Legislature(2009 - 2010)SENATE FINANCE 532

02/23/2009 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
*+ SB 115 RURAL ENERGY ASSISTANCE PROGRAM TELECONFERENCED
Heard & Held
*+ SB 116 APPROP: RURAL ENERGY ASSISTANCE TELECONFERENCED
Heard & Held
+ SB 93 MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT TELECONFERENCED
Heard & Held
Bills Previously Heard/Scheduled
                  SENATE FINANCE COMMITTEE                                                                                      
                     February 23, 2009                                                                                          
                         9:04 a.m.                                                                                              
                                                                                                                                
9:04:47 AM                                                                                                                    
                                                                                                                                
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate  Finance Committee meeting                                                                   
to order at 9:04 a.m.                                                                                                           
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Kim Elton                                                                                                               
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Jay  Livey, Staff,  Senator Lyman  Hoffman, Sponsor;  Senator                                                                   
Joe Paskvan, Sponsor.                                                                                                           
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Regan Mattingly,  State Affairs  Coordinator, Alaska  Primary                                                                   
Care  Association, Anchorage;  Pat  Luby, Advocacy  Director,                                                                   
Alaska  Association   of  Retired  Persons,   Anchorage;  Tom                                                                   
Lakosh,  Self,   Anchorage;  Melody  Nibeck,   Tribal  Energy                                                                   
Program Manager, Bristol Bay Native  Association, Dillingham;                                                                   
Norman  Anderson,   Economic  Development   Program  Manager,                                                                   
Bristol  Bay Native  Association,  Dillingham; Myron  Naneng,                                                                   
President, Association of Village  Council Presidents, Yukon-                                                                   
Kuskokwim   Delta   Region;   James   Conner,   Air   Quality                                                                   
Specialist,  Fairbanks North  Star  Borough; Nadine  Winters,                                                                   
Assembly Member, Fairbanks North Star Borough.                                                                                  
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 93     "An Act relating to a municipal property tax                                                                          
          credit for an improvement that aids in improving                                                                      
          air quality."                                                                                                         
                                                                                                                                
          SB 93 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
SB 115    "An   Act  creating   a   rural  community   energy                                                                   
          assistance program; and providing for an effective                                                                    
          date."                                                                                                                
                                                                                                                                
          SB 115 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SB 116    "An Act  making a special appropriation  for energy                                                                   
          assistance for rural communities; and providing                                                                       
          for an effective date."                                                                                               
                                                                                                                                
          SB 116 was HEARD and HELD in Committee for further                                                                    
          consideration.                                                                                                        
                                                                                                                                
SENATE BILL NO. 115                                                                                                           
                                                                                                                                
     "An Act creating a rural community energy assistance                                                                       
     program; and providing for an effective date."                                                                             
                                                                                                                                
JAY LIVEY, STAFF,  SENATOR LYMAN HOFFMAN,  SPONSOR, explained                                                                   
that  SB  115 temporarily  establishes  the  rural  community                                                                   
assistance  program.  The intent  of  the legislation  is  to                                                                   
provide  relief to Alaskan  residents  who are struggling  to                                                                   
pay  heating  costs  this winter.  Most  residents  of  rural                                                                   
Alaska heat their  homes with fuel oil. The price  of oil has                                                                   
increased in rural Alaska, even  though the price of a barrel                                                                   
of oil has decreased.  Most of the oil for the  coming winter                                                                   
was delivered prior to the decline of fuel oil prices.                                                                          
                                                                                                                                
Mr. Livey reported that there  is not a lack of fuel in rural                                                                   
Alaska except in  a few isolated instances. Most  of the fuel                                                                   
stocks are adequate; however,  many people do not have enough                                                                   
money to purchase  fuel, electricity, and  other necessities.                                                                   
He pointed  to a Division  of Community and Regional  Affairs                                                                   
report,  "Current Community  Conditions:  Fuel Prices  Across                                                                   
Alaska,  November 2008  Update" (Copy  on File).  Out of  100                                                                   
communities  surveyed, 27  pay more  than $7  per gallon  for                                                                   
heating fuel.                                                                                                                   
                                                                                                                                
