Legislature(2011 - 2012)SENATE FINANCE 532

04/14/2011 09:00 AM FINANCE


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+= HB 105 SOUTHEAST STATE FOREST TELECONFERENCED
Moved HB 105 Out of Committee
+ HB 24 EXTEND REGULATORY COMM. OF ALASKA SUNSET TELECONFERENCED
Heard & Held
+ HB 126 BOARD EXTENSIONS: NURSE/DENTIST/BARBERS TELECONFERENCED
Heard & Held
+ HB 119 AIDEA: PROCUREMENT; PROJECTS TELECONFERENCED
Heard & Held
+ Bills Previously Heard/Scheduled TELECONFERENCED
                 SENATE FINANCE COMMITTEE                                                                                       
                      April 14, 2011                                                                                            
                         9:14 a.m.                                                                                              
                                                                                                                                
                                                                                                                                
9:14:30 AM                                                                                                                    
                                                                                                                                
CALL TO ORDER                                                                                                                 
                                                                                                                                
Co-Chair  Stedman   called  the  Senate   Finance  Committee                                                                    
meeting to order at 9:14 a.m.                                                                                                   
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Lyman Hoffman, Co-Chair                                                                                                 
Senator Bert Stedman, Co-Chair                                                                                                  
Senator Lesil McGuire, Vice-Chair                                                                                               
Senator Johnny Ellis                                                                                                            
Senator Dennis Egan                                                                                                             
Senator Donny Olson                                                                                                             
Senator Joe Thomas                                                                                                              
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
None                                                                                                                            
                                                                                                                                
ALSO PRESENT                                                                                                                  
                                                                                                                                
Representative  Olson;  Conrad   Jackson,  Chief  of  Staff,                                                                    
Representative  Olson; Bob  Pickett, Regulatory  Commission,                                                                    
Alaska  Chairman;  Pat  Davidson,  Division  of  Legislative                                                                    
Audit; Representative  Mike Hawker; Darwin  Peterson, Senate                                                                    
Finance Committee;  Ted Leonard,  AIDEA; Mark  Davis, AIDEA;                                                                    
General Tom Katkus, Commissioner  Department of Military and                                                                    
Veterans Affairs.                                                                                                               
                                                                                                                                
PRESENT VIA TELECONFERENCE                                                                                                    
                                                                                                                                
Kristin Winters, Golden Heart  Utilities; Tim Smith, Skagway                                                                    
Borough Manager; Tom Cochran, Mayor of Skagway.                                                                                 
                                                                                                                                
SUMMARY                                                                                                                       
                                                                                                                                
HB 105    SOUTHEAST STATE FOREST                                                                                                
                                                                                                                                
          HB 105 was REPORTED out of Committee with a "do                                                                       
          pass" recommendation and with one previously                                                                          
          published zero fiscal note.                                                                                           
                                                                                                                                
HB 24     EXTEND REGULATORY COMM. OF ALASKA SUNSET                                                                              
                                                                                                                                
          HB 24 was HEARD and HELD in Committee for further                                                                     
          consideration.                                                                                                        
                                                                                                                                
HB 126    BOARD EXTENSIONS: NURSE/DENTIST/BARBERS                                                                               
                                                                                                                                
          SCSCSHB 126 was HEARD and HELD in Committee for                                                                       
          further consideration.                                                                                                
                                                                                                                                
HB 119    AIDEA: PROCUREMENT; PROJECTS                                                                                          
                                                                                                                                
          SCSCSHB 119 was HEARD and HELD in Committee for                                                                       
          further consideration.                                                                                                
                                                                                                                                
HOUSE BILL NO. 105                                                                                                            
                                                                                                                                
     "An Act relating to the Southeast State Forest; and                                                                        
     providing for an effective date."                                                                                          
                                                                                                                                
9:15:03 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman introduced the second hearing on HB 105.                                                                       
                                                                                                                                
Co-Chair Hoffman MOVED to report HB 105 out of committee                                                                        
with individual recommendations and the accompanying fiscal                                                                     
note(s).                                                                                                                        
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
HB 105 was REPORTED out of Committee with a "do pass"                                                                           
recommendation and with one previously published zero                                                                           
fiscal note.                                                                                                                    
                                                                                                                                
