Legislature(2023 - 2024)ADAMS 519
05/03/2024 01:30 PM House FINANCE
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| Audio | Topic |
|---|---|
| Start | |
| HB149 | |
| SB187 | |
| HB307 | |
| SB74 || SB75 | |
| HB232 | |
| SB104 | |
| SB118 | |
| HB122 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 187 | TELECONFERENCED | |
| += | HB 307 | TELECONFERENCED | |
| + | SB 118 | TELECONFERENCED | |
| + | HB 177 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| + | SB 74 | TELECONFERENCED | |
| + | SB 75 | TELECONFERENCED | |
| += | HB 232 | TELECONFERENCED | |
| + | SB 104 | TELECONFERENCED | |
| += | HB 149 | TELECONFERENCED | |
HOUSE FINANCE COMMITTEE
May 3, 2024
1:38 p.m.
1:38:47 PM
CALL TO ORDER
Co-Chair Foster called the House Finance Committee meeting
to order at 1:38 p.m.
MEMBERS PRESENT
Representative Bryce Edgmon, Co-Chair
Representative Neal Foster, Co-Chair
Representative DeLena Johnson, Co-Chair
Representative Julie Coulombe
Representative Mike Cronk
Representative Alyse Galvin (via teleconference)
Representative Sara Hannan
Representative Andy Josephson
Representative Dan Ortiz
Representative Will Stapp
Representative Frank Tomaszewski
MEMBERS ABSENT
None
ALSO PRESENT
Glenn Saviers, Deputy Director, Division of Corporations,
Business, and Professional Licensing, Department of
Commerce, Community and Economic Development;
Representative Mike Prax, Sponsor; Michael Partlow,
Analyst, Legislative Finance Division; Lacey Sanders,
Director, Office of Management and Budget, Office of the
Governor; Bernard Aoto, Staff, Representative Will Stapp;
Andrew Jensen, Energy Policy Advisor, Office of the
Governor; Senator David Wilson, Sponsor; Jasmine Martin,
Staff, Senator David Wilson; Sylvan Robb, Director,
Corporations, Business, and Professional Licensing,
Department of Commerce, Community, and Economic
Development; Ryan McKee, Staff, Representative George
Rauscher; Kevin Worley, Chief Finance Officer, Division of
Retirement and Benefits, Department of Administration;
Senator Forrest Dunbar, Sponsor; James Holzenberg, Staff,
Senator Forrest Dunbar; Maggie Humm, Executive Director,
Alaska Legal Services Corporation; Senator Kelly Merrick,
Sponsor; Kerry Crocker, Staff, Senator Kelly Merrick.
PRESENT VIA TELECONFERENCE
Jared Kosin, President and CEO, Alaska Hospital and
Healthcare Association, Anchorage; Julie Sande,
Commissioner, Department of Commerce, Community and
Economic Development; Curtis Thayer, Executive Director,
Alaska Energy Authority; Naomi Johnston, Administrative
Operations Manager, Regulatory Commission of Alaska; Nancy
Lovering, Member, Alaska Speech and Hearing Association,
Anchorage; Susan Adams, Director of State Affairs, American
Speech Language Hearing Association, Maryland; Jeff Rosa,
Compact Administrator, Physical Therapy Compact Commission,
Washington, D.C.
SUMMARY
HB 122 RAILROAD CORP. FINANCING
CSHB 122(FIN) was REPORTED out of committee with
eight "do pass" recommendations and one "amend"
recommendation and with one new zero note from
the Department of Commerce, Community and
Economic Development and one previously published
zero note: FN1 (CED).
HB 149 NURSING: LICENSURE; MULTISTATE COMPACT
HB 149 was HEARD and HELD in committee for
further consideration.
HB 232 DISABLED VETERANS: RETIREMENT BENEFITS
HB 232 was REPORTED out of committee with nine
"do pass" recommendations and with one previously
published indeterminate fiscal note: FN1 (ADM).
HB 307 INTEGRATED TRANSMISSION SYSTEMS
CSHB 307(FIN) was REPORTED out of committee with
five "do pass" recommendations, four "no
recommendation" recommendations, and one "amend"
recommendation and with one previously published
fiscal impact note: FN2 (CED); and one previously
published zero note: FN1 (CED).
CSSB 74(FIN)
PHYSICAL THERAPY LICENSURE COMPACT
CSSB 74(FIN) was HEARD and HELD in committee for
further consideration.
CSSB 75(FIN)
AUD. & SPEECH-LANG INTERSTATE COMPACT
CSSB 75(FIN) was HEARD and HELD in committee for
further consideration.
SB 104 CIVIL LEGAL SERVICES FUND
SB 104 was HEARD and HELD in committee for
further consideration.
CSSB 118(FIN)
CRITICAL NATURAL RESOURCES; REPORTS
CSSB 118(FIN) was HEARD and HELD in committee for
further consideration.
CSSB 187(FIN)am
APPROP: CAP; REAPPROP; SUPP
HCS CSSB 187(FIN) was REPORTED out of committee
with seven "do pass" recommendations and three
"amend" recommendations.
Co-Chair Foster reviewed the meeting agenda.
HOUSE BILL NO. 149
"An Act relating to the licensure of nursing
professionals; relating to a multistate nurse
licensure compact; and providing for an effective
date."
1:41:07 PM
Co-Chair Foster mentioned individuals available to answer
questions on the bill. He moved to invited testimony.
JARED KOSIN, PRESIDENT AND CEO, ALASKA HOSPITAL AND
HEALTHCARE ASSOCIATION, ANCHORAGE (via teleconference),
spoke in strong support of the legislation. He emphasized
that enacting license reciprocity through the multistate
nurse licensure compact would align Alaska with the rest of
the country. He regularly heard stories in Alaska about
nurses who were hired, but ultimately never returned
because they could not wait weeks or months for a license
to begin work. He had plenty of data and statistics on
nursing shortages, licensing delays, and frustration from
the military community about the absence of licensing
reciprocity.
Mr. Kosin asked the committee to consider two questions.
First, how other states and jurisdictions license nurses.
He emphasized that 41 other states used the nurse licensure
compact. Second, was Alaska's licensing process faster,
safer, and more efficient. The answer was no. He
underscored that Alaska's process was slower, it was no
safer, and it required more time and effort from state
employees. He stressed that the bill would not lead to an
exodus of nurses. He stated that the bill would in no way
infringe on Alaska's sovereignty and the Board of Nursing
would continue to have exclusive control over the standard
of practice. Additionally, the bill would in no way
undermine local nurses or wages. He relayed that Alaska
already relied on out of state nurses because schools in
Alaska graduated less than one-quarter of what was needed
to meet demand industry wide. He thanked the committee for
taking up the bill and urged its passage.
