Legislature(2009 - 2010)

04/09/2010 04:42 PM FIN


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* first hearing in first committee of referral
+ teleconferenced
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                 SENATE FINANCE COMMITTEE                                                                                       
                       April 9, 2010                                                                                            
                         4:42 p.m.                                                                                              
                                                                                                                                
                                                                                                                                
4:42:21 PM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair Stedman called the Senate Finance Committee                                                                            
meeting to order at 4:42 p.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Charlie Huggins, Vice-Chair                                                                                             
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Esther Kim,  Staff, Senator Lesil McGuire;  Denise Liccioli,                                                                    
Staff, Senator Donny Olson;  Senator Hollis French, Sponsor;                                                                    
Darwin  Peterson,  Staff,  Co-Chair Stedman;  Senator  Lesil                                                                    
McGuire, Sponsor; Senator  Bill Wielechowski, Sponsor; Miles                                                                    
Baker, Staff, Co-Chair Stedman                                                                                                  
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
None                                                                                                                            
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
SB 63     TRANSFER RESTRICTIONS ON TRUSTS                                                                                       
                                                                                                                                
          CSSB 63 (JUD) was REPORTED out of Committee with                                                                      
          a "do pass" recommendation and with zero FN 1                                                                         
          LAW.                                                                                                                  
                                                                                                                                
SB 172    ALASKA HEALTH CARE COMMISSION                                                                                         
                                                                                                                                
          CSSB 172 (FIN) was  REPORTED out of Committee with                                                                    
          a "do  pass" recommendation and with  a new fiscal                                                                    
          note  by  the  Department  of  Health  and  Social                                                                    
          Services.                                                                                                             
                                                                                                                                
SB 184    INTERNET ACCESS TO LEG COMMITTEE MTGS                                                                                 
                                                                                                                                
          SB 184  was REPORTED out  of Committee with  a "do                                                                    
          pass" recommendation  and with  a new  zero fiscal                                                                    
          note by the Legislature.                                                                                              
                                                                                                                                
SB 220    ENERGY EFFICIENCY/ ALTERNATIVE ENERGY                                                                                 
                                                                                                                                
          CSSB 220 (FIN) was  REPORTED out of Committee with                                                                    
          a  "do pass"  recommendation  and with  zero FN  3                                                                    
          DEC, indeterminate FN 6 DHS,  two new fiscal notes                                                                    
          by  the  Department  of Commerce,  Community,  and                                                                    
          Economic  Development, two  new zero  fiscal notes                                                                    
          by the  Department of Revenue,  a new  zero fiscal                                                                    
          note by the Administration,  and a new fiscal note                                                                    
          by  the Department  of  Transportation and  Public                                                                    
          Facilities.                                                                                                           
                                                                                                                                
SB 230    BUDGET: CAPITAL, SUPP. & OTHER APPROPS                                                                                
                                                                                                                                
          SB  230  was  heard  and  HELD  in  Committee  for                                                                    
          further consideration.                                                                                                
                                                                                                                                
4:42:31 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 63                                                                                                            
                                                                                                                                
     "An Act relating to transfer restrictions on trust                                                                         
     interests."                                                                                                                
                                                                                                                                
Co-Chair Stedman noted that it was the second hearing on SB
63.                                                                                                                             
                                                                                                                                
ESTHER KIM, STAFF, SENATOR LESIL MCGUIRE, thanked the                                                                           
committee for hearing the bill.                                                                                                 
                                                                                                                                
Co-Chair Stedman said that there was one zero fiscal note                                                                       
from the Department of Law.                                                                                                     
                                                                                                                                
Co-Chair  Hoffman  MOVED to  REPORT  CSSB  63 (JUD)  out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal  note. There being NO  OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSSB  63 (JUD)  was REPORTED  out  of Committee  with a  "do                                                                    
pass" recommendation and with zero FN 1 LAW.                                                                                    
                                                                                                                                
4:44:35 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 172                                                                                                           
                                                                                                                                
     "An Act establishing the Alaska Health Care Commission                                                                     
     in the Department of Health and Social Services; and                                                                       
     providing for an effective date."                                                                                          
                                                                                                                                
Co-Chair  Stedman said  it  was the  second  hearing on  the                                                                    
bill.                                                                                                                           
                                                                                                                                
Senator  Olson,  sponsor,  commented  that Alaska  is  in  a                                                                    
serious  situation regarding  the health  care industry  and                                                                    
the AHC Commission is overdue.                                                                                                  
                                                                                                                                
4:45:25 PM                                                                                                                    
                                                                                                                                
Senator Huggins MOVED to ADOPT Amendment 1:                                                                                     
                                                                                                                                