CS FOR HOUSE BILL NO. 24(FIN)                                                                                                 
                                                                                                                                
     "An Act extending the termination date of the                                                                              
     Regulatory Commission of Alaska; and providing for an                                                                      
     effective date."                                                                                                           
                                                                                                                                
9:16:16 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  proposed committee substitute,  work draft                                                                    
#27-LS0173/D,   Kirsch/Kane,   4/13/11.   Co-Chair   Stedman                                                                    
OBJECTED for purpose of discussion.                                                                                             
                                                                                                                                
Co-Chair Stedman  explained that  the CS amended  the sunset                                                                    
date  to June  30, 2012  and inserted  intent language.  The                                                                    
Regulatory   Commission  of   Alaska   (RCA)  provided   the                                                                    
legislature  with   a  proposal  to  reduce   the  statutory                                                                    
timeline for tariff  filings. He stated that  he was working                                                                    
with Senator  Thomas to correct  the problem  of excessively                                                                    
long   timelines  and   resolve  late   case  filings.   The                                                                    
compromise  was devised  to provide  RCA  an opportunity  to                                                                    
address the  problem internally and report  to the committee                                                                    
in January 2012. If the  committee remained unsatisfied with                                                                    
the proposal, the issue would be addressed in 2012.                                                                             
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered. Version D was adopted.                                                                            
                                                                                                                                
9:17:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE KURT OLSON introduced himself and his staff.                                                                     
                                                                                                                                
CONRAD  JACKSON,  CHIEF   OF  STAFF,  REPRESENTATIVE  OLSON,                                                                    
explained   the  CS.   The  bill   extends  the   Regulatory                                                                    
Commission  of Alaska  sunset. The  CS provided  a one  year                                                                    
extension. He felt that the  Regulatory Commission of Alaska                                                                    
continued  to  serve  the public  interest.  The  Regulatory                                                                    
Commission  of  Alaska   provided  continuity  of  utilities                                                                    
balanced  with the  consumer's ability  to pay  a reasonable                                                                    
price. He stated that the  Regulatory Commission of Alaska's                                                                    
job was to protect the public.                                                                                                  
                                                                                                                                
9:19:58 AM                                                                                                                    
                                                                                                                                
Co-Chair  Stedman  mentioned  one Senate  Finance  Committee                                                                    
fiscal  note reflecting  the cost  of $8,932,100  in program                                                                    
receipts  for  a  one  year   extension  of  the  Regulatory                                                                    
Commission of Alaska.  The funding also existed  in the FY12                                                                    
operating budget.                                                                                                               
                                                                                                                                
Senator  Thomas  understood  the  problem  that  had  arisen                                                                    
including the  opening of  documents without  addressing the                                                                    
issue. He wished  to address the issue with a  plan from the                                                                    
Regulatory Commission  of Alaska. He acknowledged  that much                                                                    
of  the  issue  involved   consumer  protection.  He  looked                                                                    
forward  to  better  understanding  and  resolution  of  the                                                                    
problem.                                                                                                                        
                                                                                                                                
9:21:05 AM                                                                                                                    
                                                                                                                                
Senator Ellis expressed confidence  in the current chair Mr.                                                                    
Bob Pickett.  He noted large  improvement over  the previous                                                                    
leadership.                                                                                                                     
                                                                                                                                
Representative Olson expressed  concerns about promises made                                                                    
three and four years ago.  He wished to correct the problems                                                                    
without eradicating the Regulatory  Commission of Alaska. He                                                                    
expressed confidence  in Chair Pickett. He  hoped to balance                                                                    
past  problems  with  the future  Regulatory  Commission  of                                                                    
Alaska.                                                                                                                         
                                                                                                                                
9:22:41 AM                                                                                                                    
                                                                                                                                
Senator McGuire appreciated the clean sunset bill.                                                                              
                                                                                                                                
