Legislature(1999 - 2000)

05/10/1999 07:03 PM FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
txt
MINUTES                                                                                                                         
SENATE FINANCE COMMITTEE                                                                                                        
May 10, 1999                                                                                                                    
7:03 PM                                                                                                                         
                                                                                                                                
                                                                                                                                
TAPES                                                                                                                           
                                                                                                                                
SFC-99 # 132, Sides A and B                                                                                                     
                                                                                                                                
CALL TO ORDER                                                                                                                   
                                                                                                                                
Co-Chair Torgerson convened the meeting at approximately                                                                        
7:03 P.M.                                                                                                                       
                                                                                                                                
PRESENT                                                                                                                         
                                                                                                                                
In addition to Co-chair Torgerson, Senators Dave Donley,                                                                        
Loren Leman, Gary Wilken, Pete Kelly, Lyda Green and Randy                                                                      
Phillips were present when the meeting was reconvened.                                                                          
Senators Parnell and Adams arrived shortly thereafter.                                                                          
                                                                                                                                
Also Attending:  MARY GORE, staff to Senator Mike Miller;                                                                       
DAVID ESSARY, Director, Division of Finance, Department of                                                                      
Administration; LAMAR COTTEN, Deputy Commissioner,                                                                              
Department of Community and Regional Affairs; DICK                                                                              
EMMERMAN, Division of Energy, Department of Community and                                                                       
Regional Affairs; aides to committee members and other                                                                          
members of the Legislature.                                                                                                     
                                                                                                                                
Attending via Teleconference:                                                                                                   
                                                                                                                                
SUMMARY INFORMATION                                                                                                             
                                                                                                                                
Co-chair Torgerson reconvened the committee at                                                                                  
approximately 7:03 p.m.  He called SB 10.                                                                                       
                                                                                                                                
                                                                                                                                
 SENATE BILL NO. 10                                                                                                             
                                                                                                                                
"An Act relating to an optional exemption from                                                                                  
municipal property taxes for recreational facilities."                                                                          
                                                                                                                                
                                                                                                                                
SPONSOR SUBSTITUTE FOR SENATE BILL NO. 10                                                                                       
                                                                                                                                
"An Act requiring a utility that provides services in                                                                           
a municipality with a population of more than 100,000                                                                           
to have an ongoing program of placing existing                                                                                  
overhead utility lines underground; and relating to                                                                             
rates for recovering the cost of placing existing                                                                               
overhead utility lines underground."                                                                                            
                                                                                                                                
                                                                                                                                
CS FOR SPONSOR SUBSTITUTE FOR SENATE BILL NO. 10(L&C)                                                                           
                                                                                                                                
"An Act requiring a utility that provides services in                                                                           
a municipality with a population of more than 100,000                                                                           
to have an ongoing program of placing existing                                                                                  
overhead utility distribution lines underground; and                                                                            
relating to rates for recovering the cost of placing                                                                            
existing overhead utility distribution lines                                                                                    
underground."                                                                                                                   
                                                                                                                                
                                                                                                                                
Senator Donley MOVED CSSSSB 10(FIN) and WITHOUT OBJECTION                                                                       
it was REPORTED OUT with individual recommendations and                                                                         
accompanying fiscal notes AK Public Utilities zero.                                                                             
                                                                                                                                
Co-chair Torgerson called SB 155.  Senator Donley made                                                                          
brief introductory comments.                                                                                                    
                                                                                                                                
                                                                                                                                
 SENATE BILL NO. 155                                                                                                            
                                                                                                                                
"An Act relating to methods of payment of and reports                                                                           
concerning certain state salaries and business                                                                                  
expenses."                                                                                                                      
                                                                                                                                
                                                                                                                                
MARY GORE, staff to Senator Mike Miller was invited to join                                                                     
the committee.  In speaking to the amendment she said it                                                                        
would require the railroad to comply with the act.                                                                              
                                                                                                                                
Senator Donley MOVED amendment #1.  Senator Wilken MOVED                                                                        
to divide amendment #1 between lines two and three.                                                                             
WITHOUT OBJECTION it was divided 1(a) and 1(b) between                                                                          
lines two and three.                                                                                                            
                                                                                                                                
Senator Wilken commented regarding amendment 1(a).  This                                                                        
part of the amendment created concerns on the part of the                                                                       
railroad.  They should be allowed a courtesy to reply to                                                                        
this section.                                                                                                                   
                                                                                                                                
By a roll call vote of 6 yeas (Torgerson, Donley, Leman,                                                                        
Kelly, Green, Phillips) and 1 nay (Wilken) (Parnell                                                                             
abstain; Adams absent) amendment 1(a) was ADOPTED.                                                                              
                                                                                                                                