9:09:03 AM                                                                                                                    
                                                                                                                                
Mr.  Livey explained  that a  person burning  800 gallons  of                                                                   
fuel  each  year--a fairly  conservative  amount--will  spend                                                                   
approximately  $5700 per year  to heat  their home.  In 2007,                                                                   
the  Institute   of  Social  and  Economic   Research  (ISER)                                                                   
reported  that  the  average  per  capita  income  for  small                                                                   
villages    around   Bethel    was   approximately    $16,000                                                                   
("Understanding  Alaska's  Remote  Rural  Economy,  by  Scott                                                                   
Goldsmith,  UA  Research  Summary  No.  10"  Copy  on  File).                                                                   
Consequently,  over 35  percent  of an  average  individual's                                                                   
income can be  used for heating fuel alone.  In addition, the                                                                   
2007  ISER  report  noted  that Bethel  fuel  costs  were  92                                                                   
percent  higher than Anchorage  costs.  The ISER report  also                                                                   
covers food costs in rural Alaska.                                                                                              
                                                                                                                                
Mr.  Livey described  other  methods of  distributing  energy                                                                   
assistance, including  the Bulk Fuel Loan Program,  Bulk Fuel                                                                   
Bridge  Loan  Program,  and  the  governor's  emergency  fuel                                                                   
program;  the   programs  are  designed  primarily   to  help                                                                   
communities  purchase  fuel when  there  is  a shortage.  The                                                                   
sponsors believe SB 115 would  function differently. There is                                                                   
enough fuel, but people cannot afford to buy it.                                                                                
                                                                                                                                
Mr. Livey added  that the legislation is not  intended to fix                                                                   
the income problems  in rural Alaska or to  address long-term                                                                   
fuel issues in rural Alaska. The  intent is to provide people                                                                   
with  a  way of  getting  through  the  rest of  the  current                                                                   
heating season.                                                                                                                 
                                                                                                                                
9:12:40 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  clarified  that  the  provision  would  be                                                                   
repealed June  30, 2010. He asked  about language on  line 12                                                                   
of the bill referring to departmental regulations.                                                                              
                                                                                                                                
Co-Chair  Hoffman informed  the committee  that his  staff is                                                                   
looking at ways to change the  legislation so it would not be                                                                   
necessary to go  through the regulatory process.  The goal is                                                                   
to make cash available immediately.                                                                                             
                                                                                                                                
Co-Chair  Stedman  reiterated  that  the  intent  is  to  get                                                                   
immediate  relief for the  coming winter.  He referred  to an                                                                   
impending  fiscal   note  by  the  Department   of  Commerce,                                                                   
Community and Economic Development.                                                                                             
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
9:14:15 AM                                                                                                                    
                                                                                                                                
REGAN MATTINGLY,  STATE AFFAIRS  COORDINATOR, ALASKA  PRIMARY                                                                   
CARE   ASSOCIATION    (APCA),   ANCHORAGE    (testified   via                                                                   
teleconference),  testified   in  support  of   SB  115.  The                                                                   
association   represents    26   community    health   center                                                                   
organizations operating 141 clinics  across the state. Clinic                                                                   
directors have  increasingly reported that  revenues intended                                                                   
for patient services are being  crowded out and redirected to                                                                   
cover high energy  costs in facilities. Patient  access could                                                                   
be affected;  APCA  is requesting  that non-profit  community                                                                   
health  center organizations  and other  primary care  safety                                                                   
net  providers  as  well as  local  tribal  community  health                                                                   
center organizations  be considered  eligible for  assistance                                                                   
under the program.                                                                                                              
                                                                                                                                