     Page 3, line 6:                                                                                                            
     Delete "12"                                                                                                                
     Insert "13"                                                                                                                
                                                                                                                                
     Page 3, line 8:                                                                                                            
     Delete "nine"                                                                                                              
     Insert "10"                                                                                                                
                                                                                                                                
     Page 4, line 3:                                                                                                            
     Delete "and"                                                                                                               
                                                                                                                                
     Page 4, following line 3:                                                                                                  
     Insert a new subparagraph to read:                                                                                         
     "(J) one member who represents community health                                                                            
     centers in the state; and"                                                                                                 
                                                                                                                                
     Page 4, line 17:                                                                                                           
     Delete "AS 18.09.020(1)(B)-(I)"                                                                                            
     Insert "AS 18.09.020(1)(B)-(J)"                                                                                            
                                                                                                                                
Co-Chair Stedman OBJECTED for discussion purposes.                                                                              
                                                                                                                                
Senator  Huggins  explained  that  there  are  26  community                                                                    
health centers around the state.  He spoke in support of the                                                                    
idea that they be incorporated  into the AHC Commission. The                                                                    
governor's office does not support  the amendment. He stated                                                                    
that the intention of the  amendment is to add an additional                                                                    
member from the community health centers.                                                                                       
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
4:46:37 PM                                                                                                                    
                                                                                                                                
Senator   Olson  requested   that  his   staff  present   an                                                                    
explanation of the bill.                                                                                                        
                                                                                                                                
DENISE LICCIOLI, STAFF, SENATOR  DONNY OLSON, explained that                                                                    
the  bill  establishes  in statute  an  Alaska  health  care                                                                    
commission  that can  help  to plan  and  guide the  state's                                                                    
future health care policies.                                                                                                    
                                                                                                                                
Co-Chair Stedman noted  a new fiscal note  by the Department                                                                    
of Health and Social Services  reflecting the cost of hiring                                                                    
an  executive  director  and  an  administrative  assistant,                                                                    
funded  with  $335,000  in general  funds  and  $165,000  in                                                                    
federal receipts.                                                                                                               
                                                                                                                                
4:48:01 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman MOVED  to  REPORT CSSB  172  (FIN) out  of                                                                    
Committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSSB  172 (FIN)  was REPORTED  out of  Committee with  a "do                                                                    
pass"  recommendation and  with  a new  fiscal  note by  the                                                                    
Department of Health and Social Services.                                                                                       
                                                                                                                                
4:48:36 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 184                                                                                                           
                                                                                                                                
     "An Act relating to public access to legislative                                                                           
     committee meetings during regular legislative sessions                                                                     
     by Internet broadcast."                                                                                                    
                                                                                                                                
SENATOR HOLLIS  FRENCH, SPONSOR,  stated that  the intention                                                                    
of the  bill is to bring  Alaska to the capital  through web                                                                    
cams  in every  committee  room where  a  hearing is  taking                                                                    
place, so that throughout the  state, the proceedings can be                                                                    
watched.                                                                                                                        
                                                                                                                                
Co-Chair Hoffman  MOVED to  REPORT SB  184 out  of Committee                                                                    
with individual recommendations  and the accompanying fiscal                                                                    
notes. There being NO OBJECTION, it was so ordered.                                                                             
                                                                                                                                
SB  184 was  REPORTED  out  of Committee  with  a "do  pass"                                                                    
recommendation  and  with a  new  zero  fiscal note  by  the                                                                    
Legislature.                                                                                                                    
                                                                                                                                
4:50:03 PM                                                                                                                    
                                                                                                                                
SENATE BILL NO. 220                                                                                                           
                                                                                                                                
     "An Act declaring a state energy policy; relating to                                                                       
     energy efficiency and alternative energy; establishing                                                                     
     the energy efficiency grant fund, an emerging energy                                                                       
     technology fund, a renewable energy production tax                                                                         
     credit, and an energy use index; and relating to a                                                                         
     fuel purchasing cooperative, to energy codes and                                                                           
     efficiency standards, to energy conservation targets                                                                       
     in public buildings, to a state agency energy use                                                                          
     reduction plan, to the alternative energy revolving                                                                        
     loan fund, and to the renewable energy grant fund."                                                                        
                                                                                                                                
Co-Chair Stedman noted that this was the second hearing.                                                                        
                                                                                                                                
Co-Chair Hoffman  MOVED to ADOPT  the work draft to  SB 220,                                                                    
labeled  26-LS1197\B, Kane,  4/8/10,  as  the work  document                                                                    
before the committee.                                                                                                           
                                                                                                                                
