Legislature(2009 - 2010)SENATE FINANCE 532
04/15/2010 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB424 | |
| HB369 | |
| HCR22 | |
| HB376 | |
| HB294 | |
| HB342 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| = | HB 424 | ||
| = | HB 369 | ||
| = | HCR 22 | ||
| + | HB 294 | TELECONFERENCED | |
| + | HB 342 | TELECONFERENCED | |
| + | HB 376 | TELECONFERENCED | |
| + | TELECONFERENCED |
SENATE FINANCE COMMITTEE
April 15, 2010
2:04 p.m.
2:04:37 PM
CALL TO ORDER
Co-Chair Stedman called the Senate Finance Committee
meeting to order at 2:04 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
Representative Bill Stoltze; Deven Mitchell, Executive
Director, Alaska Municipal Bond Bank Authority, Department
of Revenue; Representative Mike Chenault; Senator Lesil
McGuire; Tom Wright, Staff, Mike Chenault; Barbara
Tuckness, Director of Governor and Legislative Affairs,
Teamsters Union; Harold Heinze, CEO, Alaska Natural Gas
Authority; Dan Fauske, Alaska Housing Finance Corporation;
John Binkly, Chairman, Alaska Railroad Association;
Representative Joule, Sponsor; Liz Clement, Staff,
Representative Bob Herron; Pat Davidson, Legislative
Auditor, Legislative Audit Division, Legislative Affairs
Agency; Representative Mark Neuman; Representative Tammie
Wilson.
PRESENT VIA TELECONFERENCE
Mead Treadwell, U.S. Arctic Research Commission.
SUMMARY
HB 294-USE, REGULATION, AND OPERATION OF BOATS
HB 294 was HEARD and HELD in Committee for further
consideration.
HB 342-EXTEND BOARD OF REAL ESTATE APPRAISERS
HB 342 was HEARD and HELD in Committee for further
consideration.
HB 369-IN-STATE PIPELINE/ MANAGER/TEAM
HB 369 was HEARD and HELD in Committee for further
consideration.
HB 376-EXTEND BD OF PSYCHOLOGIST & PSYCH. ASSOC.
HB 376 was HEARD and HELD in Committee for further
consideration.
HB 424-G.O. BONDS:EDUC./LIBRARY/RESEARCH FACIL.
HB 424 was HEARD and HELD in Committee for further
consideration.
HCR 22-ALASKA NORTHERN WATERS TASK FORCE
HCR 22 was heard and HELD in Committee for further
consideration.
CS FOR HOUSE BILL NO. 424(FIN) am
"An Act providing for and relating to the issuance of
general obligation bonds for the purpose of paying the
cost of design and construction of library, education,
and educational research facilities; and providing for
an effective date."
2:05:02 PM
Co-Chair Stedman introduced HB 424.
REPRESENTATIVE BILL STOLTZE explained that HB 424 allows
for Alaskans to vote on a General Obligation (GO) Bond
package totaling $397,200,000 for statewide education and
educational research facilities. He stated that HB 424 is
similar to other bond options presented for rural schools
and school debt reimbursement. The proposed plan will
utilize Build America Bonds. This approach will address the
state's essential education needs. He commented on the
Kasayulie school litigation and the moral imperative to
fund rural schools.
2:11:29 PM
Representative Stoltze commented that Devin Mitchell was
available from the Department of Revenue (DOR).
Co-Chair Stedman asked about the fall election and its
influence on the legislation. Co-Chair Stoltze replied that
the constitution directs that bond proposals appear in the
general election. He believed that pledging the faith and
credit of Alaskans warranted a general election vote.
Senator Thomas agreed that a general election brings the
greatest number of voters, yet wondered if a special
election might qualify.
Co-Chair Stedman requested a general overview of the
bonding mechanism.