By a roll call vote of 7 yeas (Torgerson, Parnell, Donley,                                                                      
Leman, Kelly, Green, Phillips) and 1 nay (Wilken) (Adams                                                                        
absent) amendment #1(b) was ADOPTED.                                                                                            
                                                                                                                                
Senator Donley indicated he would like to hear from the                                                                         
department regarding the fiscal note.                                                                                           
                                                                                                                                
DAVID ESSARY, Director, Division of Finance, Department of                                                                      
Administration was invited to join the committee and                                                                            
testified on the fiscal note.                                                                                                   
                                                                                                                                
Senator Leman felt that the whole situation should be                                                                           
reevaluated.                                                                                                                    
                                                                                                                                
Mr. Essary felt the report should be complete and accurate.                                                                     
It would be their intent in the future to automate the                                                                          
system a much as possible.                                                                                                      
                                                                                                                                
Senator Donley said he felt the fiscal note was a bargain                                                                       
but would not object to lowering it.  Co-chair Torgerson                                                                        
said he would only make changes in the fiscal note further                                                                      
on out.  He had no objection with the fiscal note as                                                                            
presented.                                                                                                                      
                                                                                                                                
Senator Phillips MOVED CSSB 155(FIN) and WITHOUT OBJECTION                                                                      
it was REPORTED OUT with individual recommendations and                                                                         
accompanying fiscal note for the Department of                                                                                  
Administration, Centralized Administrative Services in the                                                                      
amount of $18.2.                                                                                                                
                                                                                                                                
Co-chair Torgerson called SB 157 back before the committee.                                                                     
                                                                                                                                
                                                                                                                                
 SENATE BILL NO. 157                                                                                                            
                                                                                                                                
"An Act relating to power cost equalization; and                                                                                
providing for an effective date."                                                                                               
                                                                                                                                
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Co-chair Torgerson called the meeting back to order.                                                                            
                                                                                                                                
Senator Adams WITHDREW amendment #6 and WITHOUT OBJECTION                                                                       
it was WITHDRAWN.                                                                                                               
                                                                                                                                
Senator Parnell WITHDREW amendment #7.  He MOVED amendment                                                                      
to appropriations from the National Petroleum Reserve -                                                                         
Alaska special revenue fund to the power cost equalization                                                                      
and rural electric capitalization fund.                                                                                         
                                                                                                                                
Senator Adams commented briefly to the amendment and said                                                                       
they were trying to get away from using general funds.  He                                                                      
said he would support the amendment.                                                                                            
                                                                                                                                
Senator Wilken asked about monies from a lease sale last                                                                        
week and asked if they would be available for the 50-50                                                                         
split.  Senator Parnell responded that a portion of them                                                                        
would.  Senator Wilken said he felt all options should be                                                                       
looked at, not just PCE and capital equalization.                                                                               
                                                                                                                                
Senator Adams said the impacted communities were subject to                                                                     
Federal law.  Senator Wilken said the legislation referred                                                                      
to by Senator Adams was passed in 1980 and the fifty                                                                            
percent is subject to appropriation by the Federal                                                                              
Congress.  Senator Adams said it was correct that they were                                                                     
subject to appropriation.  Co-chair Torgerson said the                                                                          
amendment, in fact, was subject to appropriation.                                                                               
                                                                                                                                
By a roll call vote of 6 yeas (Torgerson, Parnell, Leman,                                                                       
Adams, P. Kelly, Green) and 3 nays (Donley, Wilken,                                                                             
Phillips) amendment #7(a) was ADOPTED.                                                                                          
                                                                                                                                
Senator Adams MOVED amendment #8.                                                                                               
                                                                                                                                
LAMAR COTTEN, Deputy Commissioner, Department of Community                                                                      
and Regional Affairs was invited to join the committee.  He                                                                     
said they now feel they have enough cash for the smaller                                                                        
communities' demands.  He explained these were only loans                                                                       
and the interest rates vary.                                                                                                    
                                                                                                                                
Co-chair Torgerson questioned page two, line two of                                                                             
amendment #8.  Has any determination been made by AIDEA                                                                         
that sufficient funds were available to complete the power                                                                      
transmission intertie between the Swan Lake and Tyee Lake                                                                       
hydroelectric projects?  Mr. Cotten indicated they had not.                                                                     
He said the funds were all subject to appropriation.                                                                            
                                                                                                                                
Senator Wilken asked if they could have an approximation of                                                                     
how much money was involved?  Mr. Cotten said it was                                                                            
roughly $11 million.  $2.2 goes to the project fund for                                                                         
smaller communities; $4.4 to Southeast Energy fund and the                                                                      
remaining to PCE.  The Southeast energy plan is from line                                                                       
fourteen, page one of amendment #8 through line nine, page                                                                      
two.                                                                                                                            
                                                                                                                                