Co-Chair Stedman OBJECTED.                                                                                                      
                                                                                                                                
4:50:47 PM                                                                                                                    
                                                                                                                                
DARWIN PETERSON, STAFF, CO-CHAIR  STEDMAN, spoke of multiple                                                                    
changes  in  the CS.  The  new  CS removes  the  legislative                                                                    
policy section that  was found in Section 2  of the previous                                                                    
version. He  referred to page  7 where previous  Sections 11                                                                    
and   12  were   removed.   These   sections  required   the                                                                    
administration to consider  using alternative energy systems                                                                    
in   the  construction   of  public   facilities  and   when                                                                    
purchasing equipment  that uses energy. These  sections were                                                                    
removed by  the request  of the administration  because this                                                                    
work is already being done.                                                                                                     
                                                                                                                                
Mr. Peterson addressed  Section 10 on page 9,  a new section                                                                    
which  refers  to  the contractual  agreements  between  the                                                                    
state and a lessee of state  land. If the lessee is a public                                                                    
utility engaged  in the production of  renewable energy, the                                                                    
state may  not negotiate  an increased  lease rate  based on                                                                    
percentage of gross revenue from  a renewable energy source.                                                                    
Section  11,  page  9,  creates  a  Southeast  Energy  Fund.                                                                    
Subsection 5  on lines 21 and  22 of page 9  is new language                                                                    
making the Department of Revenue  the fiduciary of the fund.                                                                    
Subsection   (c)   was   amended  to   specify   that   only                                                                    
municipalities,  joint  action   agencies,  or  member-owned                                                                    
electric cooperatives  are eligible  to receive  grants from                                                                    
this fund. Grants can only  be used to finance hydroelectric                                                                    
projects  or electric  transmission lines  and they  must be                                                                    
wholly owned by the grantee.                                                                                                    
                                                                                                                                
Mr. Peterson reported  that the last change  in this section                                                                    
is on page  10, line 1. The previous  version required grant                                                                    
money to  lapse back into the  fund if on-going work  to the                                                                    
project  had not  begun within  5 years.  This change  bumps                                                                    
that up to 7 years.                                                                                                             
                                                                                                                                
4:53:03 PM                                                                                                                    
                                                                                                                                
Mr. Peterson highlighted  the removal of Sections  15 and 16                                                                    
from the previous CS. These  sections reference the existing                                                                    
renewable energy fund  and cause concern that  it would have                                                                    
shifted the focus of the  program to projects in urban areas                                                                    
with better economies  of scale. Section 17  of the previous                                                                    
version  of the  bill  would  have added  a  new section  to                                                                    
AS.42.45  requiring the  Alaska  Energy  Authority (AEA)  to                                                                    
facilitate  the  organization   of  a  statewide  purchasing                                                                    
cooperative. That section has been  deleted in the new CS at                                                                    
the request of the administration  due to concerns about the                                                                    
state's   involvement   in   private   sector   competition.                                                                    
Furthermore, nothing in statute  prevents AEA from providing                                                                    
technical assistance if requested.                                                                                              
                                                                                                                                
Mr. Peterson  continued to detail  changes to the  CS. There                                                                    
are  changes in  Section 12,  page 10,  the Emerging  Energy                                                                    
Technology  Fund, beginning  with  the  first sentence.  The                                                                    
language  "in  order  to promote  the  expansion  of  energy                                                                    
sources available to Alaskans"  was added. The second change                                                                    
is  found  on lines  16-22  on  page  10. The  new  language                                                                    
narrows  the focus  of  what  the grants  can  be used  for.                                                                    
Grants  can only  be awarded  for demonstration  projects of                                                                    
technologies  that have  a reasonable  expectation of  being                                                                    
commercially viable within 5 years  and are designed to test                                                                    
emerging  technology  and   prove  existing  technology,  or                                                                    
deploy  existing technology  that  has  not been  previously                                                                    
demonstrated  in the  state. The  reason for  the change  is                                                                    
because  the purpose  of  the  fund is  to  test and  deploy                                                                    
equipment, not  to support  theoretical research  or studies                                                                    
that don't result in demonstration projects.                                                                                    
                                                                                                                                
