Legislature(2021 - 2022)ADAMS 519
05/09/2022 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| SB243 | |
| HB170 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | SB 243 | TELECONFERENCED | |
| + | HB 5 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 170 | TELECONFERENCED | |
HOUSE BILL NO. 170
"An Act establishing the Alaska energy independence
program and the Alaska energy independence fund in the
Alaska Industrial Development and Export Authority;
and providing for an effective date."
2:29:12 PM
Co-Chair Merrick indicated that the meeting marked the
fifth hearing on HB 170. She announced that there was a new
Fund Capitalization fiscal note. She explained that there
had been an initial $10 million Fund Capitalization fiscal
note by the administration (FN2 (Fund Cap). The amount had
been increased to $30 million by the House Labor and
Commerce Committee (HLC). The new fiscal note was for $20
million as a compromise between the two prior amounts.
Representative Wool applauded the effort to meet in the
middle between $10 million and $30 million. He thought an
increase was good. He supported the fiscal note.
Co-Chair Merrick asked for any further discussion on the
fiscal note. The new fiscal note was adopted without
objection.
Representative Edgmon was of two minds on the bill. He
provided his comments about the legislation. He related
that the concept of a green bank appealed to him. He had
concerns that the legislation was not properly vetted, and
the banking community had not fully embraced the idea. He
supported the provisions allowing use of fossil fuels but
felt it was not aligned with the concept of a green bank.
He did not like the terminology "independence" in the bill
and thought that it was misleading. He discerned that
energy independence meant that rural residents were not
burdened under the staggering cost of diesel energy. He did
not believe the bill was an ideal product. He had concerns
about the program housed under the Alaska Industrial
Development and Export Authority (AIDEA) and would prefer
to see it under the Alaska Housing Finance Corporation
(AHFC). He underscored that green bank meant green bank in
other states, but they had to use the term energy
independence in Alaska because it was not politically
palatable. He believed green banks were the wave of the
future. He speculated that the transition away from diesel
in rural Alaska would be a long slow process. He did not
support the bill.
2:33:08 PM
Co-Chair Merrick noted there were representatives from
AIDEA and AEA online.
Representative Wool shared some of Representative Edgmon's
concerns. He countered that something was better than
nothing. He also had concerns about having the program
under AIDEA and suggested that the committee might have
investigated moving it to AHFC. He believed that the 1
megawatt limit was relatively small, and the bill was
targeted for residential and commercial use. He hoped that
it would help residents transition away from diesel use. He
recalled Representative Josephsons amendment to call the
bill the Green Bank bill. He pointed to adopted amendments
that prioritized energy efficiency, renewable, and clean
energy. He believed that the bill was a step in the right
direction.
2:35:44 PM
Representative LeBon shared concerns about the Alaska
banking community buying into the program and wanting to
participate. He asked AIDEA how they imagined the banking
community participating in the program.
MORGAN NEFF, CIO, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT
AUTHORITY, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC
DEVELOPMENT (via teleconference), appreciated the question.
He noted that the program could only survive if the banking
community supported it. He emphasized that there was no way
to circumvent the banking communities participation, since
mobilizing private capital was an essential component of
the bill that could only be accomplished via collaboration.
He was focused on conversations with the banking community.
2:37:19 PM
Representative LeBon referred to credit approval process.
He asked if there was a vision in the approval process that
required a banks participation at a certain dollar amount
or whether theoretically, any amount could be funded by the
green bank. Mr. Neff answered that the idea was to fully
leverage private sector capital to produce the multiplier
effect and offer more attractive financing and programs to
all communities in the state. He delineated that through
the green bank there were many tools that could be offered
to private investors such as credit enhancement, co-
investment, and technical expertise. He maintained that the
program was designed to incentivize and mobilize private
capital to get as much capital out to communities within
the state. Representative LeBon asked if the green bank was
independent in its credit underwriting process from AIDEA
and AEA. Mr. Neff answered that would ultimately be
established by regulation. He envisioned that there would
be a standalone committee and process driven by the private
investors to leverage their capital by the ratio of $7 to
$8 dollars to $1 dollar. Representative LeBon asked who
would write the credit policy for the green bank.
