Legislature(2007 - 2008)SENATE FINANCE 532

03/26/2008 09:00 AM FINANCE

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved SB 303 Out of Committee
Moved CSSB 185(STA) Out of Committee
                  SENATE FINANCE COMMITTEE                                                                                      
                       March 26, 2008                                                                                           
                         9:11 a.m.                                                                                              
CALL TO ORDER                                                                                                                 
Co-Chair Stedman called the Senate  Finance Committee meeting                                                                   
to order at 9:11:06 AM.                                                                                                       
MEMBERS 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                                                                                                              
MEMBERS ABSENT                                                                                                                
ALSO PRESENT                                                                                                                  
Ginger  Blaisdell, Staff,  Senator  Green; Kathie  Wasserman,                                                                   
Executive  Director,  Alaska Municipal  League;  Bill  Allen,                                                                   
City  Manager, City  of  Palmer; Senator  Bill  Wielechowski;                                                                   
George Ascott,  Staff, Senator Wielechowski;  Anne Carpeneti,                                                                   
Assistant  Attorney General,  Legal Services  Section-Juneau,                                                                   
Criminal  Division, Department  of Law;  John Bitney,  Staff,                                                                   
Representative  John  Harris;  Bill  Leighty,  Director,  The                                                                   
Leighty Foundation                                                                                                              
PRESENT VIA TELECONFERENCE                                                                                                    
Bill Griffith,  Facility Programs Manger, Division  of Water,                                                                   
Department  of Environmental  Conservation; Archie  Giddings,                                                                   
Public  Works  Director,  City of  Wasilla;  Kathy  Monfreda,                                                                   
Chief  of   Criminal  Records   and  Identification   Bureau,                                                                   
Department of Public Safety; Karen  Foster, Surviving Parents                                                                   
Coalition;  Peyton  Merideth,   Detective,  Fairbanks  Police                                                                   
Department;   Ron   Tidler,   Detective,   Anchorage   Police                                                                   
Department; Chris Rose, Executive  Director, Renewable Energy                                                                   
Alaska  Projects; Earnest  Weiss, Mayor,  City of King  Cove;                                                                   
Gary Hennigh,  City Administrator,  City  of King Cove;  Phil                                                                   
Steyer,   Director  of   Corporate  Communications,   Chugach                                                                   
Electric; Scott Saline, Refrigeration Contractor, Sitka                                                                         
SB 303    "An Act  relating to certain grants  awarded by the                                                                   
          Department of Environmental Conservation."                                                                            
          SB 303 was REPORTED out of Committee with a "do                                                                       
          pass"  and  an  accompanying  previously  published                                                                   
          fiscal  note from the  Department of  Environmental                                                                   
SB 185    "An  Act  relating   to  sex  offenders  and  child                                                                   
          kidnappers; and providing for an effective date."                                                                     
          SB 185 (STA) was REPORTED out of Committee with a                                                                     
          "do  pass" recommendation  and an accompanying  new                                                                   
          zero   fiscal   notes   from  the   Department   of                                                                   
          Corrections  and the  Department of  Administration                                                                   
          and  previously  published  fiscal notes  from  the                                                                   
          Department  of Administration,  Department of  Law,                                                                   
          and the Department of Public Safety.                                                                                  
CS HB 152(FIN)                                                                                                                  
          "An  Act establishing  a  renewable energy  project                                                                   
          account and a renewable  energy fund and describing                                                                   
          their uses and purposes."                                                                                             
          CSSB 152 (FIN) was HEARD  and HELD in committee for                                                                   
          further consideration.                                                                                                
9:11:11 AM                                                                                                                    
SENATE BILL NO. 303                                                                                                           
     "An Act relating to certain grants awarded by the                                                                          
     Department of Environmental Conservation."                                                                                 
Co-Chair Stedman  presented the opening remarks  and overview                                                                   
for the meeting.                                                                                                                
9:13:30 AM                                                                                                                    
GINGER BLAISDELL,  STAFF, SENATOR GREEN provided  a technical                                                                   
overview  of SB  303. She  noted  that the  bill reflected  a                                                                   
population change from 5,000 to  10,000 persons (Page 1, line                                                                   
13  and Page  2,  line 1-2).  She  referred  to a  "community                                                                   
listing" with the current population  of each city in Alaska.                                                                   
She remarked that Legal Services  indicated that changing the                                                                   
population  under this  program  would not  impact any  other                                                                   
program in the state (copy on  file). Ms. Blaisdell presented                                                                   
a final note showing a three year  listing of water and sewer                                                                   
projects  and   the  cities   awarded  these  projects.   She                                                                   
maintained  that  although  the listing  reflected  FY  07-09                                                                   
projects, this bill would only deal with FY 09.                                                                                 
Co-Chair Stedman  requested an  explanation of the  bill. Ms.                                                                   
Blaisdell  responded that  the  bill changes  the  population                                                                   