1:44:23 PM
Representative Tomaszewski shared that two of his
daughters-in-law were nurses and one worked in Alaska. He
remarked that every nurse he had spoken to was in support
of the legislation. He asked Mr. Kosin if he had heard from
any nurses who were not in favor of the licensing compact.
Mr. Kosin replied in the negative. He stated that all of
the opinion against the compact he had ever heard had been
anecdotal. He stated that the Alaska Hospital and
Healthcare Association (AHHA) was finding overwhelming
support for the bill.
Representative Ortiz observed that there was quite a bit of
interest in the legislation from out of state. He
referenced out of state testimony on the bill earlier in
the day where the caller mentioned that states with a
compact agreement in place had higher vacancy rates than
other states. He asked if Mr. Kosin disagreed and if he had
evidence to the contrary.
Mr. Kosin answered that the number of states with a compact
was 40 to 10, so there was a much larger sample size of the
states with a compact, which meant there was much bigger
chance of having higher vacancy rates. He pointed out that
no one in support of the compact had ever suggested that
somehow it would cure all of the nursing shortages in
Alaska or across the country. He explained that it was
about how fast and efficiently the state could get someone
licensed so they could begin work, especially when it was
necessary to recruit from out of state. He underscored that
approximately 1,400 registered nurses needed to be hired
per year to keep up with growth and meet demand. He noted
that in-state colleges graduated 324 nursing students per
year. He stressed that Alaska was reliant on out of state
workers to help drive down vacancy rates. He would be happy
to collect information on vacancy rates to provide the
details to the committee; however, he believed that
information missed the point of the legislation.
Representative Ortiz noted that Mr. Kosin referenced the
problems with nurses getting licensed in Alaska. He
remarked that particularly during the COVID-19 pandemic
there was a period where it took way too much time for
healthcare workers in general to get licensed in Alaska. He
asked about the current status of licensing nurses in
Alaska. He wondered if there was significant improvement in
the process.
1:49:33 PM
Mr. Kosin responded that there had been improvement when
comparing the present with six months to a year ago.
However, he stated that the current status was not a good
place to be. He stated that Alaska's system was not safer,
faster, or more efficient when compared to almost all other
states. He understood the department [Department of
Commerce, Community and Economic Development] would testify
and would likely say it took anywhere from four weeks or
more to get a license. He stated it was not very fast. He
recognized that while it was better than it had been in the
past, it was still not an acceptable place to be when there
was something widely used across the country that would be
significantly faster.
Representative Hannan stated that one of the concerns she
had heard about the compact had to do with nurses who came
to work in Alaska who may be under disciplinary action or
complaint in another state. First, the compact did not
require the state to keep any kind of registration of
people working in Alaska on a nurse license compact.
Meaning a person could leave another jurisdiction and work
in Alaska while they were under investigation. She asked if
AHHA supported a registration of nurses working in Alaska
under compact licensure that would enable tracking
individuals if a disciplinary action arose.
Mr. Kosin answered affirmatively; however, AHHA did not
believe it was necessary because when a person was under
investigation within a home state it was flagged through
the investigatory process and the individual may even lose
eligibility for a multistate license. He stated that if it
was necessary to make people feel comfortable, AHHA would
absolutely support the concept. He pointed out that the
department would not be able to currently identify where
all of the licensed nurses were in Alaska. He explained
that once a person was licensed, they could go where they
wanted. He elaborated that they could practice telehealth
from out of state, work in a facility in or outside
Anchorage, or not be working at all. He emphasized that the
details were not available at present. He believed there
would be no difference under the compact; however, if a
registry would make people feel more comfortable, AHHA
would have no problem with it.
Representative Hannan explained how she had heard the
situation described as a concern. She explained that when a
person was licensed in a state, the nurse licensure fees
paid for the investigation. She furthered that a nurse in
Alaska would have to support the investigation costs of a
nurse using a multistate compact license to work in Alaska.
She elaborated that currently, if there was an
investigation of a nurse with an Alaska license, the
department was notified, and it would be reflected in the
licensure fees for the rest of the nurses. She was trying
to construct a way to keep Alaska nurses working in Alaska
from being responsible for paying for investigations of
nurses who came to work in Alaska under a multistate
licensure. She had heard the concern from nurses who pay
the licensure fees.
Mr. Kosin deferred the question to the department. The
department had thought the issue through and had figured
out how it would structure a fee schedule so that
investigations tied to a multistate license would not
impact licensing fees for Alaska nurses. He relayed that if
licensing fees increased, there were other financial ways
to cover the situation, including assessments, even on
AHHA. He stated that AHHA had zero concern about doing
something so mainstream like the compact. The agency
believed once it was in place, everyone would see there was
no downside. He noted that if problems arose, it was
something that could be addressed in the future. He assured
the committee that the department had thought about the fee
issue and could speak to it.
Co-Chair Foster asked to hear from the Department of
Commerce, Community and Economic Development (DCCED).
1:54:45 PM
GLENN SAVIERS, DEPUTY DIRECTOR, DIVISION OF CORPORATIONS,
BUSINESS, AND PROFESSIONAL LICENSING, DEPARTMENT OF
COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, pointed to a
fee provision in Section 2 of the bill that would separate
fees for single state licenses versus multistate licenses.
She explained that while it would be Alaska multistate
license holders paying the fees, the department would
ensure that individuals who only wanted an Alaska license
had the opportunity to only pay for Alaska licensees. As
long as a registry did not create too much work for the
hospitals and department, the department was happy to
implement one. The department did not know if or where
Alaska's nurses were currently working. She relayed that no
other states had seen an increase in investigation costs as
a result of joining the compact. She informed the committee
that DCCED did not know whether a nurse applying in Alaska
was under investigation unless it had been reported to the
national registry; if it had been reported, DCCED would see
it under the compact license in the same way it did for a
single license.
Representative Hannan referenced Mr. Kosin's mentioning of
license delays for military spouses. She believed he had
been one of the advocates for changing the law in 2020 or
2021. She was concerned or alarmed to hear that the law had
been changed to "scoop in" and create a carve out for
military spouses, but that it had not impacted the number
of spouses working as nurses in Alaska while they were in
the state for a short time. She asked if she had understood
Mr. Kosin's statements correctly.
Mr. Kosin answered that she understood him correctly. He
relayed that all of his points thus far had come directly
from groups that were affected. He stated that the
Department of Defense could easily come on record to
support the statements. He explained that the catchment
area of the compact was so large (41 states and
jurisdictions) that if a military spouse with a compact
license came to Alaska, they were still put into an Alaska
license situation. The state was not allowing individuals
to freely use their compact license. He shared that AHHA
was hearing from military spouses that they had a compact
license and the mobility to begin work immediately, but it
was still not allowed despite Alaska changing its law a
couple of years back. He relayed that the bill was about
adopting what was used everywhere else. He believed the law
passed a few years ago helped, but it did not solve the
issue.
