Legislature(2023 - 2024)SENATE FINANCE 532
02/08/2024 01:30 PM Senate FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB125 | |
| SB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 125 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | SB 170 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
February 8, 2024
1:36 p.m.
1:36:19 PM
CALL TO ORDER
Co-Chair Olson called the Senate Finance Committee meeting
to order at 1:36 p.m.
MEMBERS PRESENT
Senator Donny Olson, Co-Chair
Senator Bert Stedman, Co-Chair
Senator Click Bishop
Senator Jesse Kiehl
Senator Kelly Merrick
Senator David Wilson
MEMBERS ABSENT
Senator Lyman Hoffman, Co-Chair
ALSO PRESENT
Ken Alper, Staff, Senator Donny Olson; Bryan Butcher, CEO,
Alaska Housing Finance Corporation; Akis Gialopsos, Deputy
Executive Director, Alaska Housing Finance Corporation; Tim
Sandstrom, Chief Operating Officer, Alaska Energy
Authority; Senator Scott Kawasaki, Sponsor; Senator Shelley
Hughes, Sponsor; Lesley Thompson, Self, Juneau; Senator
Cathy Giessel.
PRESENT VIA TELECONFERENCE
Dyani Chapman, State Director, Alaska Environments,
Anchorage.
SUMMARY
SB 125 AK HOUSING FINANCE CORP: SUSTAIN ENERGY
SB 125 was HEARD and HELD in committee for
further consideration.
SB 170 EXTEND SENIOR BENEFITS PAYMENT PROGRAM
CSSB 170 was REPORTED OUT of committee with six
"do pass" recommendations, and with one new
fiscal note from the Department of Health.
SENATE BILL NO. 125
"An Act relating to subsidiary corporations of the
Alaska Housing Finance Corporation; and establishing
the Alaska energy independence fund."
1:37:08 PM
Senator Kiehl MOVED to ADOPT the committee substitute for
SB 125, Work Draft 33-GS1074\B (Dunmire/Gunther, 2/3/24).
Co-Chair Olson OBJECTED for discussion.
1:37:45 PM
KEN ALPER, STAFF, SENATOR DONNY OLSON, discussed the
Summary of Changes (copy on file):
Change 1: Deleted what was Sec. 4 of the original
version of the bill. This section would have created a
new "energy independence fund" for the purpose of
financing certain projects. The remaining bill enables
AHFC to set up a subsidiary corporation to pursue
federal and other funding, finance projects, and
otherwise implement the goals of the bill. But without
the fund, there will no longer be the request for a
state general fund appropriation to capitalize the
fund.
Change 2: Adds an immediate effective date to create
the new AHFC subsidiary and make the other changes in
the bill.
Senator Kiehl wondered whether removing the fund created a
barrier to the legislature investing through the subsidiary
corporation for sustainable energy projects.
Mr. Alper replied that the answer should be addressed in
the presentation.
Co-Chair Olson WITHDREW the OBJECTION. There being no
further objection, it was so ordered.
1:40:00 PM
BRYAN BUTCHER, CEO, ALASKA HOUSING FINANCE CORPORATION,
discussed the presentation, "Senate Bill 125: Alaska's
Energy Subsidiary" (copy on file). He pointed to slide 3,
"Presentation Outline":
POLICY OBJECTIVES
Create a subsidiary corporation of the Alaska Housing
Finance Corporation to
•Coordinate with Alaska Energy Authority, provide
technical assistance for renewable energy projects and
home improvements
•Magnetize federal, private for-profit, and private
non-profit capital to enhance an investment stack for
renewable opportunities
ollaborate to provide financing opportunities and
tools for renewable projects for Alaskans.
1:41:15 PM
AKIS GIALOPSOS, DEPUTY EXECUTIVE DIRECTOR, ALASKA HOUSING
FINANCE CORPORATION, addressed slide 4, "POLICY
OBJECTIVES":
Create a subsidiary corporation of the Alaska Housing
Finance Corporation to
•Coordinate with Alaska Energy Authority, provide
technical assistance for renewable energy projects and
home improvements
•Magnetize federal, private for-profit, and private
non-profit capital to enhance an investment stack for
renewable opportunities
•Collaborate to provide financing opportunities and
tools for renewable projects for Alaskans.
