Legislature(2011 - 2012)SENATE FINANCE 532
04/14/2011 09:00 AM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB105 | |
| HB24 | |
| HB126 | |
| HB119 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB 105 | TELECONFERENCED | |
| + | HB 24 | TELECONFERENCED | |
| + | HB 126 | TELECONFERENCED | |
| + | HB 119 | TELECONFERENCED | |
| + | 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 |