criteria for the rates of community  matching water and sewer                                                                   
grants.  She  noted  that the  bill  changes  the  population                                                                   
criteria from a city of 5,000  to a city of up to 10,000. Ms.                                                                   
Blaisdell cited  that cites of  1000 or less  can participate                                                                   
in the  program with a matching  rate of eighty  five percent                                                                   
state funding  to fifteen  percent municipality funding.  She                                                                   
continued that cities between  1,001 and 5,000 have a funding                                                                   
rate of seventy percent state  to thirty percent municipality                                                                   
participation and  cities of 5,001  or higher was on  a fifty                                                                   
percent to  fifty percent matching  rate. She  indicated that                                                                   
the  rational is  that cities  beginning to  grow beyond  the                                                                   
5,000 population mark are experiencing  a significant rise in                                                                   
costs for  their expanding system  of piped water  and sewer.                                                                   
This has  pushed a higher tax  burden on the citizens  to pay                                                                   
for the rising costs of steel and construction.                                                                                 
9:16:42 AM                                                                                                                    
Senator Dyson  questioned the  genesis of  the bill.  He also                                                                   
asked if  this involved an expansion  of the sewer  and water                                                                   
system or  the intensity  in the treatment  of the  water and                                                                   
9:17:07 AM                                                                                                                    
Ms. Blaisdell responded that the  requests came from multiple                                                                   
communities. She specified that  the bill does not change the                                                                   
program  at all  or  the type  of sewer  system  used in  the                                                                   
communities, but just helps newly growing communities.                                                                          
9:17:48 AM                                                                                                                    
Senator  Olson  remarked that  it  would change  the  funding                                                                   
structure  for these communities  and  he wondered about  the                                                                   
size of the  projects being considered. Ms.  Blaisdell showed                                                                   
that some of  projects reflected a wide funding  range from a                                                                   
few hundred thousand to several  million. She remarked that a                                                                   
community  has  to   follow  a  process  by   turning  in  an                                                                   
application to the Department  of Environmental Conservation.                                                                   
This application  is scored  and ranked  and then a  decision                                                                   
made on  how much in  general funds will  be provided  to pay                                                                   
for the  project. If  the project costs  more than  the state                                                                   
agrees to pay,  the Legislature would decide how  much of the                                                                   
General Fund would be made available.                                                                                           
Senator Olson remarked that he  does not see reflected in the                                                                   
fiscal note  what it  will cost the  state when the  matching                                                                   
fund  rate changes  from a  fifty/fifty  to a  seventy/thirty                                                                   
Co-Chair  Stedman answered  that  the Fiscal  Note  reflected                                                                   
$3.72 million for one year.                                                                                                     
9:19:32 AM                                                                                                                    
Ms. Blaisdell  remarked  that the Fiscal  Note only  reflects                                                                   
one  year because  the number  or type  of applications  that                                                                   
will  be received  from  the  communities  next year  is  not                                                                   
known.  She  noted  that  the   $3.72  million  reflects  the                                                                   
projects  that it  is  anticipated will  be  approved in  the                                                                   
9:20:08 AM                                                                                                                    
Senator  Elton questioned  why  the grants  are  made at  the                                                                   
municipal  rather  than  the  borough  level.  Ms.  Blaisdell                                                                   
remarked  that   boroughs,  and  municipalities   within  the                                                                   
boroughs, may have different powers.  Senator Elton seemed to                                                                   
see  a   significant  difference   between  a  borough   with                                                                   
incorporated municipalities, like  the Kenai Borough, and the                                                                   
boroughs, such as, the Northwest  Arctic Borough. He believed                                                                   
it might  create an  incentive for  organized boroughs,  with                                                                   
municipalities   within  them,  to   switch  their   mode  of                                                                   
operations to access these funds.                                                                                               
9:22:18 AM                                                                                                                    
Ms.  Blaisdell  reported  that   she  had  never  heard  this                                                                   
suggestion  from any  of  the cities  impacted  by the  bill.                                                                   
Senator Elton  mentioned that  he understood the  impacts for                                                                   
the next fiscal  year and how  there is only a change  in the                                                                   
definition of population size  but he wondered if there would                                                                   
be  a  realistic  way for  the  larger  communities  to  grow                                                                   
without  the money growing.  Ms. Blaisdell  agreed that  more                                                                   
money would be  needed. She stressed that if  the fiscal note                                                                   
for $3.72  million was not passed,  then many of  the planned                                                                   
projects for FY 09 would have to be removed.                                                                                    
9:25:32 AM                                                                                                                    
KATHIE  WASSERMAN,   EXECUTIVE  DIRECTOR,   ALASKA  MUNICIPAL                                                                   
LEAGUE  supported  SB  303  because  it  would  help  growing                                                                   