1:58:26 PM
Representative Josephson referenced Mr. Kosin's testimony
that he had not heard from any nurses who oppose the
compact. He asked if Mr. Kosin had met with the Alaska
Nurses Association.
Mr. Kosin answered that AHHA worked directly with the
Alaska Nurses Association for almost two years to try to
find ways to improve the licensing system in a way that
would be faster and more efficient to see if there was a
solution to the problem outside the compact. Despite
working together for close to a year they could never see
eye to eye on the issue. He knew that the Alaska Nurses
Association opposed the compact. He relayed that AHHA was a
trade association representing all of its members, whereas
the nurses association was a union. The AHHA talked to
Alaska Nurses Association members and nurses on a day to
day basis and he had not heard what was reflected from
their leadership down below. He confirmed that he had met
and knew nurses who opposed the compact, but on a day to
day basis the nurses he worked with and met in hospital
hallways did not oppose the compact. He stated it was
substantiated by all of the surveys that had been
conducted.
Representative Josephson understood that there were many
important issues to nurses, but he surmised the one at hand
had to be at the top of the list. He observed that they had
elected leaders who opposed the compact. He asked for
verification that someone was electing them.
Mr. Kosin deferred to the nurses association on how its
members were elected. He noted that the legislature was
hearing a lot of different information from different
perspectives. He emphasized that from the beginning, AHHA
had relied on facts and all of the information he had
provided was statistically backed up through some source.
He considered how people were elected and how people were
making decisions he believed there had been a lot of
misinformation and stated that misinformation could
compel people to act in different ways. He agreed that
people were elected, and he did not know whether the
compact was a platform for election. He emphasized that the
facts and information showed it was what the rest of the
country did, the vast number of nurses supported it, and
there was no reason not to join the compact.
Representative Josephson countered that the committee had
heard a number of reasons [to not join the compact]. He
thought it sounded like people were perhaps merely talking
past one another.
2:01:58 PM
JULIE SANDE, COMMISSIONER, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT (via teleconference),
shared that the department had heard overwhelming support
for the bill. She noted that DCCED had requested that
supporters primarily provide written comments out of
respect for the committee's time. She appreciated the
opportunity to call in and speak in favor of the
legislation. She shared that she held a master's degree in
health administration and served over 20 years at the
Ketchikan Pioneer Home and had retired as the director. She
detailed that the pioneer home employed nurses and
certified nurse aides to provide care to residents around
the clock. She had also served on the Ketchikan general
hospital medical center for over 12 years on the governing
board. She relayed that when DCCED was posed with
questions, it considered how it could protect Alaska
consumers and how to promote a strong community and
economy. She did not believe it was possible to have strong
and healthy communities without quality healthcare. She
strongly supported the bill for those reasons.
Commissioner Sande addressed license processing times and
improvements. She discussed that when she had been
considered for her current role, legislators were unified
in the need to improve licensing times for Alaskans. Her
commitment to the legislature at the time was that she
needed time to meet with the DCCED team to determine where
the largest challenges were and where the bottlenecks were
located. She noted that many legislators had communicated
their commitment to provide support wherever possible.
She was very proud of the DCCED team and of all the
improvements the department had put into place. She
reported that the licensing process had gone from 14 weeks
to 4 weeks. She noted that 4 weeks was not ideal, but it
was a tremendous improvement. She highlighted that the
department was receiving a couple hundred fewer nurse
license applications each month, which was extremely
concerning. The department was very concerned it would
continue to see a downward trend in the nurse license
applications as Alaska became less appealing for nurses who
could work in 41 other jurisdictions without applying for
and renewing an additional license.
Commissioner Sande highlighted nurse vacancies and stated
it was necessary to make it easier for nurses to come check
out Alaska and realize it was where they wanted to be,
while ensuring Alaskans had access to needed care. She
viewed it as a quality healthcare issue as opposed to a
licensing issue. She referenced public testimony heard by
the committee earlier in the day. She cited testimony that
if the state joined the compact it would lose the ability
to discipline nurses working in Alaska on a multistate
license. She underscored it was incorrect and clarified
that the Board of Nursing and DCCED would not support the
legislation if it were the case. She relayed that the Board
of Nursing would retain full jurisdictional authority over
every nurse treating patients in Alaska regardless of what
state issued their license. The state could investigate any
nurse practicing in Alaska and take action against their
privilege to practice in Alaska, including prohibiting them
from working in the state if the violation was severe.
Commissioner Sande referenced public testimony statements
about state sovereignty. She relayed that the Alaska
Legislature and the Board of Nursing would retain full
authority over the nurse practices laws in Alaska. The
compact and its commission had no authority over state
practice laws. She referred to earlier statements that
nurse license fees would increase under the compact. The
department expected the opposite would be true. She
elaborated that joining the compact would result in fewer
applications, which meant part of the DCCED team currently
working on nurse licensing could help other programs
including medical licensing. She explained that fees were
set based on regulatory costs of running the program;
therefore, if less staff was needed to process the
applications, fees would likely decrease. Currently, the
nurse licensing team was more than double the size of any
other licensing team within the division. She explained
that if the team had fewer nurse licenses to process, it
would mean more staff available to process other licenses
(e.g., contractor licenses) in a timelier manner.
Commissioner Sande addressed testimony that compact states
had higher nurse vacancy rates compared to non-compact
states. The department had been unable to locate data
mentioned by the testifier. She noted the only data DCCED
had found on healthdata.gov was specific to California. The
department would be interested to see the data if it was
sent to the committee. The department found other data from
the U.S. Chamber of Commerce showing otherwise. She relayed
that on January 29, 2024, the U.S. Chamber of Commerce
published a data deep dive on the national nursing crisis.
[Note: due to poor teleconferencing connection some of
Commissioner Sande's testimony is inaudible].
Co-Chair Foster noted that Commissioner Sande's phone
connection was breaking up.
2:08:59 PM
Commissioner Sande concluded her remarks by providing her
support for the bill.
Co-Chair Foster noted others available.
2:09:47 PM
Representative Josephson referenced an appeal to licensed
nurses that went out four days earlier. He remarked it had
been an administration practice in the past to use its
email databases to rally people to a cause. He asked if
there was an administration policy or if it was typical
protocol.
Commissioner Sande replied it was not an administration
call. She believed Representative Josephson was referring
to an email from Patty Wolfe, the executive administrator
for the Board of Nursing, representing the board and
administration, both of which fully supported and saw a
strong need for the compact. She relayed that the email was
sent at the direction of the board and division management.
She relayed that the communication on April 30, was only
sent to individuals who opted to receive communication from
the Board of Nursing.