PAT LUBY,  ADVOCACY DIRECTOR,  ALASKA ASSOCIATION  OF RETIRED                                                                   
PERSONS,  ANCHORAGE  (AARP) (testified  via  teleconference),                                                                   
reported  that AARP  strongly supports  SB 115.  Many of  the                                                                   
younger people  have had to leave rural  communities, leaving                                                                   
communities  dominated  by  older people  and  children,  the                                                                   
people most susceptible to hypothermia.                                                                                         
                                                                                                                                
TOM LAKOSH,  SELF, ANCHORAGE (testified via  teleconference),                                                                   
had concerns  about the bill  supplying energy  subsidies for                                                                   
communities rather  than individuals  in need. He  asked that                                                                   
the  bill be  specifically  amended  to provide  subsidy  for                                                                   
individuals and/or  organizations in direct need  rather than                                                                   
a wholesale subsidy of communities.  He thought the state had                                                                   
indebted  itself through  the  resource  rebate the  previous                                                                   
year.                                                                                                                           
                                                                                                                                
9:19:19 AM                                                                                                                    
                                                                                                                                
Senator Thomas  pointed out that  the legislation  is waiting                                                                   
for language to assure dispersion  of funds to individuals in                                                                   
communities.                                                                                                                    
                                                                                                                                
MELODY  NIBECK, TRIBAL  ENERGY PROGRAM  MANAGER, BRISTOL  BAY                                                                   
NATIVE   ASSOCIATION   (BBNA),  DILLINGHAM   (testified   via                                                                   
teleconference),  testified in  support  of the  legislation.                                                                   
She said the communities of Bristol  Bay are facing high fuel                                                                   
prices  that impact  electric,  gas, and  food bills.  People                                                                   
often have to choose between paying  for fuel and other basic                                                                   
necessities. She stressed that  Dillingham heating fuel costs                                                                   
$6.10  per  gallon  and  food is  220  percent  of  Anchorage                                                                   
prices.  Small   villages  pay   more.  The  association   is                                                                   
committed to  being part of  finding a long-term  solution to                                                                   
energy  challenges in  rural Alaska and  recognized  that the                                                                   
bill was providing one-time assistance.                                                                                         
                                                                                                                                
Ms.  Nibeck  informed  the committee  that  the  Bristol  Bay                                                                   
Region has one first-class city,  12 second-class cities, and                                                                   
18 unincorporated communities.  Since all communities equally                                                                   
face high  prices, BBNA  hopes the  bill will clearly  define                                                                   
"rural community."                                                                                                              
                                                                                                                                
NORMAN  ANDERSON,   ECONOMIC  DEVELOPMENT   PROGRAM  MANAGER,                                                                   
BRISTOL  BAY NATIVE  ASSOCIATION,  DILLINGHAM (testified  via                                                                   
teleconference),  spoke  in support  of  the legislation.  He                                                                   
reported that  increased assistance  has been needed  because                                                                   
of  economic  challenges,  including low  salmon  prices.  He                                                                   
explained that the people in the  region are proud and rarely                                                                   
ask  for assistance.  The people  have  done everything  they                                                                   
possibly  could to  be able  to sustain  themselves, but  the                                                                   
increasing price of fuel has made  it more and more difficult                                                                   
to make ends meet.  He spoke for the more remote  villages in                                                                   
the region  where people cannot  find jobs and  the necessary                                                                   
income.                                                                                                                         
                                                                                                                                
9:24:51 AM                                                                                                                    
                                                                                                                                
MYRON  NANENG,  PRESIDENT,  ASSOCIATION  OF  VILLAGE  COUNCIL                                                                   
PRESIDENTS,  YUKON-KUSKOKWIM   DELTA  REGION  (testified  via                                                                   
teleconference),  spoke  in  strong  support of  SB  115.  He                                                                   
reported that fuel  costs range from $6 to $11  per gallon, a                                                                   
high  amount   for  people  in   the  village   with  limited                                                                   
resources.  The  fuel  is needed  for  gathering  subsistence                                                                   
resources. In  the villages a gallon  of milk can cost  up to                                                                   
$13 a  gallon. People have to  choose between fuel  and food.                                                                   
He emphasized the  hardships in the region and  the real need                                                                   
for the energy assistance. The  association has provided many                                                                   
with low-income  energy assistance, but  it is not  enough to                                                                   
buy the necessary fuel.                                                                                                         
                                                                                                                                