communities  boost  local  water   and  sewer  projects.  She                                                                   
indicated that  the 5,000 population number was  an arbitrary                                                                   
number in  1994, but  since that time,  costs have  risen for                                                                   
water and  sewer projects  so the  intent of  the bill  is to                                                                   
raise  that arbitrary  number  to 10,000.  She explained  the                                                                   
population  number change  would  help eight  communities  in                                                                   
dealing  with  aging  water  and   sewer  projects:  Wasilla,                                                                   
Ketchikan, Kenai,  Sitka, Kodiak,  Bethel, Palmer  and Homer.                                                                   
Ms.  Wasserman answered  the earlier  question about  borough                                                                   
management by  saying that boroughs  usually do not  have the                                                                   
water and sewer  rights unless it is a unified  borough, like                                                                   
Sitka, Juneau,  and Yakatat. She advised that  other boroughs                                                                   
do not provide borough-wide water and sewer projects.                                                                           
BILL ALLEN,  CITY MANAGER, CITY  OF PALMER supported  SB 303.                                                                   
He related  that the smaller city  of Palmer is  dealing with                                                                   
an aging infrastructure  that contains lengths  of steel wall                                                                   
construction pipe  with a forty percent leakage  in the water                                                                   
system. Mr. Allen pointed out  that Palmer is very aggressive                                                                   
in economic development however  the city is only five square                                                                   
miles which leaves  the city trying to expand  its boundaries                                                                   
through  annexation. Mr.  Allen related  that when trying  to                                                                   
annex  outlying  communities   the  benefits  are  important.                                                                   
Palmer  wants to  be able  provide city-wide  safe water  and                                                                   
sanitation. Mr.  Allen remarked  that the local  savings from                                                                   
fifty  percent   to  thirty  percent  makes   a  considerable                                                                   
difference to the small tax base  of Palmer. He remarked that                                                                   
Palmer is  also experiencing a  migration into the  city from                                                                   
rural Alaska that is impacting the city's infrastructure.                                                                       
9:33:29 AM                                                                                                                    
BILL GRIFFITH,  FACILITY PROGRAMS MANGER, DIVISION  OF WATER,                                                                   
DEPARTMENT  OF  ENVIRONMENTAL   CONSERVATION,  testified  via                                                                   
teleconference,  and  advised  that  the  department  is  not                                                                   
opposed  to this  statutory  change  but it  is  viewed as  a                                                                   
policy decision  by the Legislature  to establish  what share                                                                   
of project  costs should  be born by  both the state  and the                                                                   
local  municipalities.  He affirmed  that  for  FY 09,  under                                                                   
these proposed  changes and in  order to provide  funding for                                                                   
the  same  number  of projects,  it  would  be  necessary  to                                                                   
increase  the  Department  of   Environmental  Conservation's                                                                   
Capital Budget request. Or, he  advised, the department could                                                                   
fund fewer projects with the same  amount of funding that has                                                                   
already been  requested. He indicated  that in  future years,                                                                   
the  department would  incorporate  the  new matching  ratios                                                                   
into the department's budget request.                                                                                           
Senator Huggins  questioned how many of the  existing twenty-                                                                   
six  projects  would be  affected  by this  legislation.  Mr.                                                                   
Griffith responded  that nine  projects would be  affected by                                                                   
this change.                                                                                                                    
9:35:52 AM                                                                                                                    
Senator Elton remarked that nine  communities would receive a                                                                   
beneficial  effect but  there would be  a potential  negative                                                                   
affect on  smaller communities  or larger communities  unless                                                                   
the amount  of money grew.  Mr. Griffith responded  that most                                                                   
communities  of  less  than  1000  people  are  eligible  for                                                                   
village  safe-water  funding  which  is  a  separate  funding                                                                   
request the department makes every year.                                                                                        
Senator Elton  remarked on the  potential negative  affect of                                                                   
communities between  1,000 and 5,000 and the  other potential                                                                   
negative  affect on  those communities  above 10,000,  unless                                                                   
the money  grows by  Legislative action.  Mr. Griffin  agreed                                                                   
that either the  money must grow in order to  provide funding                                                                   
for the  same number of  projects or  the choice could  be to                                                                   
fund fewer projects.                                                                                                            
9:38:15 AM                                                                                                                    
Co-Chair  Stedman clarified  that in  the fiscal note,  eight                                                                   
projects are listed for FY 09:                                                                                                  
     Homer Water Treatment Plant Upgrade                                                                                        
     Kenai New Water Transmission Main Phase Wellhouse                                                                          
     Kodiak Aleutian Homes Water & Sewer Replacement Ph 4                                                                       
     Palmer Steel Water Main Replacement Phase 6                                                                                
     Palmer Wastewater Treatment Plant Improvement Design                                                                       
     Palmer Southwest Utility Extension Phase II                                                                                
     Wasilla Mission Hills Water Extension                                                                                      