2:14:53 PM
DEVEN MITCHELL, EXECUTIVE DIRECTOR, ALASKA MUNICIPAL BOND
BANK AUTHORITY, DEPARTMENT OF REVENUE explained that the
state compiled a series of legal documents that obligate
Alaska's full faith in taxing authority subject to approval
of the legislation in concurrence from Alaskan voters. He
noted that the current market is best received for GO bond
propositions as the timing is good. He informed that the
state normally sells bonds through a less flexible
competitive process whereby an underwriter is selected upon
the date of sale. The common practice limits the ability to
structure debt service.
2:17:20 PM
Representative Stoltze clarified that his previous
assumption regarding bond proposals and the general
election may be incorrect.
Senator Huggins expressed appreciation for Representative
Stoltze.
Senator Olson echoed the comments of Senator Huggins. He
asked if another bond package with the same agenda existed.
Representative Stoltze responded that the excellent bond
rates of seven percent will reduce the overall cost for
Alaskans. He stated that the bill may provide the mechanism
with optimal timing. He stated that the approach was
appropriate for the current market.
2:20:37 PM
Mr. Mitchell clarified that an allocation of qualified
school construction bonds to the state in 2009 and 2010 can
now be issued as direct subsidy bonds.
Co-Chair Stedman understood that the three schools would be
exempt from interest cost. Mr. Mitchell agreed that up to
$57 million in bond debt is exempt from interest.
Representative Stoltze included the Mt. Edgecombe facility
and the Juneau State Archives and Museum in the HB 424
project list.
Co-Chair Stedman pointed out one fiscal note from DOR for
$10 thousand in general funds to cover the cost of public
notice requirements. The debt service of approximately $30
million would be collected from the operating account. In
the event of a deficit due to decline in oil price, the
general fund would fall back on the savings.
Mr. Mitchell pointed out that an interest expense payment
in FY11 would be expected. He agreed that a catch all
appropriation exists in the operating budget for GO debt
service, but the department would amend their fiscal note
to satisfy the conservative requirements of the market.
2:24:13 PM
HB 424 was HEARD and HELD in Committee for further
consideration.
CS FOR HOUSE BILL NO. 369(FIN) am
"An Act relating to an in-state natural gas pipeline,
the office of in-state gasline project manager, and
the Joint In-State Gasline Development Team; requiring
the development of an in-state natural gas pipeline
plan, to be delivered to the legislature by July 1,
2011, that provides for a gasline that is operational
by December 31, 2015; directing the Joint In-State
Gasline Development Team to assume responsibilities
under sec. 19, ch. 14, SLA 2009; requiring expedited
review and action by state agencies or entities
relating to the in-state natural gas pipeline project;
and providing for an effective date."
2:24:43 PM
REPRESENTATIVE MIKE CHENAULT explained the house bill. He
explained HB 369 forms a Joint In-state Gasline Development
Team (JIGDT). The team includes the chief executive officer
of the Alaska Housing Finance Corporation (AHFC), the chief
executive of the Alaska Railroad, the commissioner of the
Department of Transportation and Public Facilities
(DOT/PF), the chief executive of the Alaska Natural Gas
Development Authority (ANGDA), and the in-state gasline
project coordinator. The legislation describes the duties
of the in-state gasline coordinator in statute and sets a
deadline of July 1, 2011. The project plan specifies design
and construction of the in-state gasline. The plan must
include specifics to coordinate and facilitate the
construction, ownership, operation, and management of the
pipeline. The development team must prepare plans and
designs necessary for construction. The route selected is
determined by the development team and must be economical
and provide gas to residents at a reasonable cost. He
continued that the legislation establishes an expedited
process for information access and cooperation among state
entities. The bill outlines the duties of the development
team yet allows for flexibility. The bill preauthorizes
ANGDA to issue bonds for gas related programs and projects.
2:28:39 PM
Representative Chenault stated that the bill allows the
best opportunity for access to in-state gas. He continued
that the Cook Inlet gas supply has dwindled and other
opportunities must be sought. The in-state use of natural
gas will provide additional employment opportunities. The
bill will allow Alaska to move forward and access a supply
for the next 100 years.
2:30:47 PM
Co-Chair Hoffman requested a sectional analysis following
questions by committee members.