Mr. Naneng  added that people  in the region have  lost their                                                                   
economic base due to poor management  of fisheries. He stated                                                                   
that  if the  fisheries had  been managed  well, some  people                                                                   
would  have  been able  to  manage  through the  winter.  The                                                                   
people  are bearing  the burden  of conservation  as well  as                                                                   
providing for their families.                                                                                                   
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
9:29:28 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  raised  the  issue  of  fuel  delivery  in                                                                   
Western Alaska.                                                                                                                 
                                                                                                                                
Co-Chair Hoffman noted  that SB 115 was designed  only to get                                                                   
Alaskans  through  the  following winter.  He  stressed  that                                                                   
there  is  need for  a  long-term  solution. He  referred  to                                                                   
legislation from  the previous year for capping  fuel prices.                                                                   
He  acknowledged that  price capping  might not  be an  ideal                                                                   
solution.  He   thought  SB  115  could  be   fine-tuned  and                                                                   
implemented.  He reiterated his  intent that the  legislation                                                                   
be as broad as possible to include  all people in Alaska, and                                                                   
his desire to avoid the time-consuming regulations process.                                                                     
                                                                                                                                
Co-Chair  Stedman asked  about  the status  of  ports in  the                                                                   
region. Co-Chair  Hoffman answered that ice-free  ports begin                                                                   
below  Naknek. He  added that  the delivery  schedule is  the                                                                   
problem as  many communities did  not get their fuel  and had                                                                   
to have it flown in.                                                                                                            
                                                                                                                                
9:32:03 AM                                                                                                                    
                                                                                                                                
Senator Ellis  stated support  for the legislation.  He asked                                                                   
whether  clinics were  considered for  fuel relief.  Co-Chair                                                                   
Hoffman  hoped to  have the  issue  addressed. Senator  Ellis                                                                   
emphasized need in rural health clinics.                                                                                        
                                                                                                                                
SB  115  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 116                                                                                                           
                                                                                                                                
     "An Act making a special appropriation for energy                                                                          
     assistance for rural communities; and providing for an                                                                     
     effective date."                                                                                                           
                                                                                                                                
9:33:34 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  explained SB 116 as the  appropriation bill                                                                   
to  fund SB  115.  The appropriation  is  for  $5 million  at                                                                   
present.  He did  not  want the  program  to be  underfunded;                                                                   
whatever  is not  utilized will  be returned  to the  general                                                                   
fund.                                                                                                                           
                                                                                                                                
Co-Chair  Stedman  queried fund  source  identification.  Co-                                                                   
Chair  Hoffman answered  that  at this  point  the only  fund                                                                   
being considered is the general fund.                                                                                           
                                                                                                                                
9:35:04 AM     AT EASE                                                                                                        
9:35:45 AM     RECONVENED                                                                                                     
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
MELODY  NIBECK, TRIBAL  ENERGY PROGRAM  MANAGER, BRISTOL  BAY                                                                   
NATIVE   ASSOCIATION   (BBNA),  DILLINGHAM   (testified   via                                                                   
teleconference), testified in support of the legislation.                                                                       
                                                                                                                                
9:36:48 AM                                                                                                                    
                                                                                                                                
NORMAN  ANDERSON,   ECONOMIC  DEVELOPMENT   PROGRAM  MANAGER,                                                                   
BRISTOL  BAY NATIVE  ASSOCIATION,  DILLINGHAM (testified  via                                                                   
teleconference)  spoke  in  support of  the  legislation.  He                                                                   
emphasized how the bill would impact villages.                                                                                  
                                                                                                                                