Representative Ortiz remarked that he and Commissioner
Sande were from the same community, and he was very
familiar with the good work she had done prior to beginning
as the commissioner. He had heard of the Ketchikan city
council's support for the nursing compact. He was aware
that there was support in the community for joining the
compact. He was also aware that there was opposition from
nurses to joining the compact. He noted that Mr. Kosin had
testified there was no downside to joining the compact. He
asked if the commissioner saw any downsides to joining the
compact.
Commissioner Sande responded that she did not anticipate
the compact would be a silver bullet and she did not think
there was just one fix for the nursing shortage; however,
she viewed the compact as a necessary tool. She thought a
downside would be choosing not to take action and not
moving forward with the compact that so many other states
had chosen to join. She believed adopting the nurse
licensure compact was the responsible choice based on the
current nurse shortage and fear that it would only worsen.
She thought the state was at risk and by not joining the
compact, it limited Alaska's ability to access nurses that
other states had access to. She stated that hindsight was
20/20 and the state may look back four years from now and
see that there were unintended consequences. She stated
there was always an opportunity to revise something if that
occurred and the department was open to it. She believed
based on the information, the state should participate in
the compact and she was fully in support.
2:14:28 PM
Representative Ortiz asked about the compact and its
potential for undermining wages and benefits for local
nurses. He asked if Commissioner Sande saw it as a threat.
Commissioner Sande understood that some of the opposition
to the bill had come from the union out of wanting to
protect the wages of its membership. However, when she had
spoken to nurses in various communities, the nurses were
not expressing concern about their wages, but they were
expressing concern about mandatory overtime. She stated
there was a far greater concern about the quality of
outcomes when nurses were tired. Additionally, there were
nurses seeking other professions because they did not want
to miss birthdays, Christmases, and time with their
families due to a lack of relief. She had a conversation
with a hospital administrator and nurse the previous week
who was fully in support of the bill.
Co-Chair Foster asked the sponsor for any concluding
remarks.
REPRESENTATIVE MIKE PRAX, SPONSOR, thanked the committee
for hearing the bill. He highlighted that the number of
nurse license applications had declined significantly since
the end of the COVID-19 pandemic, when one would expect the
opposite to be true. There did not seem to be a good reason
for the decline in number of licenses except that it was
easier to go to work somewhere else. He noted it was not
constrained by wages or anything else. He stated it was a
fairly urgent problem and time to see some relaxation in
bureaucracy to see if it would help address the issue and
stem the recruitment problems occurring in the state.
Co-Chair Foster thanked the testifiers. He noted the bill
would be heard on the following Monday.
HB 149 was HEARD and HELD in committee for further
consideration.
Co-Chair Foster handed Co-Chair Edgmon the gavel.
2:18:08 PM
AT EASE
2:29:37 PM
RECONVENED
CS FOR SENATE BILL NO. 187(FIN) am
"An Act making appropriations, including capital
appropriations, supplemental appropriations, and other
appropriations; making reappropriations; making
appropriations to capitalize funds; amending
appropriations; and providing for an effective date."
2:30:14 PM
Co-Chair Edgmon relayed that the committee would consider
amendments to the capital budget and would at some point
move it out. He relayed that the capital budget was a
product of an agreement between the House and Senate in
terms of timeline, process, and funding amounts. The
current budget achieved the parameters of work with the
other body. The amendment deadline had been 10:00 a.m. that
morning.
2:31:18 PM
Co-Chair Edgmon began the amendment process noting that
Amendment 1 was his amendment. He asked for a motion to
move it.
Co-Chair Johnson MOVED to ADOPT Amendment 1 (copy on file):
DEPARTMENT: University of Alaska
PROGRAM: University of Alaska Fairbanks
PROJECT TITLE: Alaska Railbelt Carbon Capture &
Sequestration Project
DELETE: $2,200,000 UGF, 1004
ADD: $2,200,000 UGF/Match, 1003
$8,880,00 Fed Receipts, 1002
EXPLANATION: This is a technical fix. The federal
receipts for this project were inadvertently omitted.
This amendment restores the federal match and
correctly classifies the $2.2 million in UGF as match.
Representative Stapp OBJECTED for discussion.
Co-Chair Edgmon explained the amendment that was a
technical fix related to the University of Alaska
Fairbanks tied to the Alaska Railbelt Carbon Capture and
Sequestration Project. The original budget contained $2.2
million in unrestricted general funds (UGF). In order to
properly account for the entire package of funding, which
was state and federal in nature, it was necessary to delete
the increment and add $2.2 million in UGF matching funds
that would allow the inclusion of $8.8 million in federal
receipt authority for a total of $11.1 million.
Representative Stapp WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 1 was ADOPTED.
2:32:50 PM
Representative Josephson MOVED to ADOPT Amendment 2 (copy
on file):
DEPARTMENT: University of Alaska Unassigned
PROGRAM: University of Alaska Fairbanks
PROJECT TITLE: Alaska Railbelt Carbon Capture &
Sequestration Project
DELETE: $1,000,000 UGF, I 004
DEPARTMENT: Department of Transportation
PROGRAM: Federal Program Match
PROJECT TITLE: Match Assistance for Local Transit
Providers
ADD: $1,000,000 UGF, 1004
EXPLANATION: This is an Alaska Mobility Coalition
priority. Transit Match Funding would be used to
support small community and non-profit efforts to draw
down federal infrastructure funds for transportation
assistance.
Representative Stapp OBJECTED.
Representative Josephson explained that due to the passage
of Amendment 1, the fund source on Amendment 2 should be
1003. The fund source was UGF match, and it would divert
some of the carbon capture sequestration project funding.
The amendment pertained to $1 million in transit match
funding for the Alaska Mobility Coalition. He read a
selection on the Alaska Mobility Coalition:
Prior to FY 18 the state put in general fund capital
dollars to help transit providers with their local
match requirements for various federal transit program
grants for operational support and capital equipment
and facility purchases. This grant program existed for
more than a decade and varied from half a million to
$1.5 million. This state investment helped leverage
more than three times as much in federal funds. During
the COVID epidemic the federal government provided
considerable extra funding, much of which did not
require a match but that has changed. Now more than
ever before, the federal government is making huge
investments to community and public transit systems
nationwide and Alaska can access these federal funds
if they can come up with a local match. Applicants
must provide matching funds in the amount of 10, 20,
and sometimes 50 percent depending on the program. To
ensure that our local transit providers can access all
the new federal funding for community transportation,
the legislature should provide $1 million to transit
sub-recipients to help meet local match requirements.