Mr.  Peterson turned  to  the third  change  in Section  12,                                                                    
found  on page  11,  lines 1  and 2.  The  CS instructs  the                                                                    
university  to  provide  data acquisition  and  analysis  of                                                                    
projects  to the  advisory committee.  The fourth  change is                                                                    
the deletion  of subsection (f)  from the  previous version.                                                                    
That  section was  old language  taken from  the now-defunct                                                                    
Alaska   Science   and   Technology   Foundation.   It   was                                                                    
appropriate for  a grant that  funds basic research  that is                                                                    
high  risk  to investors.  Now  the  program excludes  these                                                                    
projects  and the  subsection no  longer applies.  The fifth                                                                    
change is  found on page  11 of Section 12,  subsection (i),                                                                    
lines 27  and 28. This  new language states that  members of                                                                    
the advisory  committee cannot award themselves  grants from                                                                    
the fund. The last change in  this section is an addition of                                                                    
a four-year sunset date on page 18, Section 25.                                                                                 
                                                                                                                                
4:56:11 PM                                                                                                                    
                                                                                                                                
Mr. Peterson pointed  out that Sections 20, 21,  and 51 have                                                                    
been deleted  from the  previous version  of the  bill. They                                                                    
would have  created the renewable  energy tax  credit, which                                                                    
requires  more  in-depth  analysis.   Section  23  has  been                                                                    
deleted. It  would have required  the state to  retro-fit at                                                                    
least 25  percent of all  public facilities by 2020.  At the                                                                    
request of  the administration,  it was removed  because the                                                                    
state  is currently  in the  process  of accomplishing  this                                                                    
goal.  Section  24 has  also  been  deleted. It  would  have                                                                    
required  AEA  to conduct  a  public  education campaign  on                                                                    
energy  efficiency. It  was removed  because AEA  is already                                                                    
planning on doing this type of outreach.                                                                                        
                                                                                                                                
Mr. Peterson  continued to explain that  Sections 26-33 have                                                                    
also  been deleted.  These sections  would have  amended the                                                                    
Alternative Energy  Revolving Loan Fund to  provide loans to                                                                    
owners  of   commercial  buildings  for   energy  efficiency                                                                    
improvements. The  administration suggested  this particular                                                                    
loan fund has  not been active since 1987  and would require                                                                    
a thorough review before implementing.                                                                                          
                                                                                                                                
Mr. Peterson  related that Sections 26-28,  beginning at the                                                                    
bottom of  page 18,  have been amended.  Now, the  Office of                                                                    
Management and Budget,  the Office of the  Governor, and the                                                                    
Department of  Transportation will  have sufficient  time to                                                                    
develop  their  required  reports.  The due  dates  for  the                                                                    
reports are  now January 31,  2011. Also in Section  27, the                                                                    
CS  instructs the  governor's energy  report  to include  an                                                                    
examination of the powers, duties,  and structure of AEA and                                                                    
the  Alaska  Industrial  Development  and  Export  Authority                                                                    
(AIDEA).  The  intent  is to  help  the  legislature  decide                                                                    
whether  or not  AEA and  AIDEA could  be more  effective if                                                                    
they had separate boards of directors.                                                                                          
                                                                                                                                
Mr.  Peterson reported  that the  CS has  a new  Section 30,                                                                    
found on  page 21, which  asks the Department of  Revenue to                                                                    
submit a report to the  legislature on January 31, 2011 with                                                                    
recommendations  regarding the  feasibility  of a  municipal                                                                    
energy improvements  financing program.  Sections 31  and 32                                                                    
are also  new sections. Section  31 gives the  Department of                                                                    
Health   and  Social   Services  the   authority  to   adopt                                                                    
transitional   regulations.   Section   32   instructs   the                                                                    
department to  replace the  name "Alaska  Heating Assistance                                                                    
Program" with  "Alaska Affordable Heating Program".  The new                                                                    
CS has an amended title to reflect the changes.                                                                                 
                                                                                                                                
4:59:31 PM                                                                                                                    
                                                                                                                                
Co-Chair Stedman WITHDREW his  OBJECTION to adopting Version                                                                    
B. There being NO further OBJECTION, it was so ordered.                                                                         
                                                                                                                                
Co-Chair  Stedman noted  nine fiscal  notes,  some of  which                                                                    
have to be amended or deleted.                                                                                                  
                                                                                                                                
SENATOR LESIL  MCGUIRE, SPONSOR,  thanked the  committee and                                                                    
their staff  for their work. She  termed the bill a  work in                                                                    
progress and called it a good  start. It is the first energy                                                                    
policy  put  forth  in  the   state  of  Alaska.  There  are                                                                    
provisions  in   the  bill  representing   suggestions  from                                                                    
Alaskans  statewide. She  commended the  Senate and  the bi-                                                                    
partisan working group for addressing the issue.                                                                                
                                                                                                                                
