Legislature(1999 - 2000)

05/10/1999 09:10 AM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
MINUTES                                                                                                                         
SENATE FINANCE COMMITTEE                                                                                                        
May 10, 1999                                                                                                                    
9:10 AM                                                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                           
                                                                                                                                
SFC-99 # 131, Sides A and B                                                                                                     
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair John Torgerson convened the meeting at                                                                                 
approximately 9:10 A.M.                                                                                                         
                                                                                                                                
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
In addition to Co-chair Torgerson, Senators Sean Parnell,                                                                       
Randy Phillips, Gary Wilken, Lyda Green and Al Adams were                                                                       
present when the committee was convened.  Senator Loren                                                                         
Leman arrived shortly thereafter.  Senators Dave Donley and                                                                     
Pete Kelly arrived at approximately 10:00 A.M.                                                                                  
                                                                                                                                
Also Attending:  BRUCE CAMPBELL, staff to Senator Randy                                                                         
Phillips; JACK KREINHEDER, Senior Policy Analyst, Office                                                                        
Management and Budget; MARY JACKSON, staff to Senator John                                                                      
Torgerson; LAMAR COTTEN, Deputy Commissioner, Department of                                                                     
Community and Regional Affairs; DICK EMMERMAN, Planner IV,                                                                      
Division of Energy, Department of Community and Regional                                                                        
Affairs; aides to committee members and other members of                                                                        
the Legislature.                                                                                                                
                                                                                                                                
Attending via Teleconference: RANDY SIMMONS, Executive                                                                          
Director, Alaska Industrial Development and Export                                                                              
Authority, offnet Anchorage                                                                                                     
                                                                                                                                
                                                                                                                                
SUMMARY INFORMATION                                                                                                             
                                                                                                                                
Co-chair Torgerson convened the committee at approximately                                                                      
9:10 a.m.  He advised the committee that they would first                                                                       
hear SB 169 and then come back to SB 157.                                                                                       
                                                                                                                                
                                                                                                                                
SENATE BILL NO. 169                                                                                                             
                                                                                                                                
"An Act relating to missions and measures to be                                                                                 
applied to certain expenditures by the executive                                                                                
branch of state government and the University of                                                                                
Alaska from the state operating budget for the fiscal                                                                           
year ending June 30, 2000; and providing for an                                                                                 
effective date."                                                                                                                
                                                                                                                                
                                                                                                                                
Senator Parnell explained SB 169.  He said there were                                                                           
several amendments to be submitted by himself and other                                                                         
members.                                                                                                                        
                                                                                                                                
Senator Parnell MOVED amendment #1.  He offered a brief                                                                         
explanation.  WITHOUT OBJECTION it was ADOPTED.                                                                                 
                                                                                                                                
Senator Parnell MOVED amendment #2 on behalf of Senator                                                                         
Leman.  He offered a brief explanation.  Senator Adams                                                                          
queried the intent.   He said the language in amendment #2                                                                      
would jeopardize the bill.                                                                                                      
                                                                                                                                
(The arrival of Senator Leman was noted.)                                                                                       
                                                                                                                                
Senator Parnell asked Senator Leman to explain his intent                                                                       
to having this amendment included in the bill.                                                                                  
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Co-chair Torgerson reconvened the committee.                                                                                    
                                                                                                                                
Senator Parnell WITHDREW amendment #2.  WITHOUT OBJECTION                                                                       
it was WITHDRAWN.                                                                                                               
                                                                                                                                
Senator Parnell MOVED amendment #3.  He offered a brief                                                                         
explanation.  He MOVED an amendment to amendment #3, page                                                                       
1, line 18, to delete "achieving the mission of the mining                                                                      
sector".  Senator Adams asked about how the amendment would                                                                     
read with this deletion regarding page 2, line 21.  Senator                                                                     
Parnell explained this.  Co-chair Torgerson said he felt                                                                        
something should be deleted.  (There followed a brief                                                                           
discussion between Co-chair Torgerson and Senator Parnell.)                                                                     
                                                                                                                                
BRUCE CAMPBELL, staff to Senator Phillips was invited to                                                                        
join the committee.  He made a spelling correction page 1,                                                                      
line 18 and said "sector" should read "section".  Senator                                                                       
Parnell moved to WITHDRAW amendment to amendment #3.                                                                            
WITHOUT OBJECTION it was WITHDRAWN.  Senator PARNELL then                                                                       
moved amendment to amendment #3, page 1, line 18, delete                                                                        
"sector" and insert "section".  WITHOUT OBJECTION the                                                                           
amendment to amendment #3 was ADOPTED.  Further, WITHOUT                                                                        
OBJECTION amended amendment #3 was ADOPTED.                                                                                     
                                                                                                                                
