Legislature(2015 - 2016)BARNES 124
03/20/2015 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| HB123 | |
| HB120 | |
| HB58 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 120 | TELECONFERENCED | |
| + | HB 58 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 123 | TELECONFERENCED | |
HB 58-ELIGIBILITY FOR AK ENERGY EFFIC LOANS
4:42:54 PM
CHAIR OLSON announced that the final order of business would be
HOUSE BILL NO. 58,"An Act making an entity that is exempt from
federal taxation under 26 U.S.C. 501(c)(3) (Internal Revenue
Code) and a federally recognized tribe eligible for a loan from
the Alaska energy efficiency revolving loan fund; and relating
to loans from the Alaska energy efficiency revolving loan fund."
[Before the committee was CSHB 58 (ENE)].
4:42:59 PM
REPRESENTATIVE KREISS-TOMKINS, Alaska State Legislature, stated
the proposed CSHB 58(ENE) relates to the Alaska Energy
Efficiency Revolving Loan Fund (AEERLF) and to the eligibility
of the fund. The intent of the bill was to expand the
eligibility for the revolving loan fund from public entities
such as school districts, municipalities, or universities to
nonprofit entities including churches, soup kitchens, American
Legion halls, chambers of commerce and similar entities.
REPRESENTATIVE KREISS-TOMKINS explained the rationale for this
bill. He explained that the Alaska Energy Efficiency Revolving
Loan Fund (AEERLF) has been significantly under used since its
inception a few years ago. In fact, only one loan application
has been filed, but a fully processed and executed loan has not
yet been issued from the fund. He said that this loan fund has
the authority to bond up to $250 million so significant value
and potential is inherent in the AEERLF. He said his goal was
to ensure that this fund benefits Alaska, Alaskans, and Alaska's
buildings as much as possible. Expanding the AEERLF's
eligibility to institutions that that contribute to Alaska
communities such as nonprofits can fulfill that goal. He said
this is timely and harmonious given the budget climate. Many of
these nonprofit organizations have an operational strategy that
often revolves around capital grants or "free money" when it
comes to making improvements to their physical plant or
buildings, but this era is largely coming to an end since
limited grant funding is available. This bill would create a
viable means for nonprofit entities to become more self-
sufficient and independent in terms of maintaining their
facilities through low-interest loans. He offered his belief
that was the direction the state needs to go to help nonprofits
become more independent and self-sufficient when less grant
money and capital funding is available.
4:45:48 PM
REPRESENTATIVE JOSEPHSON asked for reasons for the
underutilization of the fund.
REPRESENTATIVE KREISS-TOMKINS explained that two years ago he
contacted every municipal government and school district in his
legislative district once he became aware of the Alaska Energy
Efficiency Revolving Loan Fund (AEERLF). Since his district was
rural, he had lots of contacts with school administrators or
city administrators to advise them that this program could be
helpful, especially given the high energy costs in his district.
For example, residents in his district can pay $6 per gallon for
heating oil and $.60 per kilowatt hour for electricity.
However, there was little interest in the program since in the
last two years public entities could reliably turn to the state
for capital grants. Therefore, these entities would not apply
for low interest loans since they could obtain "free money" from
the state.
REPRESENTATIVE KREISS-TOMKINS suggested that public and non-
profit entities will need to become more self-efficient. He
suggested that more entities will look for low-interest loans
since the spigot of state funds "has been turned off." Thus
this bill could be the vehicle to direct attention to the low-
interest loans.
VICE CHAIR HUGHES remarked that the free money not going to be
available, she might expect that more public entities will step
up. She asked how the applications will be prioritized if a big
rush of public entities and nonprofit organizations sought the
low-interest loans.
4:48:16 PM
REPRESENTATIVE KREISS-TOMKINS referred to page 5, lines 10-13 to
proposed Section 7, subsection (k), which was language added by
the previous committee. This provision would create a two-tier
prioritization or preference for applications, for example, if
there was a "gold rush" and every nonprofit and public entities
applied and the Alaska Housing Finance Corporation had too many
applications, subsection (k) would create a priority for public
entities. He said that this language was added in the House
Special Committee on Energy and he fully endorsed the change.
In the event the AHFC did not have enough available capital or
administrative capacity to process the barrage of applications,
the AHFC would give preference and prioritize public
applications over nonprofit applications; however, if funds
remained after public entities were served, the nonprofits would
also be eligible.