Senator Thomas appreciated the intent of the legislation
although it does not address all of the pertinent energy
needs for Alaska. He appreciated the opportunity for
additional employment for Alaskans.
Senator Olson asked the approximate amount of the bond.
Representative Chenault responded $250 million is the ANGDA
portion of the bonding capacity.
Senator Olson asked how the legislation compliments the
other proposed in-state gasline projects such as Denali and
TransCanada. Representative Chenault responded that this
bill addresses in-state gas use. He maintained that Alaska
cannot wait for other projects knowing that the gas supply
for the Railbelt is dwindling.
2:34:42 PM
Senator Olson asked how other in-state gas line proposals
compare to that of HB 369. Representative Chenault
responded that the HB 369 instate gas line's development
team is given the freedom to determine the most economical
project.
SENATOR LESIL MCGUIRE, echoed the comments made by the
Speaker in respect to the in-state gas caucus. She
explained that energy needs were the focus. The broad
benefits of the in-state gas line were explored in an
effort to provide economic success for Alaska. She
clarified that the HB 369 project compliments the Alaska
Gasline Inducement Act (AGIA). She pointed out that with
shale discoveries in the lower 48, open season for AGIA may
not amount to the preconceived expectations. The Denali
Project and the TransCanada projects provide available
options. She explained that the intent of the legislation
is to create a team of Alaskans with an aggressive time
line and directive. December 15th is the first timeline.
She stated that the legislation requests that the team meet
with buyers and sellers of gas and provide a plan on July
1, 2011. Private sector partnership is an option. She
explained that the involvement of AHFC, The Alaska
Railroad, and ANGDA provide unique bonding authority
abilities. She stressed that the bill sponsors view the
pipeline as a "steel highway" that would provide an
opportunity for Alaska to progress into the next level of
economic development.
2:42:05 PM
Senator Huggins commended the partnership between Senator
McGuire and Representative Chenault.
Senator Ellis asked about ANGDA's role in HB 369. Senator
McGuire responded that ANGDA is a member of the in-state
gas caucus along with the Alaska Railroad, DOT/PF and an
in-state gas coordinator. She pointed out a merger drafted
in the last few pages of the bill formerly known as HB 44,
which expands ANGDA's authority to more closely reflect the
activities conducted today. The latter portion of the bill
gives ANGDA $250 million worth of bonding authority. The
legislature would review any issued bonds.
2:46:13 PM
TOM WRIGHT, STAFF, MIKE CHANAULT, presented a sectional
analysis.
COMMITTEE SUBSTITUTE FOR HOUSE BILL 369 (FIN)
"An Act relating to an in-state natural gas pipeline,
the office of in-state gasline project manager, the
Joint In-State Gasline Development Team; requiring the
development of an in-state natural gas pipeline plan,
to be delivered to the legislature by July 1, 2011,
that provides for a gasline that is operational by
December 31, 2015; directing the Joint In-State
Gasline Development Team to assume responsibilities
under sec. 19, ch. 14, SLA 2009; requiring expedited
review and action by state agencies or entities
relating to the in-state natural gas pipeline project;
and providing for an effective date."
(Changes in the House Finance version from the
Resources Committee Substitute are highlighted and
underlined.)
Section 1: Adds a new chapter, Chapter 34: In-State
natural Gas Pipeline, to AS 38, Public Land.
Sec. 38.34.010. In-state gasline project manager. (a)
Creates the position of in-state gasline project
manager within the governor's Office. This position
will continue until one year after commercial
operation of the in-state natural gas pipeline begins.
(b) The Governor appoints an individual to the
position of an in-state gasline manager and may be
removed at the Governor's discretion. (c) Describes
the duties of the in-state gasline project manager.