Senator  Huggins observed  that Mr.  Griffith clarified  that                                                                   
there are only eight, not nine, community projects.                                                                             
9:39:59 AM                                                                                                                    
ARCHIE  GIDDINGS, PUBLIC  WORKS  DIRECTOR,  CITY OF  WASILLA,                                                                   
testified via teleconference in  support of this legislation.                                                                   
He mentioned  that projects are  scored on a  priority basis,                                                                   
not necessarily  the size  of the  project. He expressed  the                                                                   
ongoing difficulty  in getting  federal funding  and stressed                                                                   
that  the  increase  in the  state  contribution  would  help                                                                   
communities achieve the needed matching funds.                                                                                  
9:41:45 AM                                                                                                                    
Ms. Blaisdell  referred to the population list  and indicated                                                                   
that most of  the benefiting communities had  a population of                                                                   
approximately  3,000   in  1994.  She  remarked   that  these                                                                   
communities are now  in the 6,000 to 7,000  population range.                                                                   
She  described  a large  population  gap until  reaching  the                                                                   
higher  population communities  of  Juneau  and Fairbanks  at                                                                   
30,000. She explained  that 10,000 was a good  base number as                                                                   
she  is confident  that neither  Juneau  nor Fairbanks  would                                                                   
fall below the 10,000 population mark.                                                                                          
9:43:25 AM                                                                                                                    
Co-Chair  Hoffman MOVED  to REPORT  SB 303  out of  Committee                                                                   
with individual  recommendation  and the accompanying  fiscal                                                                   
note. There being NO OBJECTION, it was so ordered.                                                                              
SB  303  was REPORTED  out  of  Committee  with a  "do  pass"                                                                   
recommendation  and  an  accompanying   previously  published                                                                   
fiscal   note   from   the   Department    of   Environmental                                                                   
AT EASE:       9:44:15 AM                                                                                                     
RECONVENED:    9:44:35 AM                                                                                                     
SENATE BILL NO. 185                                                                                                           
     "An   Act   relating   to  sex   offenders   and   child                                                                   
SENATOR BILL WIELECHOWSKI, presented  an overview of the bill                                                                   
updating  the   sex  offender  list  to  include   the  email                                                                   
addresses  and   electronic  identifiers  of   convicted  sex                                                                   
offenders and  child kidnappers. He remarked  that Alaska has                                                                   
one of the  highest internet uses  in the country and  one of                                                                   
highest percentage of sex offenders  in the nation. He argued                                                                   
that the  bill provides a  powerful tool for  law enforcement                                                                   
to track the activities of convicted  sex offenders and catch                                                                   
and punish  them when  they break  the law. Alaska  currently                                                                   
requires sex offenders  to register their home  addresses and                                                                   
places  of employment  but there  is, at present,  no way  to                                                                   
track  their  internet  communication.  Senator  Wielechowski                                                                   
reviewed the bill sections. He noted that:                                                                                      
     Section  1  makes  not registering  the  sex  offender's                                                                   
     email a crime.                                                                                                             
     Section  2, Page  3, line  4-6 added  the definition  of                                                                   
     what must be registered.                                                                                                   
     Section  3  states that  the  email must  be  registered                                                                   
     within one day.                                                                                                            
     Section  4 has two  components,  which were added  after                                                                   
     statements  from  the Senate  State  Affairs  Committee.                                                                   
     Section  4,  paragraph  2,  is a  request  from  Senator                                                                   
     Stevens  to  make  this  information  available  to  the                                                                   
     central registries of internet service providers.                                                                          
     Section  5 is the  applicability section describing  the                                                                   
     dates and times the bill goes into effect.                                                                                 
9:49:21 AM                                                                                                                    
Co-Chair Stedman  questioned the  deletion of "knowingly"  on                                                                   
Page 1, line 6.                                                                                                                 
GEORGE ASCOTT,  STAFF, SENATOR  WIELECHOWSKI, explained  that                                                                   
the word was  deleted on the advice of drafter,  Jerry Lukup,                                                                   
Legislative Affairs legal.                                                                                                      
9:50:26 AM                                                                                                                    
Co-Chair  Stedman  asked  what  restrictions  are  placed  on                                                                   
access to computers for sex offenders.                                                                                          
Senator Wielechowski remarked  that this bill does not impact                                                                   
the  use of  computers  by  sex  offenders; the  bill  simply                                                                   
requires them to register their email addresses.                                                                                
9:50:42 AM                                                                                                                    
Senator Thomas requested an explanation  on Page 3, lines 22-                                                                   
31,  on how  someone could  substantiate if  their child  was                                                                   
having an internet conversation with a sex offender.                                                                            