4:49:37 PM
VICE CHAIR HUGHES asked whether the sponsor had been approached
by nonprofits or how this bill came about.
REPRESENTATIVE KREISS-TOMKINS answered that this came about in
part since he was schlepping around the district to point out
this great program. He talked to a nonprofit administrator in
Sitka, but like most nonprofits, every $500 was very important.
This organization had a lot of physical assets, many of which
had single pane windows and were built without insulation. The
nonprofit organization expressed an interest in insulating the
buildings since the return on investment is amazing, but the
organization did not have enough access to cash to do so. Thus,
the problem was access to capital. He recalled the Alaska
Energy Efficiency Revolving Loan Fund (AEERLF) had a $250
million balance for this very purpose. He suggested that it
made sense to connect "A" and "B." He researched this issue
further by e-mailing the Foraker Group since it tends to be the
authority on nonprofit administration. He said he discovered
the Foraker Group had been working on a pilot project in
Fairbanks connecting a nonprofit entity to low-interest loans.
He described the aforementioned project that was a partnership
between the Foraker Group, Rasmuson Foundation, Cold Climate
Housing Research Center, and the Denali Commission. This led to
collaborating and drafting the bill.
4:53:12 PM
VICE CHAIR HUGHES opened public testimony on HB 58.
4:53:26 PM
DANIEL POWERS, Coordinator, Fairbanks Nonprofit Retrofit Pilot
Program, Cold Climate Housing Research Center (CCHRC), stated
that he has been the project coordinator for the Fairbanks
Nonprofit Retrofit Pilot Program. He explained that this
project will retrofit 14 buildings for 10 building owners to
assist tribal and nonprofit organizations improve energy
efficiency through energy and facility planning, energy
auditing, scoping and design. Many elements are necessary to
bring an energy efficiency project from an idea through the
lending process, which HB 58 addresses, to completion and
monitoring. He offered his belief that HB 58 was a great step
in direction of helping nonprofits capitalize their own energy
efficiency resources, especially since these nonprofits provide
essential services for some of the most vulnerable populations
in Alaska. He characterized HB 58 as a great idea that can help
reduce the state's historical grants to nonprofits and change
the culture for energy efficiency improvements. This bill could
enable tribal entities and nonprofits an opportunity to reduce
operational costs. He concluded by stating he is a strong
supporter of HB 58.
4:55:48 PM
VICTORIA MOROZOVA, Chair, Alaska Youth for Environmental Action,
Anchorage Chapter, stated that she is a student at Stellar
Secondary School and would like to testify in support of HB 58.
She asked members to consider the importance of energy
efficiency to lower the carbon footprint, but to decrease the
amount of money going to waste [due to a lack of energy
efficiency]. Further, she asked to emphasize the success of
Alaska Energy Efficiency Revolving Loan Fund (AEERLF) and the
benefits the fund could bring to tribal and nonprofit entities.
For example, the faculty at Stellar Secondary School said they
could use the loan fund to invest in more efficient LED
lighting, replace windows with more energy efficient ones, and
could install a better heating system to save money for the
Anchorage School District. She suggested that those funds could
be better used for education, which as a student she believes is
very important. She urged members to please pass HB 58.
4:57:48 PM
CARMELA FLYNN, Member, Alaska Youth for Environmental Action
(AYFEA), stated that she was a sophomore at Hutchinson High
School in Fairbanks. She asked to testify in support of HB 58
since it could upgrade energy systems to many of the buildings
she regularly uses, including her church, library, and hospital.
She suggested that having the loans to upgrade her school could
help them upgrade equipment. She said that the AEERLF loans
also help to raise awareness of the more efficient ways to save
energy, reduce fuel emissions and aid climate change. She urged
members to pass HB 58.
4:58:51 PM
VICE CHAIR HUGHES, after first determining no one wished to
testify, closed public testimony on HB 58.
4:59:10 PM
REPRESENTATIVE TILTON moved to adopt the proposed committee
substitute (CS) for HB 58, labeled 29-LS0254\F, Nauman, 3/10/15,
as the working document. There being no objection, Version F
was before the committee.
4:59:21 PM
REPRESENTATIVE TILTON moved the proposed committee substitute
(CS) for HB 58, Version F, out of committee with individual
recommendations and the accompanying fiscal note. There being
no objection, CSHB 58(L&C) was reported from the House Labor and
Commerce Standing Committee.