REGAN MATTINGLY,  STATE AFFAIRS  COORDINATOR, ALASKA  PRIMARY                                                                   
CARE   ASSOCIATION    (APCA),   ANCHORAGE    (testified   via                                                                   
teleconference),  testified in  support of  SB 116.  He urged                                                                   
the  committee to  consider health  clinics when  formulating                                                                   
the energy assistance program.                                                                                                  
                                                                                                                                
PAT LUBY,  ADVOCACY DIRECTOR,  ALASKA ASSOCIATION  OF RETIRED                                                                   
PERSONS,  ANCHORAGE  (AARP) (testified  via  teleconference),                                                                   
testified in support of SB 116.                                                                                                 
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
SB  116  was   HEARD  and  HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
SENATE BILL NO. 93                                                                                                            
                                                                                                                                
     "An Act relating to a municipal property tax credit for                                                                    
    an improvement that aids in improving air quality."                                                                         
                                                                                                                                
9:38:56 AM                                                                                                                    
                                                                                                                                
SENATOR JOE PASKVAN, SPONSOR, explained SB 93, the Municipal                                                                    
Air Quality Property Tax Credit (from Sponsor Statement,                                                                        
Copy on File):                                                                                                                  
                                                                                                                                
     Some communities in Alaska  have been designated as non-                                                                   
     attainment  areas for PM  2.5 by the EPA  [Environmental                                                                   
     Protection  Agency]. Based  on the  requirements of  the                                                                   
     Clean  Air  Act,  the state  and  those  impacted  local                                                                   
     governments  have  three  years  to  develop  attainment                                                                   
     plans  designed  to bring  air quality  into  compliance                                                                   
     with federal air standards.                                                                                                
                                                                                                                                
Senator  Paskvan reported  that  interior Alaska  has an  air                                                                   
inversion,  which  creates a  problem  in cold  weather  when                                                                   
heating requirements  are at  the highest. Trapped  particles                                                                   
results  in  the  violation  of the  2.5  air  standards.  He                                                                   
continued:                                                                                                                      
                                                                                                                                
     SB  93  is  needed  as  a  first  step  to  allow  local                                                                   
     municipalities  the latitude  in  developing tax  credit                                                                   
     programs  to address  the  important  public health  and                                                                   
     community  compliance issues that  result from  poor air                                                                   
     quality.                                                                                                                   
                                                                                                                                
     Senate Bill 93 is designed  to provide optional tools to                                                                   
     municipalities  that can  be used  to create  incentives                                                                   
     for individuals to take actions  that will improve local                                                                   
     air quality and reduce fuel consumption.                                                                                   
                                                                                                                                
     SB  93 expands  the discretion  of  municipalities in  a                                                                   
     manner  that  allows,  by  ordinance,  the  creation  of                                                                   
     programs  that  will  offer  property  tax  credits  for                                                                   
     actions  that the local  governing body determines  will                                                                   
     improve   air   quality.   This   bill   requires   that                                                                   
     eligibility, conditions  and other criteria  for the tax                                                                   
     credits be established by ordinance.                                                                                       
                                                                                                                                
     Examples of how this proposed  legislation might be used                                                                   
     by a municipality include:                                                                                                 
                                                                                                                                
