  republican and a  Juneau resident.   He acknowledged                 
  that the proposed legislation does  not represent a personal                 
  crusade  concerning Juneau  but a crusade  for access.   Mr.                 
  Wagoner stressed,  however, that  access is  not a  "burning                 
  issue."  Voters  dealt with the  issue in the last  election                 
  when movement of the capital was defeated.  He observed that                 
  the proposed bill  represents a  capital move regardless  of                 
  how it is characterized.   Other issues are of  much greater                 
  importance  to Alaskans.   Mr.  Wagoner stressed  that  as a                 
  republican he  seeks  success  for  the  current  republican                 
  leadership in  both  the House  and Senate.   To  accomplish                 
  that,  the leadership  must deal with  issues of  concern to                 
  Alaskans.  The first of those concerns  is the budget.  Less                 
  time should  be expended on  bills such as SSSB  19 and more                 
  effort devoted  to deferred maintenance  at the  university,                 
  fishing issues, mining, timber, tourism, etc.  He urged that                 
  the republican caucus focus on voter concerns and ignore the                 
  proposed legislative  move.   Mr. Wagoner  next attested  to                 
  electronic filing of legislation, and access thereto, at the                 
  national  level.  He  suggested that the  average voter does                 
  not want to physically  come before committee so much  as to                 
  be able to  access the legislature from his or her own home.                 
  He urged support  for increased electronic access.   Senator                 
  Phillips  again  stressed the  importance  of access  to his                 
  constituents.  Mr. Wagoner reiterated  that there are issues                 
  of much greater importance facing the present legislature.                   
                                                                               
  ADJOURNMENT                                                                  
                                                                               
  The meeting was adjourned at approximately 11:00 a.m.                        
                                                                               

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