Senator Parnell WITHDREW amendment #4.                                                                                          
                                                                                                                                
Senator Parnell MOVED amendment #5, page 10, line 7 of the                                                                      
bill.  Delete "more than 180 days;" and insert ";".                                                                             
WITOUTH OBJECTION it was ADOPTED.                                                                                               
                                                                                                                                
Senator Parnell MOVED amendment #6, page 2, line 9.  He                                                                         
explained all "DOA" reference from here and anywhere in the                                                                     
bill be conformed to read "ADMIN".  WITHOUT OBJECTION it                                                                        
was ADOPTED.                                                                                                                    
                                                                                                                                
JACK KREINHEDER, Senior Policy Analyst, Office of                                                                               
Management and Budget was invited to join the committee.                                                                        
He said they supported the bill.  He noted, however, some                                                                       
specific concerns by agencies.                                                                                                  
                                                                                                                                
Mr. Kreinheder asked about amendment #4, which had been                                                                         
withdrawn.  There was concern on page 27, regarding CSED.                                                                       
Senator Parnell said he chose not to move this amendment                                                                        
because it was included in SB 49.                                                                                               
                                                                                                                                
Senator Leman had brief comments.  Senator Parnell                                                                              
responded.  He said this would get as close as to how well                                                                      
CSED was serving the public.  Mr. Kreinheder said they                                                                          
would be happy to work with Senators Parnell and Leman                                                                          
regarding this matter.                                                                                                          
                                                                                                                                
Senator Parnell MOVED amendment #7, page 27, line 29 insert                                                                     
"and"; delete line 30 and renumber.  Senator Leman noted                                                                        
that he got many complaints in his office to Court orders.                                                                      
Mr. Kreinheder said this should be referred to CSED.  His                                                                       
impression was that the overall mechanism of error tracking                                                                     
is problematic within itself.  Their preference would be at                                                                     
this time to delete this wording.  Senator Leman said he                                                                        
would not object at this time, but that it was an area that                                                                     
needed to be worked on.                                                                                                         
                                                                                                                                
WITHOUT OBJECTION amendment #7 was ADOPTED.                                                                                     
                                                                                                                                
Mr. KREINHEDER noted concern with page 28, lines 14, the                                                                        
average time between notices of violation of Title 4.  The                                                                      
concern was with the workload.  Senator Parnell also shared                                                                     
the same concern.  It was his understanding this was a roll                                                                     
forward with language from SB 49.  He would have no problem                                                                     
with the deletion of this material as it was not an                                                                             
effective measure as currently drafted.  Senator Leman said                                                                     
he had no comment.                                                                                                              
                                                                                                                                
Senator Parnell MOVED amendment #8, page 28, to delete line                                                                     
14 and renumber accordingly.  WITHOUT OBJECTION it was                                                                          
ADOPTED.                                                                                                                        
                                                                                                                                
In response to a question by Senator Adams, Mr. Kreinheder                                                                      
said he felt in most cases the performance measures do not                                                                      
set out specific targets but rather a measure.  Therefore                                                                       
tracking a particular measure would be difficult.                                                                               
                                                                                                                                
Senator PARNELL moved CSSB 169 (FIN).  Senator Adams                                                                            
OBJECTED.  By a roll call vote of 6 yeas (Torgerson,                                                                            
Parnell, Leman, Wilken, Green, Phillips) and 1 nay (Adams)                                                                      
(Donley, P.Kelly absent) it was REPORTED OUT with                                                                               
individual recommendations and accompanying fiscal notes                                                                        
for all state agencies in the amount of zero.                                                                                   
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Co-chair Torgerson reconvened the committee at                                                                                  
approximately 10:05 A.M.  He called SB 157.                                                                                     
                                                                                                                                
                                                                                                                                
 SENATE BILL NO. 157                                                                                                            
                                                                                                                                
"An Act relating to power cost equalization; and                                                                                
providing for an effective date."                                                                                               
                                                                                                                                
                                                                                                                                
MARY JACKSON, staff to Senator John Torgerson was invited                                                                       
to join the committee.  She explained the new spreadsheets                                                                      
dated 10 May 1999.  At the request of Co-chair Torgerson                                                                        
she explained the Governor's Commission recommendations of                                                                      
a deduction for commercial users.                                                                                               
                                                                                                                                