Representative Josephson highlighted letters of support
from Patrick Reinhart, the Governor's Council on
Disabilities and Special Education, and the Alaska Mobility
Coalition. He listed some of the entities that would
benefit including the City of Bethel, Glacier Valley
Transit, City and Borough of Juneau, Ketchikan Gateway
Borough, Senior Citizens of Kodiak, Sunshine Transit, and
Valley Transit. He stated it seemed like something the
legislature funded through the operating budget, but it was
a capital amendment. He respected the agreement on the
capital budget that had been reached between the bodies,
but he was not a party to it. He understood the Senate had
left $113 million in the FY 24 budget, which would lapse
into the Constitutional Budget Reserve (CBR). He stated
there were ways to fund the item. He asked for members'
support.
2:36:41 PM
Representative Stapp opposed the amendment. He stated the
amendment deleted the general fund match for the previous
amendment, which would create hollow receipt authority for
the federal fund match available for the University of
Alaska. He stated that no aspect of the amendment created
the fund source to leverage the federal match; therefore,
it would jeopardize the match for the carbon sequestration
project.
Co-Chair Edgmon noted that the Office of Management and
Budget (OMB) director, Legislative Finance Division (LFD)
staff, and University staff, were all available for
questions.
Representative Tomaszewski asked if it was the amendment
sponsor's intention to have the program for the University
deleted. He asked if the sponsor was aiming to kill the
project.
Representative Josephson replied that the amendment would
kill less than half of the project. It was his
understanding that the other body was not funding the item.
The amendment would be an adjustment to the program.
2:38:31 PM
AT EASE
2:39:13 PM
RECONVENED
Representative Josephson stated that because of the concern
about the carbon capture and sequestration project he asked
that the funding be spent as UGF as written in the original
amendment.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Hannan
OPPOSED: Stapp, Tomaszewski, Cronk, Coulombe, Johnson,
Foster, Edgmon
Representative Galvin was absent from the vote.
The MOTION to adopt Amendment 2 FAILED (3/7).
Representative Josephson MOVED to ADOPT Amendment 3 (copy
on file):
DEPARTMENT: University of Alaska Unassigned
PROGRAM: University of Alaska Fairbanks
PROJECT TITLE: Alaska Railbelt Carbon Capture &
Sequestration Project
DELETE: $150,000 UGF, 1004
DEPARTMENT: Commerce, Community and Economic
Development
PROGRAM: Grants to Named Recipients (AS 37.05.316)
PROJECT TITLE: Build Alaska's Future - GIS Mapping &
Engagement Project
ADD: $150,000 UGF, 1004
EXPLANATION: Project funding for permanent
improvements to GIS mapping of Federal infrastructure
funding across Alaska.
Representative Stapp OBJECTED.
2:41:22 PM
AT EASE
2:41:59 PM
RECONVENED
Representative Josephson asked members to delete the part
of the amendment referring to department, program, and
project title. The amendment request would use UGF and the
program was Build Alaska's Future Education Fund GIS
Mapping and Engagement Project. The program was a
transformative initiative, leveraging cutting edge
geographic information systems (GIS) technology to
illuminate the scope and impact of state and federal
infrastructure funding across Alaska. The project was
seeking $150,000 to expand the breadth and depth of the key
initiatives to deliver unique insights and educate the
public. He noted it was a CAPSIS [Capital Projects
Submission and Information System] item. He understood
there were many CAPSIS items that did not necessarily make
it into the budget. He entered the item as a request for an
Alaskan earlier in the year and he asked for members'
support.
Co-Chair Edgmon stated that a good part of the capital
budget was built around infrastructure. The budget included
$1.25 million for a navigator program for the Alaska
Municipal League, $1.5 million for the Alaska Federation of
Natives, $7 million in matching funds for the Denali
Commission, $895 million in federal funding for the
Statewide Transportation Improvement Program (STIP)
program, and myriad projects from around the state. He
thought the project in the amendment was good, but it was
not possible to include every project in the budget. He
felt satisfied with the amount of infrastructure, school
maintenance, and energy projects included in the budget. He
remarked that the $150,000 was not included in the
agreement with the other body. He stated that some projects
would not be included as worthy as they may be and there
was a likelihood they may be seen the following year. He
recognized the meritorious content of the amendment but
could not support it.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Hannan, Josephson
OPPOSED: Stapp, Representative Coulombe, Tomaszewski,
Cronk, Johnson, Foster, Edgmon
Representative Galvin was absent from the vote.
The MOTION to adopt Amendment 3 FAILED (3/7).
2:45:29 PM
Representative Josephson MOVED to ADOPT Amendment 4 (copy
on file):
DEPARTMENT: University of Alaska Unassigned
PROGRAM: University of Alaska Fairbanks
PROJECT TITLE: Alaska Railbelt Carbon Capture &
Sequestration Project
DELETE: $160,000 UGF, 1004
DEPARTMENT: Commerce, Community and Economic
Development
PROGRAM: Grants to Named Recipients (AS 37.05.316)
PROJECT TITLE: Build Alaska's Future - Alaska Native
Workforce Development Workshops (ANWDW), a Rural-Urban
Exchange Pilot Project
ADD: $160,000 UGF, 1004
EXPLANATION: Pilot program to address workforce needs
in rural areas and Alaska Native communities.
Representative Stapp OBJECTED.
Representative Josephson explained the amendment. He noted
that the project title would not relate to carbon capture
and sequestration. The amendment would provide funding to
the Alaska Native Workforce Development Workshops. He
detailed that the pilot project aimed to bridge the
rural/urban gap by convening stakeholders to address
pressing training and workforce needs specifically focusing
on rural and Alaska Native communities. The workshops were
a necessary step towards bridging the divide in workforce
development opportunities for rural Alaska. The program
comprised a statewide virtual workshop and three in person
sessions in Akiak, Eagle, and Klawock. The program would
convene Alaska Native leaders, workforce development
organizations, and labor and state local officials to build
partnerships and create comprehensive training programs for
rural Alaska workers. He asked for members' support.
Co-Chair Edgmon stated that he was sure there was a lot of
value in the program. He remarked that being from rural
Alaska he was familiar with vocational tech centers in
Kotzebue, King Salmon, Bethel, and possibly in Nome. He
noted that significant recruitment had taken place with
regional Native corporations pertaining to construction on
the North Slope. Given the budget constraints he could not
support the amendment.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Hannan
OPPOSED: Coulombe, Stapp, Tomaszewski, Cronk, Foster,
Johnson, Edgmon
Representative Galvin was absent from the vote.
The MOTION to adopt Amendment 4 FAILED (3/7).
2:48:07 PM
Representative Josephson WITHDREW Amendment 5 (copy on
file).