Sec. 38.34.020. Expedited review and action by state
agencies or entities. (a) States that any state agency
or entity conducting and taking action relating to the
in-state gasline shall be expedited. (b) A state
agency or entity may not include in any project
certificate, right of way, permit or other
authorization issued to a licensee a term or condition
that is not required by law if the in-state project
manager determines the term or condition would prevent
or impair the expeditious construction and operation
or expansion of the in-state gasline. (c) A state
agency or entity may not, unless required by law,
amend or abrogate any certificate, right of way,
permit or other authorization issued to a licensee if
the project manager determines the action would
prevent or impair the expeditious construction and
operation or expansion of the in-state gasline.
Sec. 38.34.030. Joint In-state Gasline Development
Team. (a) Establishes the Joint In-State Gasline
Development Team in the Governor's Office. The team
consists of the commissioner of the Department of
Transportation and Public Facilities or designee, the
chief executive officer of the Alaska Railroad
Corporation or designee, the chief executive officer
of the Alaska Natural Gas Development Authority, the
in-state gasline project manager and the chief
executive officer of the Alaska Housing Finance
Corporation. (b) Names the Alaska Housing Finance
Corporation's chief executive officer as chair. (c)
Allows the development team to hire staff, enter into
contracts and exercise other powers to carry out its
functions.
Sec. 38.34.040. Duties of the Development Team. (a)
Ensure a project plan for the development of an in-
state gasline is completed and delivered to the
legislature by July 1, 2011. The project plan must
specify and document how an in-state gasline can be
designed, financed, constructed and made operational
by December 31, 2015. (b) The Joint In-State Gasline
Development Team is to assume all executive authority
over and managerial responsibility for all activities
enumerated under sec. 19, ch. 14, SLA 2009, including
work previously completed, work in process, and work
for which money has been encumbered but that is not
completed on the effective date of this subsection.
(c) Describes specific plans that are to be included
within the project plan for an in-state gasline that
will serve Fairbanks, the southcentral region of the
state, and other communities whenever practicable,
connecting with or enhancing the existing gas pipeline
system, and reaching to tidewater. (d) The
development team's work product is to include an
analysis of alternative possible routes and select a
route that is consistent with the following
requirements: (1) is the most economical, (2) will
provide gas to residents at a reasonable cost, (3)
allows for connecting lines to serve industrial,
residential and utility customers along the entire
route and in other regions of the state that can be
served at commercially feasible rates, (4) uses state
land and existing state highway and railroad rights of
way to the maximum extent feasible, (5) uses existing
highway and railroad bridges, gravel pits equipment
yards and maintenance facilities and other existing
facilities and resources to the maximum extent
feasible. (e) With the intent that any project-related
assets acquired or developed be available for transfer
or sale to the entity best able to complete the
project, the development team is to: (1) prepare
plans and designs necessary for the construction of
the in-state gasline; (2) coordinate with entities
qualified to build, own and operate the gasline; (3)
identify, apply for and obtain rights-of-way and other
permits for the project route; (4) work with other
entities to promote gas supply and purchase contracts
required for the project to be commercially viable;
(5) prepare cost estimates for project design,
construction and operation to determine the project's
feasibility and the projected cost of natural gas to
consumers; (6) coordinate with and use, to the fullest
extent, possible existing work by other state agencies
and entities before contracting for new reports and
research and analysis; (7) determine regulatory
authority over the pipeline project and perform any
necessary compliance requirements; (8) identify and
apply for, or support extension of, existing permits
for export of Alaska natural gas if that export
improves project economics and will reduce the price
of natural gas to in-state consumers. (f) Any rights
to a gasline corridor obtained by a state agency under
eminent domain may be transferred to a private entity.
(g) Describes the various aspects of the in-state
gasline project the development team may consider.
Sec. 38.34.050. Cooperation and access to information.
(a) States the development team may have access to a
state entity's information to include confidential
information that may relate to the in-state gasline or
prove useful in planning, design, construction or
operation of the gasline. Confidential information
received by the Development Team shall be kept
confidential. (b) All state agencies are to cooperate
and give priority to requests for information from the
Development Team. The Development Team is to avoid
duplicating studies, plans, and designs that have
already been produced or otherwise obtained by state
entities.