(The committee took a brief at ease on record while the                                                                         
spreadsheet was passed out to the members.)                                                                                     
                                                                                                                                
Ms. Jackson continued her explanation of the spreadsheet.                                                                       
                                                                                                                                
(Pause on record.)                                                                                                              
                                                                                                                                
She explained the letter as attached by Mr. Bruce Kovarik,                                                                      
Executive Director, Association of Alaska Housing                                                                               
Authorities to Senator Torgerson.  It indicated the full                                                                        
board would be meeting tomorrow.  Senator Adams said the                                                                        
letter was like a "bad headache".  He said it had to be                                                                         
approved by the native boards and United States Housing and                                                                     
Urban Development.  He felt there would be a "no" on this                                                                       
letter.  Co-chair Torgerson said there was a present                                                                            
amendment that would authorize receipt of these monies if                                                                       
it should materialize.                                                                                                          
                                                                                                                                
Ms. Jackson continued with the third attachment from                                                                            
Charlie Walls, President and Chief Executive Officer,                                                                           
Alaska Village Electric Cooperative, Inc. also dated 10 May                                                                     
1999.  It contained several suggestions about how to reach                                                                      
the PCE budget of $15 million.                                                                                                  
                                                                                                                                
Mr. Leman comments to the committee.  Ms. Jackson advised                                                                       
that Mr. Walls was on teleconference to respond to any                                                                          
questions.                                                                                                                      
                                                                                                                                
Senator Adams commented re PCE.  He said his option was                                                                         
always looking at the bottom line.  Ways need to be found                                                                       
to fund this program.  The dividend program would have                                                                          
impact, especially to rural Alaskans.  Most rural Alaskans                                                                      
use their permanent fund dividend to pay, for instance,                                                                         
their electric bills.                                                                                                           
                                                                                                                                
(The arrival of Senator Donley was noted.)                                                                                      
                                                                                                                                
Senator Adams continued.  He referred to the payment by Red                                                                     
Dog Mine to the State.  He felt that proposals submitted on                                                                     
the spreadsheet should be considered.  However, he would                                                                        
object to any of the amendments being offered today on this                                                                     
bill.                                                                                                                           
                                                                                                                                
LAMAR COTTEN, Deputy Commissioner, Department of Community                                                                      
and Regional Affairs was invited to join the committee.  He                                                                     
made brief comments on the Four Dam Pool situation.                                                                             
                                                                                                                                
(Tape #131, Side A, switched to Side B at log #585.)                                                                            
                                                                                                                                
Mr. Cotten continued his explanation to the committee.  He                                                                      
deferred to Dick Emmerman from the Division of Energy,                                                                          
Department of Community and Regional Affairs.                                                                                   
                                                                                                                                
DICK EMMERMAN, Planner IV, Division of Energy, Department                                                                       
of Community and Regional Affairs continued the explanation                                                                     
regarding the Four Dam Pool situation.  The Four Dam Pool                                                                       
is now the responsibility of Alaska Industrial Development                                                                      
and Export Authority.  He did not know its current status.                                                                      
                                                                                                                                
Senator Adams asked if there was objection to the amendment                                                                     
supported this amendment.  He also explained NPRA funds and                                                                     
what their impact might be.                                                                                                     
                                                                                                                                
Co-chair Torgerson thanked the testifiers and said they                                                                         
would commence debate on the amendments.                                                                                        
                                                                                                                                
Senator Donley MOVED amendment #1.  He offered a brief                                                                          
explanation.  Senator Adams OBJECTED.                                                                                           
                                                                                                                                
By a roll call vote of 8 yeas (Torgerson, Parnell, Donley,                                                                      
Leman, Wilken, P. Kelly, Green, Phillips) - 1 nay (Adams)                                                                       
amendment #1 was ADOPTED.                                                                                                       
                                                                                                                                
Senator Donley MOVED amendment #2.  Senator Adams OBJECTED.                                                                     
Senator Donley offered a brief explanation.  Senator Adams                                                                      
spoke to his objection.  Senator Donley responded that this                                                                     
was not an elimination and for the first year would be over                                                                     
the original use.  It would be reduced each year thereafter                                                                     
by about 25 kilowatt hours.  Senator Adams said the average                                                                     
per homeowner usage varies according to temperature and                                                                         
area.  Senator Kelly briefly commented to the amendment.                                                                        
Co-chair Torgerson said he concurred.  He appreciated the                                                                       
efforts by Senator Donley but did not feel this was the                                                                         
best way to resolve the issue.                                                                                                  
                                                                                                                                