2:39:33 PM
Mr. Neff answered that the policy would be written in
collaboration with the advisory committee. He expected that
the financial institutions would play a large role in the
committee. Representative LeBon encouraged Mr. Neff to
ensure the banking community was at the table when drafting
the credit policy.
Representative Carpenter opined that the bill was not ready
for passage or consideration by the House. He deemed that
there was some risk and some value. He thought there was
enough uncertainty that the committee should do its due
diligence before passing the bill out of committee.
2:40:55 PM
AT EASE
2:41:57 PM
RECONVENED
Representative Carpenter voiced that his biggest concern
was creating a program and setting aside state money
without any idea that the banking community was supportive
of the program. He thought the bill was premature.
Representative Wool guessed that if the program was set up
to attract banks and offer credit enhancement products, he
hoped it would entice lenders and borrowers to take loans
out for energy efficiency or renewable energy. He stated
that if the concept was not attempted the outcome would
remain unknown. He characterized the green bank as offering
risk reduction to the banking community. He recounted that
the other green banks testified to the extremely low
default rate. He recognized the bill was not perfect. He
strongly believed that the bill would help move the needle
away from diesel use and that it was worth a try. He
recounted that the committee included an amendment that $7
million would be set aside to underwrite projects in rural
Alaska.
Representative LeBon stated they had just heard from AIDEA
that it would reach out to the banking community and
collaborate while the program was developing. He deduced
that if the banks had a say in how the credit policy was
written the program could be designed to win the banks on
board and achieve success.
2:45:14 PM
Representative Wool noted that green bank programs had been
done successfully in other states where there was a lot of
banking involvement. He reminded the committee that the
committee removed the potential for large fossil fuel
involvement.
Representative Josephson added that he supported moving the
bill out of committee, but he would not be disappointed if
it did not move forward. He thought that the type of
institution would happen invariably. He did not think AIDEA
was the best place to house the new program. He noted that
the Renewable Energy Program supported the bill, and it had
his great respect, which mattered to him.
2:47:03 PM
Representative Edgmon noted there was $18.5 million in
weatherization funds in the capital budget through federal
funds. He thought it would be interesting to know whether
some of the Infrastructure Investment and Jobs Act (IIJA)
funding could be available for residents without a loan to
repay. He stood behind his earlier comments stating his
skepticism that the program would not do much for rural
Alaska. He opined that some aspects of the bill were
beneficial but restated his reservations regarding the
bill. He reiterated his opposition to the bill.
2:48:50 PM
Co-Chair Foster MOVED to REPORT CSHB 170(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes.
Representative Edgmon OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, LeBon, Ortiz, Rasmussen, Thompson,
Wool, Merrick
OPPOSED: Carpenter, Edgmon, Foster
The MOTION PASSED (7/3).
There being NO OBJECTION, CSHB 170(FIN) was REPORTED out of
committee with one "do pass" recommendation, two "do not
pass" recommendations, four "no recommendation"
recommendations, and three "amend" recommendations and with
one new fiscal impact note by the House Finance Committee
for the Department of Commerce, Community and Economic
Development; one new fiscal impact note by the Department
of Commerce, Community and Economic Development; and one
new fiscal impact note by the House Finance Committee for
Fund Capitalization.
| Document Name | Date/Time | Subjects |
|---|---|---|
| SB 243 AEA Response to Question HFIN 050922.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
| SB 243 Response toQ HFIN PCEAnalysis-LegReq-IncFrom500To750.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
| CSSB 243 Fin sectional.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
| SB 243 Supporting Document - AEA PCE Analysis from 500 to750.pdf |
HFIN 5/9/2022 1:30:00 PM |
SB 243 |
| HB 170 Public Testimony Rec'd by 050922.pdf |
HFIN 5/9/2022 1:30:00 PM |
HB 170 |
| HB 61 Public Testimony Rec'd by 050922.pdf |
HFIN 5/9/2022 1:30:00 PM |
HB 61 |