9:23:15 AM                                                                                                                    
                                                                                                                                
KRISTIN    WINTERS,    GOLDEN     HEART    UTILITIES    (via                                                                    
teleconference),  testified in  support of  the legislation.                                                                    
She supported  the reduction of  the statutory  timeline for                                                                    
rate  filings. She  informed that  she was  the director  of                                                                    
regulatory   affairs  for   Golden   Heart  Utilities.   She                                                                    
explained  that  Golden  Heart Utilities  filed  rate  cases                                                                    
annually  beginning  in  1999.  She  pointed  out  that  she                                                                    
continued to  have increased operating,  infrastructure, and                                                                    
investment costs without a growing  customer base. She noted                                                                    
the need  to file rate  cases annually. The  consequences of                                                                    
regulatory  lag  resulted  from excessively  long  statutory                                                                    
periods to resolve rate case  filings. She believed that the                                                                    
reasonable time for  the filing of a rate case  was 9 months                                                                    
and the process in use  expanded to fill the available time.                                                                    
The rate setting  process in Alaska was  outdated and failed                                                                    
to reflect  the changing nature  of the utility  industry or                                                                    
the  rapidly  changing  economy.  She pointed  out  that  27                                                                    
states were required  to conclude rate cases in  9 months or                                                                    
less.  The  lag  means  that the  Regulatory  Commission  of                                                                    
Alaska  had  not  decided  disputed   issues  prior  to  the                                                                    
utilities  filing their  next  rate  case. Thus,  subsequent                                                                    
rate filings include the disputed  issues, which led to more                                                                    
disputed issues,  inefficiencies, and increased cost  as the                                                                    
parties  continued  to  debate  the  undecided  issues.  The                                                                    
result was  high rate case  costs. She urged support  of the                                                                    
reduction in  the statutory timeline. She  advocated for the                                                                    
commission to issue  a final order for a  tariff filing that                                                                    
changed  the utilities  revenue requirement  or rate  design                                                                    
from 450 days to 270 days.                                                                                                      
                                                                                                                                
9:29:09 AM                                                                                                                    
                                                                                                                                
BOB PICKETT,  REGULATORY COMMISSION, ALASKA  CHAIRMAN, spoke                                                                    
about   the  Regulatory   Commission   of  Alaska's   recent                                                                    
legislative audit. He stated  that the Regulatory Commission                                                                    
of  Alaska  was at  a  critical  point  in its  history  and                                                                    
confronted with  large issues.  He explained  his work  on a                                                                    
procedural  schedule  offering   Alaskan's  the  ability  to                                                                    
participate   in  solving   the  Regulatory   Commission  of                                                                    
Alaska's  issues.   Part  of   the  responsibility   of  the                                                                    
Regulatory Commission of Alaska was  to work with the Alaska                                                                    
Energy Authority  (AEA) on the  administration of  the Power                                                                    
Cost  Equalization program  (PCE). The  PCE was  critical to                                                                    
the  health of  the  rural communities.  Some  of the  rural                                                                    
utilities   were   struggling.   Capable,   confident,   and                                                                    
committed  staff was  necessary  to ease  the struggles.  He                                                                    
expressed  concern with  the one  year  extension given  the                                                                    
fact   that   the   Department   of   Administration   (DOA)                                                                    
classification study  from last August resulted  in the loss                                                                    
of 100 percent of the  tariff staff. Commissioners and staff                                                                    
would interpret a  one year extension as a wind  down of the                                                                    
commission and would make personal decisions accordingly.                                                                       
                                                                                                                                
9:34:52 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  stated that he  had no intent to  move the                                                                    
bill from the committee. He  wished to provide adequate time                                                                    
for   Mr.  Pickett   to  review   the  CS   and  allow   for                                                                    
communication.                                                                                                                  
                                                                                                                                
Co-Chair Hoffman requested further  dialog with the chairman                                                                    
regarding water and sewer rates  in rural Alaska. He did not                                                                    
view  the one  year extension  as  intent to  wind down  and                                                                    
terminate the commission.                                                                                                       
                                                                                                                                
9:36:34 AM                                                                                                                    
                                                                                                                                
Co-Chair Stedman  concurred that  there was no  intention of                                                                    
winding down the Regulatory Commission of Alaska.                                                                               
                                                                                                                                
Senator  McGuire echoed  the comments  of the  chairman. She                                                                    
commented  on  the  viability of  Regulatory  Commission  of                                                                    
Alaska  as discussed  in years  past.  She complimented  Mr.                                                                    
Pickett on  his leadership  since 2008. She  appreciated his                                                                    
communication with the lawmakers.                                                                                               
                                                                                                                                