Senator Leman said he would support a reduction at 500 kWh.                                                                     
He said he would oppose the amendment as is.  The impacts                                                                       
are greater than what is being anticipated.                                                                                     
                                                                                                                                
By a roll call vote of 1 yea (Donley) and 8 nays                                                                                
(Torgerson, Parnell, Leman, Wilken, Adams, P. Kelly, Green,                                                                     
Phillips) amendment #2 FAILED.                                                                                                  
                                                                                                                                
Senator Donley MOVED amendment #3.  He offered a brief                                                                          
explanation.                                                                                                                    
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Co-chair Torgerson reconvened the committee.                                                                                    
                                                                                                                                
WITHOUT OBJECTION amendment #3 was WITHDRAWN.  Senator                                                                          
Donley advised he would not offer amendment #4.                                                                                 
                                                                                                                                
Senator Parnell MOVED amendment #5.  Co-chair Torgerson                                                                         
offered a brief explanation.  WITHOUT OBJECTION it was                                                                          
ADOPTED.                                                                                                                        
                                                                                                                                
Senator Adams MOVED amendment #6.   Senator Parnell                                                                             
OBJECTED.  Senator Adams offered a brief explanation.                                                                           
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Co-chair Torgerson reconvened the committee at                                                                                  
approximately 10:45 a.m.                                                                                                        
                                                                                                                                
RANDY SIMMONS, Executive Director, Alaska Industrial                                                                            
Development and Export Authority joined the committee                                                                           
offnet from Anchorage.  Co-chair Torgerson asked an                                                                             
explanation from AIDEA regarding amendment #6.  Mr. Simmons                                                                     
responded.  Any amount taken out of the dividend would not                                                                      
be problematic for the authority.  However, if it were to                                                                       
be appropriated that would cause difficulties.  If the                                                                          
amendment was written to take a specific amount of the                                                                          
dividend it would not be a problem.  Anything outside of                                                                        
the dividend language would be a problem.  Mr. Simmons                                                                          
advised however, they did not have a copy of the amendment                                                                      
of the amendment up immediately.                                                                                                
                                                                                                                                
In response to a question by Senator Green Mr. Simmons                                                                          
replied that they pay all expenses from their income.  A                                                                        
certain percentage of their dividend goes to the State.                                                                         
Senator Green asked if the amount could be predicted.  Mr.                                                                      
Simmons said they did not predict the amount but they do                                                                        
forecast out a couple of years.  They try to analyze how                                                                        
much was needed for loans and how much would be expended on                                                                     
projects.                                                                                                                       
                                                                                                                                
Co-chair Torgerson said this would take approximately $8                                                                        
million out of their dividend calculation.  Mr. Simmons                                                                         
said it would have a larger impact than this.  In order to                                                                      
sell bonds the public wants to know there is stable                                                                             
security.  Going outside this program would make the public                                                                     
nervous.  AIDEA is also worried about what will happen to                                                                       
their overall program.                                                                                                          
                                                                                                                                
Mr. Simmons referred to HJR 10,  which asked AIDEA to                                                                           
negotiate regarding the sale of Four Dam Pool.  They have                                                                       
not spoken with the community directly.  He foresaw this                                                                        
probable sale as complicated and does not imagine it would                                                                      
be happening soon.  He said the Legislature should not                                                                          
regard this is money in the bank for at least the next two                                                                      
years.                                                                                                                          
                                                                                                                                
Co-chair Torgerson requested Mr. Simmons to review the                                                                          
amendment and respond to his office in writing.  The                                                                            
committee would look at the bill again this evening at 5:00                                                                     
p.m.  Senator Adams asked specifically Mr. Simmons look at                                                                      
lines 10 and 22, page 1 of amendment #6.                                                                                        
                                                                                                                                
Mr. Wilken also asked for a current status of a proposal                                                                        
for the purchase of the Four Dam Pool.  Mr. Simmons said                                                                        
they have not yet received a formal proposal.                                                                                   
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Co-chair Torgerson recessed the committee at approximately                                                                      
10:55 a.m. until 5:00 p.m. today.                                                                                               
SFC-99 -8- 05/10/99                                                                                                             

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