Mr. Gialopsos pointed to slide 5, "POLICY OBJECTIVES
(CONTINUED)":
Subsidiary proposed to spur sustainable energy
projects:
• The subsidiary would help spur energy innovation
consistent with Governor Dunleavy's administration
objectives
• Office of Energy Innovation (AO 340)
• Alaska Energy Security Task Force (AO 344)
Mr. Gialopsos looked at slide 6, "POLICY OBJECTIVES
(CONTINUED)":
Subsidiary can help Alaska be competitive for historic
federal funding opportunities to improve the energy
profile for homes and businesses:
•The U.S. Environmental Protection Agency's
Greenhouse Gas Reduction Fund (GHGRF) grant
opportunity from a pool of $27 billion in
available funding (award announcements expected
in spring/summer 2024; funds distributed
nationally later)
•Waivers from the Department of Energy for loan
guarantees if funded through a State Energy
Finance Institute (e.g. Energy Subsidiary)
•Stacked with time limited energy tax credits
1:47:38 PM
Co-Chair Olson wondered whether another state had a model
of a similar program.
Mr. Gialopsos replied that there were over 23 states that
had various related programs. He stated that Connecticut
was the first state to implement the system.
Co-Chair Olson asked about the success of those programs.
Mr. Gialopsos stated that there were various successes and
outcomes. He shared that Connecticut had worked with
financial institutions to ensure efficacy of projects such
as solar power, heat pumps, and wind farms.
1:49:52 PM
Mr. Gialopsos addressed slide 7, "POLICY OBJECTIVES
SUMMARY":
Joint Application with AHFC and AEA on Solar for All:
Aggregate $100 million applied to EPA for the Solar
for All portion of the Greenhouse Gas Reduction Fund
•Evenly split between AHFC (residential solar
installation) and community utility grade solar (AEA)
•Required focus on lower income households
•$5 million set aside for financing
Senator Bishop wondered if $95 million would be allocated
for solar power and $5 million would be for other financing
such as heat pumps.
Mr. Gialopsos replied that every dollar in the application
must be used for the installation of solar panels,
including the $5 million for other financing.
Mr. Gialopsos highlighted slide 8, "Role of AHFC in
Energy":
Alaska Housing Finance Corporation (AHFC) has a long
track record of managing innovative programs to tackle
energy challenges for homeowners and communities.
Mr. Butcher discussed slide 9, "Role of AHFC in Energy":
Energy Efficiency Interest Rate Reduction:
HFC offers interest rate reductions when financing
new or existing energy efficient homes, or when
borrowers make energy improvements to an existing home
Renovation Loan Option:
•Allows for improvements that increases a home's
value; increases the energy efficiency of a home; and
incorporates universal design principles to age-in-
place all while improving Alaska's aging housing
stock
Since FY20, AHFC has financed 434 renovation loans for
just over $100M
Co-Chair Olson wondered whether the funding was for
strictly heat pumps.
Mr. Butcher replied that the money was for anything that
would make something more energy efficient.
1:55:10 PM
Mr. Butcher looked at slide 10, "Role of AHFC in Energy":
Weatherization:
•AHFC administers the federal and state weatherization
program, making rural and urban homes in Alaska safer,
more resilient to the elements, and more affordable to
heat.
•Manages AK Warm Energy Modeling Software, Home Energy
Rating System (HERS) and statewide database of all
home energy audits.
•Provides training and certification for all Energy
Raters
•Building and Energy Codes reference statutory
requirements to ensure investments meet thermal and
lighting standards
Workforce readiness EENow training
2:00:44 PM
Mr. Butcher pointed to slide 11, "Role of AHFC in Energy":
Experiences meeting unique challenges:
•AHFC has a tradition of working with sister agencies
and organizations, stepping up, and meeting the needs
of Alaskans
•Standing up programs to help Alaskans in need:
•Home Energy Rebate
•Emergency Rental Assistance and Homeowner Assistance
•Standing up subsidiaries to meet policy needs of
Alaskans:
•Alaska Corporation on Affordable Housing
Mr. Butcher looked at slide 12, "Role of AHFC in Energy
Summary":
Alaska Housing Finance Corporation has decades of
experience crafting programs and structures to meet
the energy needs of Alaskans.
2:02:53 PM
TIM SANDSTRON, CHIEF OPERATING OFFICER, ALASKA ENERGY
AUTHORITY, pointed to slide 13, "About AEA":
Railbelt Energy AEA owns the Bradley Lake
Hydroelectric Project, the Alaska Intertie, and the
Sterling to Quartz Creek Transmission Line all of
which benefit Railbelt consumers by reducing the cost
of power.