Senator  McGuire  asked  about South-central  Alaska,  where                                                                    
many  gas  contracts were  not  approved  by the  Regulatory                                                                    
Commission of  Alaska. She stated  that the  contracts would                                                                    
have provided  a healthy supply  of natural gas to  the Cook                                                                    
Inlet. The  failure to approve the  contracts contributed to                                                                    
the  situation of  "rolling blackouts."  She wondered  about                                                                    
action taken  by Regulatory Commission of  Alaska to improve                                                                    
the situation.                                                                                                                  
                                                                                                                                
9:38:57 AM                                                                                                                    
                                                                                                                                
Mr. Pickett  answered that five  gas supply  agreements were                                                                    
approved in  the last 26  months. The situation  was tenuous                                                                    
and  deteriorating during  the  last 10  years. He  admitted                                                                    
difficulty  approving  capital  expenditures  and  including                                                                    
them  into the  rate  base.  He intended  to  hold a  public                                                                    
meeting with the utilities regarding  the import of gas into                                                                    
Cook Inlet.  The area  required a source  of natural  gas to                                                                    
fuel the gas  generation equipment. He stated  that he could                                                                    
not speak to the dynamics  of past gas supply agreements. He                                                                    
noted that the role of  the attorney general and interveners                                                                    
must  be  thought of  in  terms  of system  reliability.  He                                                                    
stated that the Regulatory  Commission of Alaska was charged                                                                    
to ensure just  and reasonable rates for  rate payers, along                                                                    
with reliable utility service.                                                                                                  
                                                                                                                                
9:40:40 AM                                                                                                                    
                                                                                                                                
Senator  McGuire asked  if the  statute must  be changed  to                                                                    
reflect the necessary balance.                                                                                                  
                                                                                                                                
Mr. Pickett responded  that changes in the  statutes lead to                                                                    
conflicts.  He  opined  that addressing  the  extension  and                                                                    
policy issues separately was a  sound method of tackling the                                                                    
problem.                                                                                                                        
                                                                                                                                
Senator McGuire  asked about the issue  of renewable energy.                                                                    
She stated  the strong approach for  adding renewable energy                                                                    
as a  portion of the  portfolio of available  energy supply.                                                                    
She  explained  that  the  intention  was  not  to  supplant                                                                    
hydrocarbons,    but    to    provide   an    option.    The                                                                    
"incentivization"   produced  results.   She  credited   Mr.                                                                    
Pickett with excellent communication.                                                                                           
                                                                                                                                
9:43:19 AM                                                                                                                    
                                                                                                                                
Mr. Pickett stated that the role  of the board was to review                                                                    
the  power  sale  agreement between  the  independent  power                                                                    
producer and  the regulated utility.  He mentioned  that the                                                                    
legislature  created  an  exemption  for  Fire  Island  from                                                                    
certification  requirements. He  noted that  a power  supply                                                                    
agreement for Fire Island would be reviewed.                                                                                    
                                                                                                                                
Senator   McGuire  asked   about   a  conversation   between                                                                    
Commissioner Guierd and Armstrong Oil and Gas.                                                                                  
                                                                                                                                
Mr.  Pickett  explained  that  he   was  not  privy  to  the                                                                    
conversation.   He   noted   the   great   impact   of   the                                                                    
conversation.   He  admitted   to   reading   part  of   the                                                                    
conversation transcript.                                                                                                        
                                                                                                                                
Senator  McGuire requested  a  question  and answer  process                                                                    
with  Commissioner Guiard  regarding  the conversation.  She                                                                    
opined  that  the  conversation   provided  a  deterrent  to                                                                    
development in  the state. She requested  a written response                                                                    
regarding the commissioner's response.                                                                                          
                                                                                                                                
Mr.  Pickett  agreed. He  informed  the  committee that  the                                                                    
commissioners on the panel worked  diligently to achieve the                                                                    
operating  authority approved  and he  reported that  gas is                                                                    
flowing through the pipeline.                                                                                                   
                                                                                                                                