Sec. 38.34.060. Conflicts of interest. (a) If a
member of the Development Team acquires, owns or
controls a direct or indirect interest in property, an
organization or business that might be affected by the
in-state gasline project or other matters under
consideration by the Development Team shall
immediately disclose the interest to the Development
Team. This disclosure is part of the public record
and shall be included in the minutes of the first
meeting of the Development Team held after the
disclosure. (b) Members of the development team are
subject to AS 39.50 (Public Official Disclosure) and
AS 39.52 (Alaska Executive Branch Ethics Act).
Sec. 38.34.099. Definitions. Defines the in-state
natural gas pipeline and the North Slope.
Section 2: Amends AS 39.25.110, Exempt service. Adds
the in-state gasline project manager to the exempt
service list.
Section 3: Immediate effective date.
2:53:13 PM
Senator Thomas asked about confidential information and the
team's administration of public notice where meetings are
concerned.
Mr. Wright responded that the team is not exempt from the
Open Meetings Act. The team is allowed executive session to
discuss finances or operations that might have a potential
effect on the state or during the discussion of
confidential information.
Co-Chair Hoffman mentioned three fiscal notes, one from the
governor's office for $350,700 in general funds to hire an
in-state gasline coordinator, one from DOT/PF for
$1,451,100 in general funds for right of way permitting,
and one from the DOR for $21,340,600 in general funds for
AHFC.
Mr. Wright pointed out that the fiscal note from DOT/PF
does not apply as the AHFC fiscal note incorporates all
state agencies.
2:55:56 PM
BARBARA TUCKNESS, DIRECTOR OF GOVERNOR AND LEGISLATIVE
AFFAIRS, TEAMSTERS UNION testified in support of HB 369.
She pointed out that the bill lacks a provision
guaranteeing that Alaskan citizens will be employed for
this project. She noted that the bill makes no mention of
training. She appreciated consideration of Alaskan workers
for the project.
Senator Ellis asked for a statement from Mr. Heinze
regarding his role in the project.
2:59:10 PM
HAROLD HEINZE, CEO, ALASKA NATURAL GAS AUTHORITY responded
that ANGDA supports the legislature's direction in HB 369.
He opined that the bill provides the guidance required by
the team. He emphasized that ANGDA is amenable to team
participation. He stated that he feels comfortable working
under the leadership of Dan Fauske.
Co-Chair Hoffman requested that Dan Fauske be allowed the
same opportunity to explain his role. He asked how the
position would affect his primary position with AHFC.
DAN FAUSKE, ALASKA HOUSING FINANCE CORPORATION, expressed
excitement about the project opportunity. He noted that
arrangements will be made to carry out his duties at AHFC.
He spoke to the capability of his staff at AHFC. He stated
that he looked forward to the partnerships and team
atmosphere.
Co-Chair Hoffman asked if the job will deter from his
weatherization and energy efficiency duties at AHFC. Mr.
Fauske stated no.
3:02:27 PM
JOHN BINKLY, CHAIRMAN, ALASKA RAILROAD ASSOCIATION echoed
the sentiments of Mr. Heinze and Mr. Fauske. He expressed
excitement regarding participation in the project and the
team.
Co-Chair Hoffman asked if he missed his work as a
legislator and chair of the Senate Finance Committee. Mr.
Binkly responded that he preferred the view from the other
side of the table.
HB 369 was HEARD and HELD in Committee for further
consideration.
CS FOR HOUSE CONCURRENT RESOLUTION NO. 22(FIN)
Establishing and relating to the Alaska Northern
Waters Task Force.
3:05:13 PM
REPRESENTATIVE JOULE, SPONSOR, provided a broad overview of
the bill. Due to the Arctic's unique needs regarding
melting ice on the polar cap and the travel of freight
traffic ships. Many opportunities for discussion exist
regarding cruise ship travel and new fisheries in the
arctic region. The Alaska Northern Waters Task Force
created by this legislation would gather information about
Arctic waters. He explained the formation of the task force
and its potential members.