2:48:21 PM
Representative Josephson MOVED to ADOPT Amendment 6 (copy
on file):
DEPARTMENT: University of Alaska Unassigned
PROGRAM: University of Alaska Fairbanks
PROJECT TITLE: Alaska Railbelt Carbon Capture &
Sequestration Project
DELETE: $90,000 UGF, 1004
DEPARTMENT: Commerce, Community and Economic
Development
PROGRAM: Grants to Named Recipients (AS 37.05.316)
PROJECT TITLE: Alaska Native Arts Foundation-Alaska
Native Artist Directory
ADD: $90,000 UGF, 1004
EXPLANATION: Creates directory to boost visibility and
market access of Alaska Native artists from remote
areas.
Representative Stapp OBJECTED.
Representative Josephson relayed that a longtime Alaskan
from Ketchikan and Anchorage had recommended the project.
The amendment was not associated with the Alaska Railbelt
Carbon Capture and Sequestration Project as a fund source.
The funding would create a directory to boost visibility
and market access of Alaska Native artists from remote
areas. The directory was designed to give Alaska Native
artists from remote communities with historically
insufficient online resources, centralized access to art
markets. By the development of a platform collaboratively
designed with artist feedback, indigenous artists from
across geographic isolated regions could achieve higher
visibility and facilitate connection between organizations,
regions, other artists, and new patrons throughout the
state, making Alaska Native artwork more broadly available.
He asked for members' support.
2:49:33 PM
AT EASE
2:49:47 PM
RECONVENED
Co-Chair Edgmon was aware of the effort and a number of
regional efforts to involve the boosting of Native artists.
He elaborated that much of the arts and crafts culminated
at the Alaska Federation of Natives (AFN) fair in the fall.
He relayed that the regional corporation in Bristol Bay had
an online marketing effort that did something similar to
what the amendment proposed. He believed there were others
around the state as well. Due to budget constraints, he
would oppose the amendment.
Representative Cronk agreed with the statements made by Co-
Chair Edgmon. He remarked that Native artists increasingly
had their own websites. He did not think the amendment was
needed. He believed that with the boost of broadband in
rural Alaska in the coming years it would be a great avenue
for artists to sell their work.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Hannan, Foster
OPPOSED: Stapp, Tomaszewski, Cronk, Coulombe, Johnson,
Edgmon
Representative Galvin was absent from the vote.
The MOTION to adopt Amendment 6 FAILED (4/6).
2:51:33 PM
Representative Josephson MOVED to ADOPT Amendment 7 (copy
on file):
DEPARTMENT: Commerce, Community and Economic
Development
PROGRAM: Unassigned
PROJECT TITLE: Alaska Energy Authority - Round 16
Renewable Energy Project Grants (AS 42.45.045)
ADD: $5,000,000 UGF, 1004
EXPLANATION: This would add additional funding for
this program.
Representative Stapp OBJECTED.
Representative Josephson relayed that for several members
of his caucus and broadly speaking, there was interest in
increasing the Renewable Energy Fund (REF). He recognized
that Co-Chair Edgmon and his caucus found generous ways to
fund the REF beyond the administration's request. The
amendment would add another $5 million UGF. He understood
that the other body reduced the waterfall because
circumstances changed (there were fiscal notes and new
contracts) and the amount intended to send to the CBR one
year back had shrunk by about $30 million. He noted that
during conference committee [to be held at the end of
session] the argument could presumably be made that all of
that $113 million did not need to go to the CBR. The
amendment would expand the Renewable Energy Fund portfolio
to include Goat Lake Hydro in Skagway, Nuvista Kwethluk,
Quinhagak Battery Energy Storage, Nenana biomass heat
system, Kongiganak 100 kilowatt solar energy project, and
the Railbelt wind diversification project. He asked for
members' support.
Co-Chair Edgmon appreciated acknowledgement that the
current budget proposal increased the REF funding by almost
$11 million and provided for the addition of eight
projects. In a perfect world, he would like to fund every
project on the list, which would increase the amount from
$14 million to $32 million. He stated that, unfortunately,
the opportunity was not available. He relayed that the
previous year the legislature had funded $15 million and
made the REF program permanent with legislation supported
by the entire committee. He had spoken with the Alaska
Energy Authority (AEA) director Curtis Thayer several days
back and Mr. Thayer had talked about the inception of the
program in 2008. Over $300 million had gone into the
program over time and it was more than just seed money for
a bunch of projects that never reach fruition. There were a
number of major renewable energy projects around the state
that started out by being included on the REF project list.
Unfortunately, there were budget limitations and the
current budget included almost $15 million, which was on
par with the previous year. Due to budget constraints, he
would have to oppose the amendment.
Representative Hannan stated that the actions of
Representative Josephson were supported by the entire
minority caucus. She remarked there had been reference to a
deal that had been cut between the majority caucuses in
both bodies; however, no one in the House minority was
allowed to have district projects and they had not received
any say on the included projects. She highlighted that none
of the projects on the list in the amendment were located
in her district; however, it was something as a caucus they
could support. She stated that investing more in renewable
energy was something the minority caucus supported
universally as being good for Alaska.
2:56:44 PM
Co-Chair Edgmon politely rebutted the comments by stating
that the capital budget did get a number of House district
priorities funded while it was in the other body. There
were some Juneau projects in the budget including one for
the University. He agreed that individual projects for the
minority and the majority did not get funded in the budget.
He relayed that they did best they could. He characterized
it as imperfectly perfect or perfectly imperfect.
Representative Stapp supported the work done by Co-Chair
Edgmon on the capital budget. He addressed the discussion
on people's individual projects not being included. He
assured the committee that the Senate majority took care of
the House minority very well. He remarked that his senator
was in the Senate majority and every one of the capital
projects included were not in his own district but were
located in the downtown [Fairbanks] district.
2:58:24 PM
Co-Chair Johnson appreciated the work done by Co-Chair
Edgmon and the work done to make sure everyone was as
fairly treated as possible.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Hannan, Josephson
OPPOSED: Stapp, Tomaszewski, Cronk, Coulombe, Johnson,
Foster, Edgmon
Representative Galvin was absent from the vote.
The MOTION to Adopt Amendment 7 FAILED (3/7).
2:59:43 PM
Representative Josephson WITHDREW Amendment 8 (copy on
file).
3:00:01 PM
AT EASE
3:00:27 PM
RECONVENED
Representative Josephson WITHDREW Amendments 9 and 10 (copy
on file).
Representative Josephson MOVED to ADOPT Amendment 11 (copy
on file):
DEPARTMENT: Revenue
PROGRAM: Unassigned
PROJECT TITLE: Dividend Application Information System
Replacement Phase I
DELETE: $3,500,000 UGF, 1004
DEPARTMENT: Commerce, Community and Economic
Development
PROGRAM: Grants to Municipalities (AS 37.05.315)
PROJECT TITLE: Anchorage- Tanaina Hills Water
Distribution Installation
ADD: $3,500,000 UGF, 1004
EXPLANATION:
North Link Aviation plans to create a parking and fuel
depot for jumbo jets south of the Ted Stevens
International Airport. Many residents living near the
potential South Airpark Cargo Improvement project use
well water. Residents are already experiencing PFAS
contamination. They worry of additional PFAS
contamination from the project, and request that the
city water service be extended to the area.