9:51:37 AM                                                                                                                    
Senator Wielechowski  revealed that the original  plan was to                                                                   
generate a  public list of  sex offenders but  the Department                                                                   
of  Public  Safety  realized   this  could  be  used  by  sex                                                                   
offenders to network  with one another to  share pornography.                                                                   
He  explained there  would be  a  system in  place, within  a                                                                   
federal  office,  where  parents  could  type  in  the  email                                                                   
address or identifier  of an individual and find  out if that                                                                   
person is a registered sex offender.                                                                                            
9:52:15 AM                                                                                                                    
Senator  Elton  questioned  why   the  registration  fee  was                                                                   
assessed to the state and not the sex offender.                                                                                 
9:53:33 AM                                                                                                                    
KATHY MONFREDA, CHIEF OF CRIMINAL  RECORDS AND IDENTIFICATION                                                                   
BUREAU,   DEPARTMENT   OF  PUBLIC   SAFETY,   testified   via                                                                   
teleconference in support of the  bill. She remarked that the                                                                   
issue of  having sex offenders  pay for the registration  had                                                                   
occurred in  the past but the  purpose of the bill  is to get                                                                   
the sex offender to register and  many offenders are indigent                                                                   
and may not be able to pay.                                                                                                     
9:54:48 AM                                                                                                                    
KAREN  FOSTER,  SURVIVING PARENTS  COALITION,  testified  via                                                                   
teleconference,  and  supported  the bill.  Ms.  Foster,  the                                                                   
mother of Bonnie  Craig who was murdered in  1994, shared the                                                                   
statistics  of child  pornography and  sexual predators.  She                                                                   
believed the  bill would give  law enforcement  an incredible                                                                   
tool to see  if a registered sex offender is  doing something                                                                   
illegal on the  computer. Ms. Foster stressed  that this bill                                                                   
will  provide detailed  information  and  evidence that  will                                                                   
help prosecute the offenders and  provide more time to rescue                                                                   
9:59:01 AM                                                                                                                    
PEYTON  MERIDETH,  DETECTIVE,   FAIRBANKS  POLICE  DEPARTMENT                                                                   
testified via  teleconference, supported SB 185  on behalf of                                                                   
the  Fairbanks Police  Department  and Chief  of Police,  Dan                                                                   
Hoffman.  Mr.   Peyton  reported  that  he   was  the  Agency                                                                   
Representative for Fairbanks Police  Department on the Alaska                                                                   
Internet  Crimes Against  Children  Task  Force. He  remarked                                                                   
that  one of  his jobs  is to  investigate child  pornography                                                                   
cases  in conjunction  with the  Anchorage Police  Department                                                                   
and  other statewide  task  force members.  He  felt that  it                                                                   
would greatly  aid law  enforcement if  sex offenders  had to                                                                   
register their  email or other  internet identifiers  so that                                                                   
when the  police department  was researching proactive  cases                                                                   
against children, the offenders  could be identified earlier.                                                                   
10:01:51 AM                                                                                                                   
Senator Thomas questioned the  number of registered child sex                                                                   
offenders or  child kidnappers in Alaska.  Detective Meredith                                                                   
responded  he  did  not know  but  suggested  contacting  the                                                                   
Department of Public Safety. Ms.  Monfreda replied that there                                                                   
are 4200 registered sex offenders in Alaska.                                                                                    
10:03:04 AM                                                                                                                   
RON   TIDLER,   DETECTIVE,   ANCHORAGE   POLICE   DEPARTMENT,                                                                   
testified  via teleconference,  and  supported  this bill  on                                                                   
behalf  of the  Anchorage Police  Department  and the  Alaska                                                                   
Internet Crimes Against Children Task Force.                                                                                    
10:03:41 AM                                                                                                                   
ANNE CARPENETI,  ASSISTANT ATTORNEY  GENERAL, LEGAL  SERVICES                                                                   
SECTION-JUNEAU, CRIMINAL  DIVISION, DEPARTMENT OF  LAW, spoke                                                                   
to the  drafting of this  law. She explained  that it  is not                                                                   
necessary to put  "knowingly" into the bill; it  will be read                                                                   
that way by the judge.                                                                                                          
10:04:34 AM                                                                                                                   
Senator Olson questioned if this  bill would apply to any one                                                                   
who may be downloading sexual material.                                                                                         
Senator Wielechowski  replied that  the bill only  applies to                                                                   
convicted sex offenders.                                                                                                        
Co-Chair Stedman  referenced an earlier presentation  on this                                                                   
issue and  noted the  ability of the  law enforcement  arm to                                                                   
monitor  downloading  and  uploading of  sexual  material  by                                                                   
offenders.  He   reported  that   law  enforcement   has  the                                                                   
capability  of pinpointing neighborhoods  where the  computer                                                                   
resides.  He stressed  that the  scope and  magnitude of  sex                                                                   