9:47:00 AM                                                                                                                    
                                                                                                                                
PAT DAVIDSON, DIVISION OF  LEGISLATIVE AUDIT, explained that                                                                    
the  evaluation  of  the  Regulatory  Commission  of  Alaska                                                                    
identified no  new recommendations. The  division encouraged                                                                    
the  Regulatory   Commission  of  Alaska  to   continue  its                                                                    
implementation of the prior  audit recommendation, which was                                                                    
to develop regulations that  would enhance the transparency,                                                                    
accountability,  and  efficiency   of  the  decision  making                                                                    
process.  She  stated  that  the  Regulatory  Commission  of                                                                    
Alaska   partially  implemented   the  recommendation.   The                                                                    
portion that  remained outstanding, was the  work related to                                                                    
developing  regulations to  establish standards  for certain                                                                    
aspects  of discovery.  The audit  made a  recommendation to                                                                    
extend the Regulatory Commission  of Alaska for eight years.                                                                    
A  new  audit  requirement   states  that  the  division  of                                                                    
legislative audit must review  the accuracy and completeness                                                                    
of  Regulatory Commission  of Alaska's  annual report  every                                                                    
two  years.  The  annual  report  required  compliance  with                                                                    
statutory timelines. The  audit requirement supplemented the                                                                    
sunset review leading to the eight year recommendation.                                                                         
                                                                                                                                
Co-Chair  Hoffman  asked if  the  one  year extension  would                                                                    
require an audit review.                                                                                                        
                                                                                                                                
Ms. Davidson  responded that when  a board or  commission is                                                                    
extended for  one year, she  consulted with the  chairman of                                                                    
the  budget and  audit committee  to determine  the type  of                                                                    
audit needed.                                                                                                                   
                                                                                                                                
Co-Chair  Hoffman  asked  about  possible  language  in  the                                                                    
extension that deletes the requirement for an audit.                                                                            
                                                                                                                                
Ms. Davidson responded yes.                                                                                                     
                                                                                                                                
9:49:46 AM                                                                                                                    
                                                                                                                                
HB  24  was   HEARD  and  HELD  in   Committee  for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 126(FIN)                                                                                                
                                                                                                                                
     "An Act  extending the termination  dates of  the Board                                                                    
     of  Nursing, the  Board of  Dental  Examiners, and  the                                                                    
     Board of  Barbers and  Hairdressers; and  providing for                                                                    
     an effective date."                                                                                                        
                                                                                                                                
9:50:24 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  proposed committee substitute,  work draft                                                                    
#27-LS0321/E,  Kirsch,  4/12/11. Co-Chair  Stedman  OBJECTED                                                                    
for purpose of discussion.                                                                                                      
                                                                                                                                
Co-Chair Stedman  explained that  since the bill  was termed                                                                    
the  omnibus extension  bill, the  committee added  a sunset                                                                    
extension for the alcohol beverage  control board in Section                                                                    
5. He pointed out that  a new Section 4 prohibited convicted                                                                    
felons from serving on state boards or commissions.                                                                             
                                                                                                                                
Co-Chair  Stedman WITHDREW  his  OBJECTION.  There being  NO                                                                    
OBJECTION, it was so ordered.                                                                                                   
                                                                                                                                
9:51:29 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE MIKE HAWKER stated  that SCSCSHB 126 provided                                                                    
an  effort  at  creating   an  omnibus  bill  combining  the                                                                    
reauthorization of various boards  and commissions. The bill                                                                    
was originally introduced with  the Regulatory Commission of                                                                    
Alaska, which is  now considered in a  separate vehicle. The                                                                    
omnibus  bill  reauthorizes  the board  of  nursing,  dental                                                                    
examiners,  barbers   and  hairdressers,  and   the  alcohol                                                                    
beverage  control board.  The legislative  budget and  audit                                                                    
division   completed  examinations   of   each  board.   The                                                                    
extensions  included are  for nurses,  dentists and  barbers                                                                    
and  the alcohol  beverage control  boards.  He pointed  out                                                                    
that  the   bill's  purpose  was  to   create  economies  of                                                                    
efficiencies of operations with an omnibus bill.                                                                                
                                                                                                                                