         · Incentives to residents to exchange old-style                                                                        
           wood  stoves for EPA  certified wood  stoves. Data                                                                   
           show    that    EPA    certified    wood    stoves                                                                   
           significantly  reduce  fine particulate  emissions                                                                   
           over  non-EPA stoves.  It  is in  the interest  of                                                                   
           any  community  with   air  quality  nonattainment                                                                   
           issues  to have citizens  who choose to  heat with                                                                   
           wood  do so in  the most environmentally  friendly                                                                   
           way.                                                                                                                 
         · Incentives    to    residences    or    commercial                                                                   
           businesses  to improve  the  energy efficiency  of                                                                   
           their  property.  Reduced fuel  consumption  would                                                                   
           lead  to reduced  emissions from  area heating  or                                                                   
           electricity   generation.   Incentives  could   be                                                                   
           based  on calculated  BTU savings, MW  reductions,                                                                   
           etc.                                                                                                                 
         · Incentives to convert from carbon based energy                                                                       
           consumption  to  alternative   energy  generation.                                                                   
           This  could involve  tax credits for  construction                                                                   
           and  use  of a  solar  array  or wind  turbine  to                                                                   
           power/heat residential or commercial facilities.                                                                     
                                                                                                                                
         The proposed legislation  would create a  full range                                                                   
         of options for a  local municipality to  address air                                                                   
         quality issues,  rather  than just  restriction  and                                                                   
         enforcement based options.                                                                                             
                                                                                                                                
Senator Paskvan referenced the attached zero fiscal note.                                                                       
                                                                                                                                
9:43:17 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  asked  if  the  borough  would  incur  EPA                                                                   
penalties  without  air  quality  clean-up.  Senator  Paskvan                                                                   
replied that the  federal government can impose  sanctions if                                                                   
nonattainment continues.  One immediate effect  was that Fort                                                                   
Wainwright  failed  consideration  for  a  brigade  of  5,000                                                                   
striker members  because of  nonattainment of 2.5  standards.                                                                   
He  thought  that  kind  of  sanction  would  continue  until                                                                   
compliance was reached.                                                                                                         
                                                                                                                                
Senator  Thomas  asked  if transportation  funding  would  be                                                                   
affected as  well by nonattainment.  Senator Paskvan  replied                                                                   
that the  region not  only lost  the troops,  but could  lose                                                                   
military  bases altogether.  Moving  the legislation  forward                                                                   
would demonstrate intent to come into compliance.                                                                               
                                                                                                                                
9:46:07 AM                                                                                                                    
                                                                                                                                
Senator Elton added  that as energy costs have  gone up, home                                                                   
owners are being forced out of  less expensive energy sources                                                                   
such as wood stoves because of compliance issues.                                                                               
                                                                                                                                
Senator  Huggins asked  if Fairbanks,  Anchorage, and  Juneau                                                                   
were under  the EPA standards.  Senator Paskvan did  not know                                                                   
which  communities  were  in   nonattainment.  The  statute's                                                                   
language  is broad  enough  to allow  a  local government  to                                                                   
provide tax  credits for the  increased energy  efficiency of                                                                   
existing structures as well as  for conversion from a carbon-                                                                   
based   source  to   an   alternative   energy  source.   The                                                                   
legislation is not only for communities  in nonattainment; it                                                                   
provides good social policy.                                                                                                    
                                                                                                                                
Senator Huggins  asked if someone  who owned multiple  rental                                                                   
properties  could  take  advantage of  the  program.  Senator                                                                   
Paskvan answered  that the legislation covers  residences and                                                                   
commercial   businesses.   The   local  community   has   the                                                                   
discretion to decide who they  want to benefit, the amount of                                                                   
the tax credit, and the period of time covered.                                                                                 
                                                                                                                                
9:49:41 AM                                                                                                                    
                                                                                                                                
Senator Huggins  asked if military communities  were exempted                                                                   
out of  the calculation.  Senator Paskvan  replied that  Fort                                                                   
Wainwright was specifically not exempted.                                                                                       
                                                                                                                                
Senator Olson  asked the  cost to  the municipalities  of the                                                                   
tax credit. Senator Paskvan reported  that those calculations                                                                   
had not been done on the local  level. The legislation is the                                                                   
first step  to promote  implementation  of the standard.  The                                                                   
intent is  to leave local  municipalities free to  decide how                                                                   
they want to approach the issue.                                                                                                
                                                                                                                                
Co-Chair Stedman opened public testimony.                                                                                       
                                                                                                                                