offenders on the internet in Alaska is alarming.                                                                                
10:06:49 AM                                                                                                                   
Co-Chair  Hoffman  MOVED  to  REPORT  SB  185  (STA)  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal  notes. There being NO OBJECTION,  it was                                                                   
so ordered.                                                                                                                     
SB 185 (STA) was  REPORTED out of Committee with  a "do pass"                                                                   
recommendation  and accompanying new  zero fiscal  notes from                                                                   
the  Department   of  Corrections   and  the  Department   of                                                                   
Administration  and previously  published  fiscal notes  from                                                                   
the Department of Administration,  Department of Law, and the                                                                   
Department of Public Safety.                                                                                                    
10:07:56 AM                                                                                                                   
CSHB 152(RES)                                                                                                                 
     "An Act establishing a renewable energy project account                                                                    
     and a renewable energy fund and describing their uses                                                                      
     and purposes."                                                                                                             
Co-Chair Stedman spoke to this  first hearing of the bill. He                                                                   
described the intent was to hear  from the Bill's Sponsor and                                                                   
take public testimony.                                                                                                          
10:08:14 AM                                                                                                                   
Representative Bill Thomas presented  an overview of the bill                                                                   
that attempts to meet the energy  needs throughout Alaska. He                                                                   
declared that  the high  cost of fuel  has made it  difficult                                                                   
for Alaska  residents to  make ends meet  which has  a direct                                                                   
impact on Alaska's economy. He  reported the renewable energy                                                                   
options  in Alaska  are wind,  geothermal,  solar, tidal  and                                                                   
hydro.  Many  communities  in Alaska  have  been  researching                                                                   
cleaner, more cost-effective energy  sources but need funding                                                                   
to   help   harness  this   energy.   Representative   Thomas                                                                   
maintained  that HB  152 will  establish  a renewable  energy                                                                   
fund, administrated  by the Alaska  Energy Authority,  and an                                                                   
advisory  committee appointed  by the  Governor from  various                                                                   
utility, environmental,  business, state and  Native interest                                                                   
groups.  He described  the  fund as  offering  both loan  and                                                                   
grant options  for applicants to give pursue  valid renewable                                                                   
energy source  in their areas. Representative  Thomas stated,                                                                   
for the record,  that twenty three House members  and fifteen                                                                   
members of the Senate support this bill.                                                                                        
Co-Chair  Stedman referenced  a  request for  a $300  million                                                                   
endowment but questioned what  other funding might be used to                                                                   
capitalize this process.                                                                                                        
10:12:35 AM                                                                                                                   
Representative  Thomas remarked  that when  the bill  started                                                                   
last  year,  there  was  no  initial  plan  for  funding.  He                                                                   
informed  the  Committee  that   the  Governor  offered  $250                                                                   
million  into a renewable  energy  plan and  now the bill  is                                                                   
trying  to move  along because  of the  large Alaska  surplus                                                                   
this year. He noted that the $300  million, at seven percent,                                                                   
would provide  a $21 million per  year fund to start  many of                                                                   
these projects  and hopefully add additional  monies over the                                                                   
years.  Senator Elton  questioned on  Page 4,  line 1,  which                                                                   
refers  "to be  eligible  for  a grant  it  must  be a  hydro                                                                   
electric  facility."  He  questioned   if  "facility"  covers                                                                   
intertidal or just the hydroelectric project.                                                                                   
Representative   Johnson  believed   this   to  include   the                                                                   
intertidal line where the communities need to be linked.                                                                        
Senator  Elton asked  if this  would be  the same  definition                                                                   
under a loan component of the program.                                                                                          
10:15:18 AM                                                                                                                   
Senator Dyson  questioned that since  Alaska has some  of the                                                                   
largest coal deposits in America why was not coal included.                                                                     
Representative Thomas  replied that coal is  not considered a                                                                   
renewable energy.  He reported  that natural gas  was allowed                                                                   
because  there  is a  place  between Fairbanks  and  Canadian                                                                   
border  where there  is no  wind  or tidal  resources so  the                                                                   
natural  gas  pipeline  gas  will  be  allowed  at  the  last                                                                   
Senator  Dyson pressed  that under  this bill  why could  not                                                                   
coal be used  as the last alternative.  Representative Thomas                                                                   
replied  that the  bill  was trying  to  deal with  renewable                                                                   
energy, not fossil fuel.                                                                                                        
10:17:44 AM                                                                                                                   
Representative  Thomas  continued  that  when this  bill  was                                                                   
being  drafted three  years ago,  coal  did not  have a  good                                                                   
reputation compared to natural  gas. He stressed that natural                                                                   