Co-Chair  Stedman   mentioned  one  fiscal  note   from  the                                                                    
Department of  Commerce, Community and  Economic Development                                                                    
showing the cost of extending  the board of barbers, nurses,                                                                    
and  dental examiners  at  $1,431,900  in receipt  supported                                                                    
services. Funding was in the FY12 operating budget.                                                                             
                                                                                                                                
Co-Chair Stedman  pointed out  one Senate  Finance Committee                                                                    
fiscal  note  for  the  Department   of  Public  Safety  for                                                                    
$1,505,700 in  program receipts and  mental health  funds to                                                                    
extend the alcohol beverage control  board for one year. The                                                                    
funding was in the FY12 operating budget.                                                                                       
                                                                                                                                
SCSCSHB  126 was  HEARD and  HELD in  Committee for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
CS FOR HOUSE BILL NO. 119(EDT)                                                                                                
                                                                                                                                
     "An  Act  relating  to  the  procurement  of  supplies,                                                                    
     services, professional  services, and  construction for                                                                    
     the   Alaska   Industrial    Development   and   Export                                                                    
     Authority; relating to the definition  of 'own' for the                                                                    
     economic   development   account;   relating   to   the                                                                    
     definitions   of    'development   project',   'plant',                                                                    
     'facility',  and 'project'  for  the Alaska  Industrial                                                                    
     Development  and  Export  Authority;  relating  to  the                                                                    
     Alaska  Industrial  Development  and  Export  Authority                                                                    
     creating   subsidiaries  regarding   projects  financed                                                                    
     under  AS 44.88.172;  and  providing  for an  effective                                                                    
     date."                                                                                                                     
                                                                                                                                
9:54:12 AM                                                                                                                    
                                                                                                                                
Co-Chair Hoffman  proposed committee substitute,  work draft                                                                    
#27-GH1745/E, Kirsch, 4/12/11.                                                                                                  
                                                                                                                                
Co-Chair Stedman OBJECTED for purpose of discussion.                                                                            
                                                                                                                                
DARWIN PETERSON, SENATE FINANCE  COMMITTEE, detailed the CS.                                                                    
He noted  changes in Section  6 and  7, which were  added to                                                                    
allow a  regional housing  authority eligibility  for grants                                                                    
under  the municipal  harbor grant  program. He  stated that                                                                    
while most harbors  are owned by municipalities,  it was not                                                                    
the   case  in   Chenega  and   Tatitlek  where   the  state                                                                    
transferred ownership  of the local harbors  to the regional                                                                    
housing authorities.   The housing authorities  were used as                                                                    
a  political  subdivision   because  neither  community  was                                                                    
incorporated. The  communities were thus ineligible  for the                                                                    
harbor matching grant program without the statutory change.                                                                     
                                                                                                                                
Mr.  Peterson mentioned  new language  on Page  4, Lines  17                                                                    
through 20, which  allowed the community to  use cruise ship                                                                    
head  tax money  and  harbor transfer  payments as  matching                                                                    
funds  for the  municipal  harbor grant  program. Section  8                                                                    
added  a definition  for the  regional housing  authority in                                                                    
Alaska  Statutes   2960,  which  is  the   municipal  harbor                                                                    
matching  grants  program.  The  next change  was  found  in                                                                    
Section 10, where "Alaska  Industrial Development and Export                                                                    
Authority  (AIDEA)"  was  removed  from  the  definition  of                                                                    
agency, to  exempt it from  the state procurement  code. The                                                                    
conforming   amendment  was   brought  to   the  committee's                                                                    
attention  by  legislative  legal  services.  The  amendment                                                                    
conforms with Section 9 of the  bill which adds AIDEA to the                                                                    
list  of   state  entities  allowed   to  adopt   their  own                                                                    
procurement  code.  Without  the  amendment,  the  authority                                                                    
could  have been  subject to  their procurement  regulations                                                                    
and the state procurement code.                                                                                                 
                                                                                                                                
Mr.  Peterson highlighted  changes  in Section  16, Page  9,                                                                    
where AIDEA  was given legislative  approval to bond  for up                                                                    
to $65 million for improvement  and expansion at the Skagway                                                                    
Ore   Terminal.  The   expansion  was   necessary  to   meet                                                                    
environmental   standards   and  prepare   for   substantial                                                                    
increases in the use of the  terminal by new Yukon mines. He                                                                    
noted that Section 17 makes  the addition of harbor transfer                                                                    
payments  as  eligible  matching  funds  for  the  municipal                                                                    
harbor grant program retroactive to January 1, 1993.                                                                            
                                                                                                                                
