Legislature(2007 - 2008)SENATE FINANCE 532

05/11/2007 01:30 PM FINANCE


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

Document Name Date/Time Subjects