Senator Wilken said there were three pots of money and                                                                          
asked they be explained again.  Mr. Cotten indicated that                                                                       
twenty percent was for small loans, forty percent was for                                                                       
PCE and the remaining forty percent went to Southeast                                                                           
Energy.  The Southeast fund was for a connection between                                                                        
Swan Lake and Tyee Lake hydroelectric projects.  He noted                                                                       
currently that approximately $10 million was in the                                                                             
Southeast Energy fund.                                                                                                          
                                                                                                                                
Co-chair Torgerson asked what would happen if the power                                                                         
project fund ran below?  Mr. Cotten said the corpus of the                                                                      
fund was being repaid and they felt confident.                                                                                  
                                                                                                                                
Co-chair Torgerson indicated he supported the amendment.                                                                        
                                                                                                                                
WITHOUT OBJECTION amendment #8 was ADOPTED.                                                                                     
                                                                                                                                
Senator Parnell MOVED amendment #9.  Senator Leman                                                                              
OBJECTED.  Co-chair Torgerson explained briefly.                                                                                
                                                                                                                                
Senator Leman MOVED amendment to amendment #9 and briefly                                                                       
explained.                                                                                                                      
                                                                                                                                
Senator Phillips asked if there should not be 350 kWh/month                                                                     
divided by 12?  Senator Leman said it worked either way.                                                                        
However, Senator Leman said he thought the accounting                                                                           
worked better the way it was in the amendment for the                                                                           
department.                                                                                                                     
                                                                                                                                
DICK EMMERMAN, Division of Energy, Department of Community                                                                      
and Regional Affairs was invited to join the committee.                                                                         
Senator Phillips posed a question regarding monthly maximum                                                                     
limits that must not exceed 350 kWh/month and wondered if                                                                       
someone could manipulate this.  There were many variations                                                                      
suggested by Senator Leman, but Mr. Emmerman felt the way                                                                       
the amendment was written it would work.  He said the                                                                           
division would be ordered to adopt regulations according to                                                                     
this amendment.  It was clear that the monthly maximum                                                                          
limits must not exceed 350 kWh/month and that no individual                                                                     
month may exceed 500 kWh.                                                                                                       
                                                                                                                                
Senator Leman MOVED to delete "sum of the" from amendment                                                                       
                                                                                                                                
Senator Adams was concerned about usage during the winter                                                                       
months.  The average may be higher.  Rates increased during                                                                     
the darker months and the size of the family.  Mr. Emmerman                                                                     
responded that monthly usage of many recipients during the                                                                      
winter months increase.  He agreed that in the wintertime                                                                       
reducing the cap from 750 to 500 would affect those                                                                             
recipients.  He further agreed that deletion of the words                                                                       
"sum of the" was more appropriate.                                                                                              
                                                                                                                                
Senator Leman also felt the words "per month" should also                                                                       
be deleted.                                                                                                                     
                                                                                                                                
(Tape number 132, Side A switched to Side B.)                                                                                   
                                                                                                                                
Senator Leman MOVED to amend the amendment to amendment #9                                                                      
by deleting "sum of the" and "per month".  Senator Adams                                                                        
and Senator Green OBJECTED.  Mr. Emmerman indicated this                                                                        
amended amendment would work.   OBJECTIONS withdrawn.                                                                           
                                                                                                                                
WIHTOUT OBJECTION amendment to amendment #9 was ADOPTED.                                                                        
                                                                                                                                
Senator Adams OBJECTED to amended amendment #9.                                                                                 
                                                                                                                                
By a roll call vote of 7 yeas (Torgerson, Parnell, Donley,                                                                      
Leman, Wilken, Green, Phillips) and 2 nays (Adams, Kelly)                                                                       
amended amendment #9 was ADOPTED.                                                                                               
                                                                                                                                
Senator Adams WITHDREW amendments #10 and #11.                                                                                  
                                                                                                                                
Senator Adams MOVED amendment #12.  Senator Donley                                                                              
OJBECTED.  Senator Adams briefly explained the amendment.                                                                       
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Co-chair Torgerson called the committee back to order.                                                                          
                                                                                                                                
Senator Parnell MOVED amendment to amendment #12, to delete                                                                     
"12.5" and insert "13.5".  Senator Leman OBJECTED.  The                                                                         
objection was WITHDRAWN.  He agreed, after a brief                                                                              
explanation by Co-chair Torgerson, that it should work.                                                                         
Mr. Emmerman said that the numbers being used presently                                                                         
were only estimates.  He explained the formula used.  This                                                                      
would bring them down to $12 million.                                                                                           
                                                                                                                                