Co-Chair Stedman WITHDREW his OBJECTION.                                                                                        
                                                                                                                                
There being NO OBJECTION, it was so ordered.                                                                                    
                                                                                                                                
9:58:48 AM                                                                                                                    
                                                                                                                                
TED   LEONARD,  EXECUTIVE   DIRECTOR,   AIDEA  thanked   the                                                                    
committee for the opportunity to testify.                                                                                       
                                                                                                                                
MARK DAVIS,  AIDEA, stated  that the  bill allowed  AIDEA to                                                                    
advance economic development across  a broad spectrum of the                                                                    
economy.  He  pointed  out the  proposed  amendment  to  the                                                                    
Alaska Procurement Code, which  would allow AIDEA to develop                                                                    
regulations  for   state  procurement.  The   Department  of                                                                    
Transportation   and   Public    Facilities   (DOT/PF)   and                                                                    
Department   of  Administration   (DOA)  supported   AIDEA's                                                                    
ability to  issue regulations  in a  method similar  to that                                                                    
used by the Alaska Housing Finance Corporation (AHFC).                                                                          
                                                                                                                                
Mr.  Davis spoke  to  the  change allowing  AIDEA  to own  a                                                                    
percentage  or  all  of  a  development  project  through  a                                                                    
Limited Liability Corporation  (LLC) or corporation. Another                                                                    
change allowed  AIDEA to create a  subsidiary corporation by                                                                    
the board  which could  issue bonds  or undertake  debt. The                                                                    
funds would  be used  to create projects  to be  sold later.                                                                    
The  AIDEA  board  expressed   interested  in  creating  the                                                                    
divestiture to  bring assets back  into the  private sector.                                                                    
The  bill  also  expanded  the  definition  of  "development                                                                    
project."   Since   1993,   the  Alaska   economy   expanded                                                                    
dramatically  and the  new definition  would allow  AIDEA to                                                                    
invest in communications and work  on community projects and                                                                    
federal facilities.  The bill would  allow AIDEA to  work on                                                                    
prototype or new technology.                                                                                                    
                                                                                                                                
10:03:51 AM                                                                                                                   
                                                                                                                                
TOM  SMITH, SKAGWAY  BOROUGH  MANAGER (via  teleconference),                                                                    
testified in  favor of the  legislation. He stated  that the                                                                    
borough strongly  supported the bonding authority  for AIDEA                                                                    
to proceed  with improvements at  the Skagway  ore facility.                                                                    
He  claimed that  the funding  would  increase capacity  and                                                                    
improve environmental standards.                                                                                                
                                                                                                                                
10:05:46 AM                                                                                                                   
                                                                                                                                
TOM COCHRAN,  MAYOR OF SKAGWAY (via  teleconference), echoed                                                                    
the  testimony of  Tim  Smith. He  stated  that the  bonding                                                                    
package  for  the  ore terminal  would  provide  substantial                                                                    
economic development.                                                                                                           
                                                                                                                                
10:06:27 AM                                                                                                                   
                                                                                                                                
GENERAL TOM KATKUS, COMMISSIONER  DEPARTMENT OF MILITARY AND                                                                    
VETERANS AFFAIRS,  testified in support of  the legislation.                                                                    
He mentioned the  portion of the bill  allowing the military                                                                    
to  have  options  regarding   development  of  projects  or                                                                    
facilities. He  pointed out  that the  military construction                                                                    
process  was  long  and tenuous.  The  legislation  provides                                                                    
another  option to  support the  military  by financing  and                                                                    
developing lease agreements with  the National Guard and the                                                                    
Coast Guard for the development of facilities.                                                                                  
                                                                                                                                
10:08:12 AM                                                                                                                   
                                                                                                                                
Co-Chair Stedman  mentioned two zero fiscal  notes, one from                                                                    
Department  of   Revenue  the   other  from   Department  of                                                                    
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
Mr.  Leonard  added  that   the  legislation  provide  AIDEA                                                                    
flexibility  and tools  to encourage  greater investment  in                                                                    
Alaska's economy and resource development.                                                                                      
                                                                                                                                