Representative Josephson explained that he had lived in
many communities in Alaska and twice in rural Alaska and he
had an Alaska-wide spectrum. He considered himself to be
another rural Alaska vote if asked. He explained that the
amendment pertained to a project that was not in his
district; it was located close to the airport in Anchorage
and just south of Raspberry Road. He explained that the
Tanaina Hills subdivision included about 24 homes, all on
well water. The homeowners had protested adamantly with no
success over the creation of the south airpark cargo
improvement project located on the south part of the
airport campus. The homeowners were opposed to the project
because it would create air issues and because the
subdivision already suffered from PFAS inundated well water
related to fire suppression work. He believed the project
was located in Representative Tom McKay's district and
Senator Matt Claman's district. He requested to ask LFD
about the Dividend Application Information System
Replacement fund source in the amendment.
MICHAEL PARTLOW, ANALYST, LEGISLATIVE FINANCE DIVISION,
introduced himself.
Representative Josephson asked Mr. Partlow what he knew
about the Dividend Application Information System
Replacement and whether it needed the $7.5 million in the
budget.
Co-Chair Edgmon remarked that the specific budget request
addressed by Amendment 11 had come to the House very late;
he believed it had come to the Senate Finance Committee co-
chairs right as they were sending the budget over. He
stated that the Dividend Application Information System
Replacement totaled about $7.5 million and the House and
Senate agreed that each would put in $3.75 million for each
component. He thought perhaps the OMB director would be
appropriate to answer the question.
Mr. Partlow answered that the budget included $7.5 million
for the project and Amendment 11 would reduce the funding
by $3.5 million. He deferred to the OMB director for more
details on the project.
LACEY SANDERS, DIRECTOR, OFFICE OF MANAGEMENT AND BUDGET,
OFFICE OF THE GOVERNOR, relayed that the Dividend
Application Information System Replacement was a new
project for the Department of Revenue (DOR). The funding
was for the first of what the administration was hoping
would be two phases of requests to come to the legislature.
She explained that DOR was working on issuing a request for
proposal (RFP) for a contract to start the work on the
development of the new system. There were concerns about
automation and security with the current system and the new
system would replace it. The $7.5 million would enable DOR
to start on the design and issue a contract for the work.
Representative Josephson asked if the project had received
an appropriation before.
Ms. Sanders replied in the negative. She clarified that the
system would be brand new.
Representative Josephson asked about the minimum amount
needed in the coming fiscal year for the project.
Ms. Sanders replied that OMB believed it would cost $7.5
million to get started on design work with a contractor.
The total project cost would not be known until the
contract was issued. She estimated it could be $15 million
to $20 million total.
Representative Josephson asked about the level of
confidence the funds would be needed in the coming fiscal
year.
Ms. Sanders responded that she was very confident DOR
needed the funding to be able to get started with a
contractor.
Representative Josephson asked if it was appropriate for
LFD to offer an opinion.
Co-Chair Edgmon noted there were questions from other
committee members.
Representative Cronk stated the committee could "literally
do this to every single item in the budget." He thought
asking whether budget items were needed was opening a can
of worms. He stated the committee could spend weeks asking
for opinions. He did not believe it was appropriate.
Co-Chair Edgmon agreed. He stated that the program was new,
and his office did its own due diligence on whether the
project was worthy. He believed the initial number had been
much higher and his office had pared it down. He added that
the other body agreed with the budget item.
3:09:11 PM
Co-Chair Johnson relayed that she had questioned the budget
item when it had initially come forward. She had spent a
lot of time analyzing the request and amount and had
determined it was needed.
Co-Chair Edgmon commended Representative Josephson for
bringing the amendment forward and highlighting the new
expansive project near the [Anchorage] airport. He referred
to existing indications of PFAS before the project had
started.
Representative Coulombe thanked Representative Josephson.
She shared that it was a very sad story in Anchorage. She
speculated that if committee members had houses in their
community that were contaminated and needed city water,
they would likely feel just as passionate about the issue.
She asked if the municipality was able to address the
issue. Alternatively, she wondered if the contamination
from the airport meant it had to come from the state.
Representative Josephson answered it was very expensive at
$3.5 million for 24 families. He did not know whether the
families were using potable water. He appreciated
Representative Coulombe's comments.
Representative Stapp appreciated the maker of the
amendment. He shared that Fairbanks knew all about PFAS
contamination in wells. He estimated that about one-third
of the town was contaminated by PFAS, which was why he had
sponsored a bill to start the process on PFAS mitigation.
He would not be supporting the amendment.
Co-Chair Edgmon noted that the committee had reported out a
PFAS bill SB 167 several days back (the House companion
version had been introduced by Representative Stapp). He
highlighted that his hometown of Dillingham also had a PFAS
problem.
3:12:49 PM
Representative Hannan reminded the committee that the PFAS
bill did not clean up contaminated wells. The bill allowed
the collection of PFAS material from small communities.
There had been several PFAS bills that went much further,
one that was vetoed the previous year. Across the state
there were Code Red canisters waiting to be collected
instead of being dispersed in communities. Additionally,
there were communities with contaminated wells. Some of the
cleanup was federal obligation and some may involve
litigated money to clean up. Meanwhile, people still had
contaminated water in their wells and the legislature
needed to start getting money to people's wells or
connecting them to safe drinking water systems. She stated
it would not come fast enough and there would be some real
health impacts. She highlighted the impact on drinking
water in Dillingham, Tok, and other locations. She believed
the state needed to start dealing with the projects and not
wait for the federal government. She noted that drinking
water was already a critical issue in rural Alaska. She
wished the committee could support the amendment.
Representative Josephson respected Representative Cronk's
point; however, he guessed that the item [for DOR] had
likely been identified as something that was not necessary
in its entirety for the coming year.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Josephson, Hannan
OPPOSED: Coulombe, Stapp, Tomaszewski, Cronk, Johnson,
Foster, Edgmon
Representative Galvin was absent from the vote.
The MOTION to adopt Amendment 11 FAILED (3/7).
3:15:49 PM
Representative Josephson WITHDREW Amendments 12 and 13
(copy on file).
3:16:08 PM
AT EASE
3:17:09 PM
RECONVENED
Representative Ortiz MOVED to ADOPT Amendment 14 (copy on
file):
DEPARTMENT: Commerce, Community and Economic
Development
PROGRAM: Grants to Unincorporated Communities (AS
37.05.317)
PROJECT TITLE: Metlakatla - Emergency Repair for Frank
Hayward Memorial Breakwater
ADD: $695,000, Unrestricted General Funds, (1004)
EXPLANATION: Critical repairs are needed for the
Frank Hayward Memorial Breakwater where the emergency
medevac vessel, Triton, is moored.