Power Cost Equalization (PCE) PCE reduces the cost
of electricity in rural Alaska for residential
customers and community facilities, which helps ensure
the sustainability of centralized power.
Rural Energy AEA constructs bulk fuel tank farms,
diesel powerhouses, and electrical distribution grids
in rural villages. AEA supports the operation of these
facilities through circuit rider and emergency
response programs.
Renewable Energy and Energy Efficiency AEA provides
funding, technical assistance, and analysis on
alternative energy technologies to benefit Alaskans.
These include biomass, hydro, solar, wind, and others.
Grants and Loans AEA provides loans to local
utilities, local governments, and independent power
producers for the construction or upgrade of power
generation and other energy facilities.
Energy Planning In collaboration with local and
regional partners, AEA provides economic and
engineering analysis to plan the development of cost-
effective energy infrastructure.
AEA's mission is to reduce the cost of energy in
Alaska. To achieve this mission, AEA strives to
diversify Alaska's energy portfolio increasing
resiliency, reliability, and redundancy
Mr. Sandstrom pointed to slide 14, "AEA ACTIVE PROJECTS AND
SERVICES."
Senator Bishop queried the award amount of the Volkswagen
settlement.
Mr. Sandstrom agreed to provide that information.
2:05:22 PM
Mr. Gialopsos looked at slide 15, "Senate Bill 125:
Overview":
Senate Bill 125 proposes one key action for the
Legislature's consideration:
• Empower AHFC to work with AEA on developing
sustainable energy development through several tools,
including establishing a non-profit subsidiary
corporation.
Mr. Gialopsos discussed slide 16, "Senate Bill 125:
Proposed Policy Implementation Process":
1. Legislation empowering AHFC to establish a non-
profit subsidiary is enacted;
2. The AHFC Board of Directors, in consultation with
legal counsel, creates a non-profit subsidiary
corporation. Composes bylaws and initial regulations
by AHFC for the non-profit subsidiary;
3. The non-profit subsidiary acquires relevant staff
and works with Alaska Energy Authority and AHFC on
crafting the sustainable energy development programs
articulated in Senate Bill 125;
4. The non-profit subsidiary begins aggregating
federal, state, and/or third-party funding. Funding
stack and conditions inform programmatic development.
2:10:15 PM
Mr. Gialopsos explained the Sectional Analysis (copy on
file):
Section 1: Adds a new subsection (AS 18.56.010 (h))
that acknowledges the public benefit of a subsidiary
corporation of Alaska Housing Finance Corporation
(AHFC) to assist in financing sustainable energy
development.
Section 2: Amends existing AHFC statutes to authorize
creation of a subsidiary corporation for the purpose
of sustainable energy development.
Section 3: Amends AHFC's statutes to create or work
with public, quasi-public or nonprofit organizations
that provide financial assistance for sustainable
energy projects.
Section 4: Adds a new section (AS 18.56.870)
establishing the Alaska Energy Independence Fund.
(a) Adds a new section to AHFC's statutes to
create a fund within AHFC (not the proposed
subsidiary) that may be appropriated or
transferred, including federal grants, AHFC
deposits, unrestricted loan payments, interest or
other income earned on loans, investments, or
assets of the fund(s).
It allows AHFC to establish interest rates,
security provisions and other loan terms as
appropriate.
(b) Authorizes certain uses of money and assets
of the Alaska energy independence fund to make
loans; secure bonds; provide or leverage capital
through loan guarantees, credit enhancements,
equity capital, indirect funding; and other
financial products or services approved by AHFC
in regulation.
This section further allows AHFC to pay the costs
of administering both the fund as well as the
terms of the loan made through the fund.
(c) Identifies the Corporation as the fiduciary
of the fund under 37.10.071 which falls under
Alaska's Department of Revenue and allows for it
to invest the fund in accordance with an
investment policy adopted by the Corporation that
may deviate from the prudent investment rule.
Annual reporting according to Generally Accepted
Accounting Principles (GAAP) is required.
(d) Allows the Corporation as part of its loan
approval process to require a deed of trust on
the building as well as real estate for which the
building is located.
(e) Allows the Corporation to contract with
Alaska Energy Authority for technical review,
expertise or analysis of proposed loans.