Co-Chair Hoffman asked about the new board.                                                                                     
                                                                                                                                
Mr.  Leonard responded  that the  new board  provided better                                                                    
perspective  from   the  private  sector  and   allowed  for                                                                    
improved analysis of projects.                                                                                                  
                                                                                                                                
10:09:29 AM                                                                                                                   
                                                                                                                                
SCSCSHB  119 was  HEARD and  HELD in  Committee for  further                                                                    
consideration.                                                                                                                  
                                                                                                                                
10:09:53 AM                                                                                                                   
                                                                                                                                
RECESSED                                                                                                                        
                                                                                                                                
ADJOURNMENT                                                                                                                   
                                                                                                                                
The meeting was adjourned at 5:18 PM.                                                                                           
                                                                                                                                

Document Name Date/Time Subjects
CSHB 126(FIN) Sponsor Statement.pdf SFIN 4/14/2011 9:00:00 AM
HB 126
HB 105 Transmittal.pdf HFIN 3/22/2011 1:30:00 PM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 AFA Letter of Support 1.12.2011.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 BOF Support Letter 4-1-11.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 Coffman Cove Letter of Support.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 JCB Letter of Support.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 Land Ownership and Mill Status.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 Parcel Maps 12.20.2010.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 RDC Letter of Support.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 SAF Letter of Support.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 Value Added 3.30.2011.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 Vicinity Map.pdf SFIN 4/13/2011 9:00:00 AM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB126 HFIN CS Changes.pdf SFIN 4/14/2011 9:00:00 AM
HB 126
HB24 Sponsor Statement ver B.pdf SFIN 4/14/2011 9:00:00 AM
HB 24
HB24 Supporting Documents - Leg Audit #08-20067-11 Summary.pdf SFIN 4/14/2011 9:00:00 AM
HB 24
HB24 Supporting Documents - Email Mike O'Meara 3-15-2011.pdf SFIN 4/14/2011 9:00:00 AM
SFIN 4/16/2011 10:00:00 AM
HB 24
HB24 Supporting Documents - Leg Audit #08-20067-11.pdf SFIN 4/14/2011 9:00:00 AM
HB 24
HB24 Supporting Documents - Fax AARP 3-14-2011.pdf SFIN 4/14/2011 9:00:00 AM
HB 24
HB24 Supporting Documents - Letter GCI 3-15-2011.pdf SFIN 4/14/2011 9:00:00 AM
HB 24
HB126 BBH Auditor Cover Ltr.pdf SFIN 4/14/2011 9:00:00 AM
HB 126
HB126 BDE Auditor Cover Ltr.pdf SFIN 4/14/2011 9:00:00 AM
HB 126
SEAALASKA McDowell Group studies.pdf HRES 2/14/2011 1:00:00 PM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB 105 Public Briefing 1.24.2011.pdf HFIN 3/22/2011 1:30:00 PM
SFIN 4/14/2011 9:00:00 AM
HB 105
HB126 BON Auditor Cover Ltr.pdf SFIN 4/14/2011 9:00:00 AM
HB 126
HB 119 - CSC CSHB119 Questions and Answers.pdf SFIN 4/14/2011 9:00:00 AM
SFIN 4/15/2011 9:00:00 AM
HB 119
HB 119 - SCS CSHB119 Explanation of Changes.pdf SFIN 4/14/2011 9:00:00 AM
SFIN 4/15/2011 9:00:00 AM
HB 119
HB 119 - SCS CSHB119 Sectional Analysis.pdf SFIN 4/14/2011 9:00:00 AM
SFIN 4/15/2011 9:00:00 AM
HB 119
HB 119 - 1.21.11 Gov Transmittal LTR.pdf SFIN 4/14/2011 9:00:00 AM
HB 119
HB 119 - SCS CSHB119_Hearing_Information.pdf SFIN 4/14/2011 9:00:00 AM
HB 119
HB 24 - Letter from Kate Giard.PDF SFIN 4/14/2011 9:00:00 AM
SFIN 4/16/2011 10:00:00 AM
HB 24