gas would be allowed as it would be following the highway.                                                                      
10:18:59 AM                                                                                                                   
Co-Chair Hoffman  asked if the  advisory committee on  Page 5                                                                   
was  so that  the Legislature  could adjust  the projects  as                                                                   
they saw fit.                                                                                                                   
10:19:24 AM                                                                                                                   
JOHN  BITNEY, STAFF,  REPRESENTATIVE  JOHN HARRIS,  disclosed                                                                   
that the advisory  committee was being formed to  help set up                                                                   
the methodology  to rank and  score projects after  they have                                                                   
been received  by the  Alaska Energy  Authority. He  stressed                                                                   
that  any funds  for  grants available  would  be subject  to                                                                   
Co-Chair Hoffman  questioned that  once submitted  what would                                                                   
be  the role  of the  Legislature in  reviewing or  adjusting                                                                   
that  list.  Mr.  Bitney responded  that  the  program  would                                                                   
operate  like   other  programs  that  are   ranked,  scored,                                                                   
evaluated  and presented  to the  Legislature. He  reiterated                                                                   
that  the  advisory  committee  would  give  the  Legislature                                                                   
10:21:07 AM                                                                                                                   
Co-Chair Stedman  questioned if an endowment  of $300 million                                                                   
was  created   yielding  approximately  $15  million   to  be                                                                   
expensed would this remove the  Legislature entirely from the                                                                   
process. Mr. Bitney  responded that there is  no intention to                                                                   
remove the Legislature  from the process since  the funds are                                                                   
subject to appropriation.                                                                                                       
Co-Chair Stedman  addressed a  scenario where there  would be                                                                   
$15  million on  the  table with  high  expectation that  the                                                                   
Legislature would fund the projects submitted.                                                                                  
10:23:37 AM                                                                                                                   
Mr.  Bitney  responded  that  there are  a  large  number  of                                                                   
projects and  he sees an endowment  of $15 million as  not an                                                                   
outstanding  amount of  money  to get  many projects  working                                                                   
since some can  be expensive and large scale.  He noted that,                                                                   
if the  Legislature chooses, it  may want enlarge  the annual                                                                   
amount.  Mr. Bitney  thought it  would  be interesting  which                                                                   
projects  will  be  up  for  the   first  go  around  and  he                                                                   
anticipated there would be a lot of them.                                                                                       
Co-Chair Stedman questioned if  one of the projects alone was                                                                   
budgeted at $500 million. Mr. Bitney agreed.                                                                                    
10:25:26 AM                                                                                                                   
Senator  Elton   responded  that  there  is   talk  that  the                                                                   
Legislature has a  lot of authority in granting  these loans,                                                                   
but in  Section 2,  it simply states  that the authority  and                                                                   
consultation  for   the  projects  ride  with   the  advisory                                                                   
committee.  He remarked that  it seems  to give the  advisory                                                                   
committee  the  power to  make  a  loan  or provide  a  grant                                                                   
outside the  Legislature. Mr.  Bitney responded that  he does                                                                   
not see how to get around the  appropriation authority of the                                                                   
Legislature.  Senator Elton  asked if  anything in this  bill                                                                   
relinquishes  the authority  of the  Legislature. Mr.  Bitney                                                                   
responded   that  there   are   other  funds   that  are   an                                                                   
appropriation  given  every year  and  the agency  is  giving                                                                   
authority for those grants.                                                                                                     
Senator Elton asked if the new  director of the Alaska Energy                                                                   
Agency is an employee of the Governor  and if this bill needs                                                                   
to accommodate  that switch. Senator  Elton advised  it could                                                                   
be  awkward  in  potentially  giving  the  authority  to  the                                                                   
Co-Chair Stedman  asked that the agency return  with comments                                                                   
for Senator Elton's questions.                                                                                                  
10:29:32 AM                                                                                                                   
Co-Chair  Hoffman supported  the  concept  but mentioned  two                                                                   
problems. He emphasized  that there are viable  projects that                                                                   
need to  proceed and  it is important  to respond  to today's                                                                   
oil prices by implementing these  alternative energy projects                                                                   
now.  He  wondered  if  that  could  be  addressed  and  also                                                                   
questioned where  the agency  envisioned receiving  the money                                                                   
to jump-start this fund and how large could it get.                                                                             
10:30:56 AM                                                                                                                   
Mr. Bitney  remarked that a  memo was submitted  requesting a                                                                   
$300 million appropriation into  the fund for the first year.                                                                   
Co-Chair  Hoffman   raised  this  question   because  Senator                                                                   
Murkowski  mentioned  an energy  bill  that  passed the  U.S.                                                                   
Congress and  wondered if there  were funds attached  to that                                                                   