(f) Does not allow the Corporation to make a loan
guarantee in excess of $20 million without
legislative approval.
(g) Allows the Corporation to adopt regulations
in order to administer the fund.
(h) Acknowledges the fund is not a dedicated
fund.
Section 5: Adds new definitions including sustainable
energy development; building energy efficiency;
electrical infrastructure; clean transportation; and
any other greenhouse gas emissions reduction, energy
efficiency, or zero-emission technology.
Mr. Butcher furthered that the federal government had
limitations on the dollars that could be used on renewable
energy projects.
2:16:04 PM
Senator Bishop wondered whether there was a stop in Huslia.
Mr. Butcher replied in the affirmative.
Senator Bishop recalled that there was a solar farm in
Huslia.
Mr. Butcher stressed that many new homes were built with
solar on roofs.
Senator Merrick wondered whether funding was received for
the solar panels.
Mr. Butcher replied that the COVID dollars were used for
those homes.
Mr. Gialopsos stated that the final section of the bill
added an immediate effective date to the legislation.
Senator Kiehl wondered whether there could be changes to
allow for the subsidiary corporation to participate in
novel projects to delivery energy across international
border.
Mr. Gialopsos agreed to provide that information.
Co-Chair Olson OPENED public testimony.
2:20:23 PM
DYANI CHAPMAN, STATE DIRECTOR, ALASKA ENVIRONMENTS,
ANCHORAGE (via teleconference), spoke in spoke in support
of the bill.
Co-Chair Olson CLOSED public testimony.
SB 125 was HEARD and HELD in committee for further
consideration.
2:21:31 PM
AT EASE
2:26:23 PM
RECONVENED
SENATE BILL NO. 170
"An Act extending the Alaska senior benefits payment
program; and providing for an effective date."
2:26:42 PM
Senator Wilson MOVED to ADOPT the committee substitute for
SB 170, Work Draft 33-LS1119\S (Bergerud, 2/6/24).
Co-Chair Olson OBJECTED for discussion.
KEN ALPER, STAFF, SENATOR DONNY OLSON discussed the
Explanation of Changes (copy on file):
Change 1: Removes the sunset provision from the Senior
Benefits program. This makes the program permanent and
no longer needing periodic legislative
reauthorization.
Change 2: Repeals the still-existing statutes that
established the Longevity Bonus program, AS 47.45.
This program was last funded in 2002. Also makes
conforming changes in other statutes that reference
the longevity bonus.
Co-Chair Olson queried the effect on the senior elders who
received the benefit in the past.
Mr. Alper replied that there was some history on the bill,
and the legislature has not funded it for many years. There
was zero practical implication.
2:30:38 PM
SENATOR SCOTT KAWASAKI, SPONSOR, gave an overview of the
bill.
Co-Chair Olson asked about the changes in the committee
substitute.
Senator Kawasaki replied that the changes were appropriate.
2:32:43 PM
SENATOR SHELLEY HUGHES, SPONSOR, explained some history of
the bill.
Co-Chair Olson WITHDREW his OBJECTION.
Co-Chair Olson OPENED public testimony.
2:34:59 PM
LESLEY THOMPSON, SELF, JUNEAU, spoke in support of the
bill.
Co-Chair Olson CLOSED public testimony.
Senator Wilson MOVED to REPORT SB 170 out of committee with
individual recommendations and attached fiscal note. There
being NO OBJECTION it was so ordered.
CSSB 170 was REPORTED OUT of committee with six "do pass"
recommendations, and with one new fiscal note from the
Department of Health.
Co-Chair Olson acknowledged SENATOR CATHY GIESSEL.
ADJOURNMENT
2:40:10 PM
The meeting was adjourned at 2:40 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 125 CS in SFin summary of changes 2-8-24 KA.pdf |
SFIN 2/8/2024 1:30:00 PM |
SB 125 |
| SB 125 work draft version B.pdf |
SFIN 2/8/2024 1:30:00 PM |
SB 125 |
| SB 125 SFIN AHFC SB125 Presentation.pdf |
SFIN 2/8/2024 1:30:00 PM |
SB 125 |
| SB170 CS in SFin summary of changes 2-8-24 KA.pdf |
SFIN 2/8/2024 1:30:00 PM |
SB 170 |
| SB 170 work draft version S.pdf |
SFIN 2/8/2024 1:30:00 PM |
SB 170 |