SENATOR BILL WIELECHOWSKI, SPONSOR,  noted that the bill had                                                                    
been pared  back quite a  bit. He  said that he  was looking                                                                    
forward to passage of the bill in the Senate.                                                                                   
                                                                                                                                
5:02:25 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman recalled  the  history of  working on  the                                                                    
state energy policy. Quite a  few Senators have participated                                                                    
in this  legislation and have  traveled to various  areas of                                                                    
the state.  It is one  of several pieces of  legislation. He                                                                    
spoke of  the next step  to achieve the outcome.  He thanked                                                                    
the sponsors.                                                                                                                   
                                                                                                                                
Senator McGuire thanked  her staff and others  who worked on                                                                    
the  bill.  Senator Wielechowski  added  his  thanks to  the                                                                    
administration.                                                                                                                 
                                                                                                                                
5:04:18 PM                                                                                                                    
                                                                                                                                
Co-Chair  Hoffman  MOVED  to  REPORT  CSSB  220  (FIN)  from                                                                    
Committee with  individual recommendations and  the attached                                                                    
fiscal notes. There being NO OBJECTION, it was so ordered.                                                                      
                                                                                                                                
CSSB  220 (FIN)  was REPORTED  out of  Committee with  a "do                                                                    
pass" recommendation  and with zero FN  3 DEC, indeterminate                                                                    
FN  6  DHS,  two  new  fiscal notes  by  the  Department  of                                                                    
Commerce, Community, and Economic  Development, two new zero                                                                    
fiscal  notes  by the  Department  of  Revenue, a  new  zero                                                                    
fiscal note by the Administration,  and a new fiscal note by                                                                    
the Department of Transportation and Public Facilities.                                                                         
                                                                                                                                
AT-EASE        5:04:52 PM                                                                                                     
RECONVENED     5:17:01 PM                                                                                                     
                                                                                                                                
SENATE BILL NO. 230                                                                                                           
                                                                                                                                
     "An Act making and amending appropriations, including                                                                      
     capital appropriations, supplemental appropriations,                                                                       
     and other appropriations; making appropriations to                                                                         
     capitalize funds; and providing for an effective                                                                           
     date."                                                                                                                     
                                                                                                                                
Co-Chair  Stedman said  it  was the  second  hearing on  the                                                                    
bill.                                                                                                                           
                                                                                                                                
Co-Chair Hoffman  MOVED to ADOPT  the CS to SB  230, labeled                                                                    
26-GS2824\S,  Kane, 4/9/10,  as  the work  draft before  the                                                                    
Committee.                                                                                                                      
                                                                                                                                
5:18:02 PM                                                                                                                    
                                                                                                                                
MILES  BAKER,  STAFF,  CO-CHAIR  STEDMAN,  pointed  out  two                                                                    
reports  that   accompany  the  bill  (copy   on  file).  He                                                                    
explained  that  the  new  CS  has a  net  addition  of  $76                                                                    
million;  $68 million  is general  funds. The  second report                                                                    
shows  funding by  House District.  Section 1  is the  FY 10                                                                    
Supplemental. Section 2 is  the Deferred Maintenance section                                                                    
- primarily  the governor's  deferred maintenance  bill with                                                                    
an additional  $24 million. Section  3 is the FY  11 Capital                                                                    
Budget. Section  4 consists of  grants to  named recipients,                                                                    
to unincorporated  entities, and to  municipalities. Section                                                                    
5 is  the Cruise Ship  Head Tax spending, which  contains no                                                                    
new changes. Column 6 is the total.                                                                                             
                                                                                                                                
Mr.  Baker referred  to  page  4 of  packet  1, which  shows                                                                    
funding  changes  for   specific  projects.  He  highlighted                                                                    
several  changes.  The Blood  Bank  of  Alaska received  $13                                                                    
million for a new building  in Anchorage, an amount that was                                                                    
omitted in  the last CS.  There is an additional  $5 million                                                                    
for  the  University  of  Alaska  engineering  facility  and                                                                    
design  in  Anchorage.  There is  $2  million  for  Pipeline                                                                    
Training Center in Fairbanks, in  addition to the $2 million                                                                    
in the previous  CS. There is an additional  $10 million for                                                                    
the  Port of  Anchorage,  which brings  their  total to  $20                                                                    
million.  There is  $9 million  for long-term  care facility                                                                    
planning for the Alaska Native  Tribal Health Consortium. He                                                                    
stated that those were the large additions to the new CS.                                                                       
                                                                                                                                
5:21:22 PM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
SB  230  was  heard  and   HELD  in  Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 5:22 PM.                                                                                           
                                                                                                                                

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