legislation. He pointed out that  if there were a possibility                                                                   
for matching  funds from the  federal government it  could be                                                                   
mentioned that Alaska was stepping  up to the plate with this                                                                   
Co-Chair Hoffman  asked if the Agency should  be pursuing and                                                                   
funding  existing projects  first so  Alaskans can see  their                                                                   
energy rates reduced  much earlier and at a  faster pace. Mr.                                                                   
Bitney  responded he  would check with  Senator Murkowski  to                                                                   
see  if  this  new  legislation   in  Congress  will  involve                                                                   
matching  federal funds.  Mr.  Bitney communicated  that  the                                                                   
agency would  like to see the  existing projects met  in this                                                                   
year's capital budget process.                                                                                                  
10:35:01 AM                                                                                                                   
Co-Chair  Stedman pointed  out that  one issue  today is  the                                                                   
high  revenue  stream.  He emphasized  that  there  are  many                                                                   
questions  on  the type  and  selection of  renewable  energy                                                                   
resources. He stressed that the  Legislature does not want to                                                                   
select less beneficial  choices to the citizens  of the state                                                                   
based  on  political  pressure.  He felt  everyone  would  be                                                                   
better served in concentrating  on the process and policy and                                                                   
not allocating  several million to a particular  area without                                                                   
more study.                                                                                                                     
10:39:02 AM                                                                                                                   
CHRIS  ROSE,  EXECUTIVE  DIRECTOR,  RENEWABLE  ENERGY  ALASKA                                                                   
PROJECTS testified  via teleconference  and supported  HB 152                                                                   
with there  many members  throughout the  state. He  stressed                                                                   
that it is impossible to be competitive  in the world economy                                                                   
without a  stable source  of energy.  He believed when  there                                                                   
are no fossil  fuels involved, stable prices  occur. Mr. Rose                                                                   
noted  that this  is also  a local  entity  which can  supply                                                                   
local jobs. He concluded that  the development of an advisory                                                                   
energy  authority would  set up  a process  to start  testing                                                                   
these to get most viable projects.                                                                                              
10:42:29 AM                                                                                                                   
EARNEST  WEISS,  MAYOR,  CITY  OF  KING  COVE  testified  via                                                                   
teleconference  in support of  the bill.  He cited  that King                                                                   
Cove has, for more  than ten years, one of the  most prolific                                                                   
run-of-the-river hydro electric  facilities in the state that                                                                   
provides  more  than half  of  the community's  annual  power                                                                   
production.  He noted that  at twenty  four cents a  kilowatt                                                                   
hour, King Cove  had one of the lowest, single-site  costs of                                                                   
power among all  the communities in Alaska.  He asserted that                                                                   
the community  is looking  forward to  an even more  advanced                                                                   
facility for a stronger saving for its citizens.                                                                                
10:45:41 AM                                                                                                                   
GARY  HENNIGH,   CITY  ADMINISTRATOR,   CITY  OF   KING  COVE                                                                   
testified  via  teleconference,  and  supported  HB  152.  He                                                                   
reiterated that King  Cove decided in the early  90s to build                                                                   
this renewable energy  river hydro project and  it has proved                                                                   
a  smart   choice.  He   noted  that   the  methodology   for                                                                   
establishing  the new  loans  and grants  from  the new  fund                                                                   
should focus on places like King Cove.                                                                                          
10:47:55 AM                                                                                                                   
PHIL STEYER,  DIRECTOR OF  CORPORATE COMMUNICATIONS,  CHUGACH                                                                   
ELECTRIC testified  via teleconference in support  of HB 152.                                                                   
He would  like to raise  the ratio from ninety-three  percent                                                                   
of natural  gas and seven  percent hydroelectric to  a higher                                                                   
amount of hydroelectric.                                                                                                        
AT EASE: 10:48:45 AM                                                                                                          
RECONVENED: 10:49:04 AM                                                                                                       
10:49:07 AM                                                                                                                   
SCOTT SALINE,  REFRIGERATION CONTRACTOR, SITKA  testified via                                                                   
teleconference, and referred to  Section 3, line 19, "provide                                                                   
for renewable  power production."  He expounded on  renewable                                                                   
BTU production.  He stressed that  the more efficient  method                                                                   
is GO thermal  exchange heating, using the heat  of the ocean                                                                   
or Yukon River to reject heat into people's home.                                                                               
10:53:20 AM                                                                                                                   
BILL  LEIGHTY, DIRECTOR,  THE  LEIGHTY FOUNDATION,  supported                                                                   
the  bill. He  noted that  anything achieved  in Alaska  will                                                                   
have great  demonstration value within  the state and  to the                                                                   
RECESSED: 10:55:25 AM                                                                                                         
RECONVENED: 4:55:44 PM                                                                                                        
The meeting was adjourned at 4:56 PM                                                                                            

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