By a roll call vote of 6 yeas (Torgerson, Parnell, Leman,                                                                       
Wilken, Green, Phillips) and 3 nays (Donley, Adams, P.                                                                          
Kelly) amendment to amendment #12 was ADOPTED.                                                                                  
                                                                                                                                
Senator Adams OBJECTED to the amended amendment #12.  By a                                                                      
roll call vote of 4 yeas (Torgerson, Parnell, Leman,                                                                            
Wilken) and 5 nays (Donley, Adams, P.Kelly, Green,                                                                              
Phillips) amended amendment #12 FAILED.                                                                                         
                                                                                                                                
Senator Parnell MOVED amendment #13.                                                                                            
                                                                                                                                
MARY JACKSON, staff to Senator John Torgerson was invited                                                                       
to join the committee.  She explained amendment #13.                                                                            
                                                                                                                                
WITHOUT OBJECTION amendment #13 was ADOPTED.                                                                                    
                                                                                                                                
Senator Adams MOVED amendment #14.  Co-chair Torgerson                                                                          
OBJECTED.  Senator Adams referred to the letter received                                                                        
from AIDEA this afternoon.                                                                                                      
                                                                                                                                
By a roll call vote of 4 yeas (Torgerson, Parnell, Adams,                                                                       
P. Kelly) and 5 nays (Donley, Leman, Wilken, Green,                                                                             
Phillips) amendment #14 FAILED.                                                                                                 
                                                                                                                                
The committee took a brief at ease.                                                                                             
                                                                                                                                
Senator P. Kelly MOVED to rescind the committee action on                                                                       
amendment #12.  WITHOUT OBJECTION it was rescinded.                                                                             
                                                                                                                                
Senator Leman MOVED to delete "13.5" and insert "14".                                                                           
Senator Kelly OBJECTED.  By a roll call vote of 4 yeas                                                                          
(Parnell, Donley, Leman, Phillips) and 5 nays (Torgerson,                                                                       
Wilken, Adams, P. Kelly, Green) amendment to amendment #12                                                                      
FAILED.                                                                                                                         
                                                                                                                                
There followed brief discussion between the members and Mr.                                                                     
Emmerman.                                                                                                                       
                                                                                                                                
Senator Donley OBJECTED to the amended amendment #12.  By a                                                                     
roll call vote of 8 yeas (Torgerson, Parnell, Leman,                                                                            
Wilken, Adams, P. Kelly, Green, Phillips) and 1 nay                                                                             
(Donley) amended amendment #12 was ADOPTED.                                                                                     
                                                                                                                                
Mr. Emmerman advised the committee that he could have runs                                                                      
available by tomorrow.                                                                                                          
                                                                                                                                
Senator Parnell MOVED CSSB 157(FIN).  Senator Donley                                                                            
OBJECTED and briefly spoke to his objection.  He felt some                                                                      
sort of reduction should be looked at so that a gradual one                                                                     
would be in place.  Senator Adams felt they were looking at                                                                     
ways to get away from general funds and finding other                                                                           
sources for funding.  He did appreciate the change in                                                                           
amendment #12 to "13.5".  Senator Wilken said he was also a                                                                     
bit disappointed.  He concurred with Senator Adams to get                                                                       
off the general fund stream.  Also, there would be                                                                              
incentives put in place to bring down the cost and usage;                                                                       
also explore other methods of generating power.  The cost                                                                       
of power in rural areas needs to be addressed.  He feels                                                                        
more work needs to be done.  Perhaps some sort of revisit                                                                       
clause should be put on the bill.  It should not go as is                                                                       
today.                                                                                                                          
                                                                                                                                
By a roll call vote of 6 yeas (Torgerson, Parnell, Leman,                                                                       
Kelly, Green, Phillips) and 3 nays (Donley, Wilken, Adams,)                                                                     
CSSB 157(FIN) was REPORTED OUT with individual                                                                                  
recommendations and accompanying fiscal notes:  Alaska                                                                          
Public utilities, zero; Department of Community and                                                                             
Regional Affairs, Division of Energy, as prepared by the                                                                        
Senate Finance Committee, $12.100.0.                                                                                            
                                                                                                                                
Co-chair Torgerson indicated that the committee would meet                                                                      
again at 5:00 p.m. tomorrow evening.                                                                                            
                                                                                                                                
                                                                                                                                
ADJOURNMENT                                                                                                                     
                                                                                                                                
Co-chair Torgerson adjourned the committee at approximately                                                                     
8:45 p.m.                                                                                                                       
                                                                                                                                
                                                                                                                                
SFC-99 -1- 05/10/99 pm                                                                                                          

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