JAMES CONNER,  AIR QUALITY  SPECIALIST, FAIRBANKS  NORTH STAR                                                                   
BOROUGH (testified  via teleconference), spoke  in support of                                                                   
the legislation. He read from a statement:                                                                                      
                                                                                                                                
     Within the greater Fairbanks  area, the fine particulate                                                                   
     pollution fails  to meet the EPA's National  Ambient Air                                                                   
     Quality  Standard  20  to  30 times  each  winter.  This                                                                   
     health-based  standard  was  changed in  September  2006                                                                   
     based    on   the   EPA's    Science   Advisory    Board                                                                   
     recommendations,  lowering  the allowable  concentration                                                                   
     of fine particulates from  65 to 35 micrograms per cubic                                                                   
     meter (ug/m3)  for a 24-hour  average. There is  also an                                                                   
     annual  standard  that  was  left  at  15  ug/m3.  These                                                                   
     recommendations  were  based  on many  extensive  health                                                                   
     studies   over  a   five-year   period.  These   studies                                                                   
     indicated  that   even  short  term  exposure   to  fine                                                                   
     particulates can result in  new cases of respiratory and                                                                   
     heart disease.  This is truly a public  health issue, in                                                                   
     addition to being an economic issue.                                                                                       
                                                                                                                                
     The  fine particulate  pollution is  exacerbated in  the                                                                   
     winter because  the surrounding hills, the  stagnant air                                                                   
     flow, and  temperature inversions trap  the particulates                                                                   
     produced   locally.  These   are   coming  mostly   from                                                                   
     transportation and space heating.                                                                                          
                                                                                                                                
     During  the summer,  space heating  demands are  reduced                                                                   
     and the pollution produced  is cleared out with wind and                                                                   
     rain  before  it  can accumulate  to  dangerous  levels,                                                                   
     except  when  we  experience  wildland  fires.  We  have                                                                   
     experienced  concentrations  above  1000  ug/m3  in  the                                                                   
     summer due  to wildland fires,  but we are  permitted to                                                                   
     exclude  these natural  emissions from  our 24-hour  and                                                                   
     annual averages,  because they are not  man-made, unless                                                                   
     we start the fires as a resource management strategy.                                                                      
                                                                                                                                
     In  Fairbanks, we  depend  on the  clean  summer air  to                                                                   
     average  with the  polluted air  in the  winter to  stay                                                                   
     below the annual  limit of 15 ug/m3. This  is one reason                                                                   
     it is  important to  reduce the  number and severity  of                                                                   
     the winter emissions. If  we violate the winter average,                                                                   
     we  need  to  extend  those  winter  controls  into  the                                                                   
     summer.                                                                                                                    
                                                                                                                                
9:54:48 AM                                                                                                                    
                                                                                                                                
     The timeline associated with  the EPA action proceeds 90                                                                   
     days   from  the   publication   of  the   nonattainment                                                                   
     designation  in the  federal register.  That starts  the                                                                   
     clock,  and then we  have three years  to submit  to the                                                                   
     EPA  an air quality  control plan  demonstrating  how we                                                                   
     will attain  the standard  within five years.  Once that                                                                   
     federal  register  designation  is  published,  all  new                                                                   
     construction  projects in  the designated  nonattainment                                                                   
     area are  then required  to demonstrate conformity  with                                                                   
     an approved  air quality control plan, the  plan we have                                                                   
     three years to submit, and  requires EPA approval. Since                                                                   
     this plan takes  time to create, there will  likely be a                                                                   
     period  when  conformity  cannot be  met,  and  economic                                                                   
     development of the area can  be affected. However, there                                                                   
     is  a  one-year  grace  period  that  starts  with  that                                                                   
     federal register designation  date where new projects do                                                                   
     not have  to demonstrate conformity. If  the state fails                                                                   
     to submit  a plan  or show progress  in cleaning  up the                                                                   
     air, the EPA can begin to  withhold federal funds, first                                                                   
     in  the designated  area  and eventually  to the  entire                                                                   
     state.                                                                                                                     
                                                                                                                                