3:09:05 PM
Co-Chair Stedman noted one fiscal note from the legislature
for $150 thousand in general funds to cover the cost of
travel and expert witnesses on the task force.
3:09:43 PM
MEAD TREADWELL, CHAIR, U.S. ARCTIC RESEARCH COMMISSION (via
teleconference) enthusiastically offered to work with the
task force. He stated that multiple activities to structure
arctic shipping are underway. As the ocean becomes more
accessible, ports and harbors must be considered.
Representative Joule looked forward to the bill passing out
of committee.
HCR 22 was heard and HELD in Committee for further
consideration.
HOUSE BILL NO. 376
"An Act extending the termination date of the Board of
Psychologist and Psychological Associate Examiners;
and providing for an effective date."
3:12:12 PM
LIZ CLEMENT, STAFF, REPRESENTATIVE BOB HERRON, She
explained that the bill extends the sunset date of the
board of psychologists and psychological associate
examiners from its current expiration date of June 30, 2010
to a new sunset on June 30, 2018. She described the board's
responsibilities. She noted that the representatives from
Legislative Budget and Audit (LB&A) were available for
questions.
Co-Chair Stedman pointed out one fiscal note from the
Department of Commerce, Community and Economic Development
for $78,500 in receipt supported services to continue board
funding included in the FY11 operating budget.
PAT DAVIDSON, LEGISLATIVE AUDITOR, LEGISLATIVE AUDIT
DIVISION, LEGISLATIVE AFFAIRS AGENCY, recommended an
extension to June 30, 2018. She explained that the
extension was typical.
HB 376 was HEARD and HELD in Committee for further
consideration.
CS FOR HOUSE BILL NO. 294(FIN)
"An Act amending the termination date of certain
statutes relating to the use, operation, and
regulation of boats, a uniform state waterway marking
system, and civil liability for boat owners by
extending the termination date by two years; providing
for an effective date by amending the effective date
of secs. 3, 5, 7, 9, 11, 14, 16, 18, 20, 23, 26, and
27, ch. 28, SLA 2000, as amended; and providing for an
effective date."
3:17:01 PM
REPRESENTATIVE MARK NEUMAN introduced the Alaska Boating
Safety Program and discussed the components of the
legislation. He noted that components of the program
include the Alaska Water Wise boating safety course, and
the Kids Don't Float program.
Senator Egan appreciated the legislation and wondered why
the extension date was not longer.
Representative Neuman explained that the sunset date was
established in the finance committee. The original version
had a sunset of 4 years.
Representative Neuman expressed appreciation for the
hearing.
Co-Chair Stedman noted one fiscal note from the Department
of Natural Resources (DNR) for $200 thousand in general
funds included in the FY 11 budget.
HB 294 was HEARD and HELD in Committee for further
consideration.
HOUSE BILL NO. 342
"An Act extending the termination date of the Board of
Certified Real Estate Appraisers; and providing for an
effective date."
3:21:08 PM
REPRESENTATIVE TAMMIE WILSON discussed the legislation and
the recommendation to extend the bill of real estate
appraisers to June 30, 2014. She explained the composition
of the board and their duties.
Co-Chair Stedman asked about the recommendation. Ms.
Davidson replied that concerning administrative issues were
discovered during the board review. The board was created
in an effort to increase the professional requirements
associated with real estate appraisers. If the board ceases
to operate in accordance with federal guidelines,
significant negative impacts in regard to participation in
federal programs might occur. The issues identified were
not significant individually, but the board's lack of
response led to concern leading to the decision of a four
rather than an eight year extension.
Senator Olson asked if the administrative shortcomings and
the other errors found in the federal investigation
affected the licensees' ability to conduct business. Ms.
Davidson responded no.
Co-Chair Stedman mentioned one fiscal note for $99,700 in
receipt supported services included in the FY 11 budget.
3:25:27 PM
Representative Wilson expressed appreciation for the
hearing of HB 342.
HB 342 was HEARD and HELD in Committee for further
consideration.
ADJOURNMENT
The meeting was adjourned at 3:25 PM.
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