     An area  or a county is  allowed one exceedance  of this                                                                   
     health  standard  per  year. The  second  exceedance  is                                                                   
     considered  a violation that  can bring a  nonattainment                                                                   
     designation to the area.  The number and severity of the                                                                   
     exceedances   after  that  simply  further   jeopardizes                                                                   
     public   health  and   the   economic  environment   for                                                                   
     development, and  the difficulty to eventually  meet the                                                                   
     standard.                                                                                                                  
                                                                                                                                
     SB 93 gives the Fairbanks  North Star Borough a means to                                                                   
     provide  a   voluntary  incentive  program   to  borough                                                                   
     residences and  businesses to improve the  efficiency of                                                                   
     their  homes  and  businesses  in  a  manner  that  will                                                                   
     improve air quality and efficiency.  As the high cost of                                                                   
     energy has driven residents  to lower costing fuels such                                                                   
     as wood  and coal,  this bill  help further reduce  this                                                                   
     cost and higher emissions.                                                                                                 
                                                                                                                                
9:57:13 AM                                                                                                                    
                                                                                                                                
NADINE  WINTERS,   ASSEMBLY  MEMBER,  FAIRBANKS   NORTH  STAR                                                                   
BOROUGH (testified  via teleconference), spoke  in support of                                                                   
SB 93. Fairbanks has an air quality  issue and is looking for                                                                   
a way  to  protect the  health of  residents and  as well  as                                                                   
long-term  economic viability.  The bill  provides a  tool to                                                                   
meet both needs.                                                                                                                
                                                                                                                                
Co-Chair Stedman closed public testimony.                                                                                       
                                                                                                                                
Co-Chair Stedman  asked if there  would be a federal  penalty                                                                   
against  the state  if the  legislature  did not  act on  the                                                                   
bill. Senator Paskvan  answered that the penalty  would be on                                                                   
communities  that  are  in  nonattainment.   There  could  be                                                                   
various consequences,  including withdrawal of  federal funds                                                                   
for  highways.  He  thought  the   best  alternative  was  to                                                                   
establish policy to get local  municipalities to move towards                                                                   
attainment.                                                                                                                     
                                                                                                                                
SB  93   was  HEARD  and   HELD  in  Committee   for  further                                                                   
consideration.                                                                                                                  
                                                                                                                                
10:00:16 AM                                                                                                                   
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 10:00 AM.                                                                                          
                                                                                                                                
                                                                                                                                

Document Name Date/Time Subjects
CNN Article.pdf SFIN 2/23/2009 9:00:00 AM
SB 115
Community Survey.pdf SFIN 2/23/2009 9:00:00 AM
SB 115
SB_93_AML_Support.pdf SFIN 2/23/2009 9:00:00 AM
SB 93
SB_93_Back-Up.pdf SFIN 2/23/2009 9:00:00 AM
SB 93
SB_93_Fiscal_Note.pdf SFIN 2/23/2009 9:00:00 AM
SB 93
SB_93_Letter_From_Mayor.pdf SFIN 2/23/2009 9:00:00 AM
SB 93
SB_93_Sponsor_Statement.pdf SFIN 2/23/2009 9:00:00 AM
SB 93
LA Times Article.pdf SFIN 2/23/2009 9:00:00 AM
SB 115
Senate Bill 115 Sponsor Statement.doc SFIN 2/23/2009 9:00:00 AM
SB 115
UA Research Rural Economy.pdf SFIN 2/23/2009 9:00:00 AM
SB 115
Senate Bill 116 Sponsor Statement.doc SFIN 2/23/2009 9:00:00 AM
SB 116
SB 115 SB 116 APCA Support Lttr Energy Assistance Program 2-22-09.doc SFIN 2/23/2009 9:00:00 AM
SB 115
SB 116