Representative Stapp OBJECTED.
Representative Ortiz explained the amendment. He thanked
Co-Chair Edgmon for his work on the capital budget and
believed he had done an exceptional job. He had no
complaints and understood the situation. He was offering
the amendment in the name of public health and safety. He
understood it was one of the major goals put forward by
both capital budget chairs. The amendment would provide
$695,000 for Metlakatla to address a pressing health and
safety need. He relayed that Metlakatla was located on
Annette Island, 20 miles south of Ketchikan and could only
be reached by seaplane or boat. The Frank Hayward Memorial
Breakwater was constructed in 1986 and increased storm
intensity and high tides had increased pressure on the
aging infrastructure, resulting in significant storm
damage. He stressed that the damage needed to be addressed
to protect the health and safety of the community. He
explained that three floats and six pilings needed to be
replaced. The Medivac vessel, Triton was moored in the area
and emergency medical patients were transported from that
location. He relayed that the community was looking to do a
larger overhaul of the breakwater in the future, but in the
meantime, repairs were needed to make it usable. The
amendment addressed the health and safety of the Tsimshian
people of Metlakatla.
3:20:53 PM
Co-Chair Edgmon appreciated the amendment. He asked if it
was a project that would endeavor to seek federal funds for
overall completion. He had a number of fishing communities
in his district such as St. Paul Island and other
communities with breakwaters that had ultimately involved
millions in federal funds. He did not see matching funds
attached to the amendment. He asked if the overall amount
being sought was the overall amount needed.
Representative Ortiz replied that the amendment included
the total amount for the repairs to make it useable for
emergency evacuation purposes. The community had further
plans in the future to make the repair more sustainable for
long-term usage.
Co-Chair Edgmon stated that given the similarities in their
coastal districts he could empathize and understand the
need for the project. He noted that unfortunately it butted
up against the fiscal realities facing the committee.
3:22:42 PM
Representative Ortiz provided wrap up on Amendment 14. He
thanked the committee for its serious consideration of the
request. He believed there would be little pushback from
the other body during conference committee. He remarked on
the potential for $113 million to be set aside for some
particular purposes. He did not believe the ask was too
large to see the project move forward in the name of public
safety for the people on Annette Island.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Josephson, Hannan, Edgmon
OPPOSED: Stapp, Coulombe, Cronk, Tomaszewski, Foster,
Johnson
Representative Galvin was absent from the vote.
The MOTION to adopt amendment 14 FAILED (4/6).
Representative Cronk introduced family members in the
audience.
Representative Hannan requested a brief at ease for
Representative Cronk to see his family.
Co-Chair Edgmon thanked the committee for its input into
the budget process. He asked if there were committee
comments.
Representative Coulombe thanked Co-Chair Edgmon for the
process. She noted that noted that her first year in the
legislature [2023] there had not been a good capital budget
process. She acknowledged the work and appreciated that the
process was different than the prior year.
3:26:07 PM
Representative Cronk did not believe the House had done the
capital budget for his first several of years in office. He
remarked that it was not possible to fund everything and he
believed the process and effort had been fair. He thanked
Co-Chair Edgmon for his work.
Co-Chair Johnson thanked staff and Co-Chair Edgmon for
their work.
Co-Chair Edgmon thanked his staff, LFD, OMB, and Co-Chair
Foster's staff Brodie Anderson.
Co-Chair Johnson MOVED to REPORT HCS CSSB 187(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes with permission to LFD and
Legislative Legal Services to make technical and conforming
changes.
There being NO OBJECTION, it was so ordered.
HCS CSSB 187(FIN) was REPORTED out of committee with seven
"do pass" recommendations and three "amend"
recommendations.
Co-Chair Foster noted there would be a 10 minute break.
3:29:12 PM
AT EASE
3:54:23 PM
RECONVENED
HOUSE BILL NO. 307
"An Act relating to the taxation of independent power
producers; and increasing the efficiency of integrated
transmission system charges and use for the benefit of
ratepayers."
3:54:53 PM
Co-Chair Foster noted the committee would consider eight
amendments and two fiscal notes.
3:55:51 PM
AT EASE
3:56:32 PM
RECONVENED
Co-Chair Foster noted the committee would review the two
fiscal notes.
CURTIS THAYER, EXECUTIVE DIRECTOR, ALASKA ENERGY AUTHORITY
(via teleconference), reviewed the Alaska Energy
Authority's (AEA) zero fiscal note, OMB component number
2599. The agency did not anticipate any fiscal impact as a
result of the legislation. He relayed that AEA owned
transmission assets that were part of the Railbelt
integrated transmission system, but AEA was not regulated
by the Regulatory Commission of Alaska (RCA) according to
AS 44.83.090(b). He elaborated that the legislation did not
include costs associated with the AEA-owned Bradley Lake
hydroelectric project.
Co-Chair Foster moved to the RCA fiscal note.
NAOMI JOHNSTON, ADMINISTRATIVE OPERATIONS MANAGER,
REGULATORY COMMISSION OF ALASKA (via teleconference),
reviewed the fiscal impact note from the RCA, OMB component
number 2417. The note included $250,000 for services in FY
25 and $50,000 for services in FY 26. The funding source
was general funds. The bill would require the RCA to
establish a transmission cost recovery mechanism, develop a
process to transition to the cost recovery mechanism, and
to create an integrated transmission system association.
Additionally, the bill would require the RCA to adopt
regulations and contract services would be needed to
develop the cost recovery mechanisms and regulations for
the program to meet statutory timeframes. Other costs such
as public notices, postage cost, and any associated legal
costs resulting from investigations would be absorbed into
the RCA's operating budget.
4:01:00 PM
AT EASE
4:01:20 PM
RECONVENED
Co-Chair Foster began the amendment process.
Co-Chair Edgmon WITHDREW Amendment 1 (copy on file). He
explained that it was part of a later amendment.
Co-Chair Edgmon MOVED to ADOPT Amendment 2, 33-GH2489\A.8
(Walsh, 5/1/24) (copy on file):
Page l, line 1, following "producers;":
Insert "relating to the Alaska Energy Authority;"
Page 2, following line 7:
Insert a new bill section to read:
"* Sec. 3. AS 39.25.110(11) is amended to read:
(11) the officers and employees of the following
boards, commissions,
and authorities:
(A) [REPEALED]
(B) Alaska Permanent Fund Corporation;
(C) Alaska Industrial Development and Export
Authority;
(D) Alaska Commercial Fisheries Entry Commission;
(E) Alaska Commission on Postsecondary Education;
(F) Alaska Aerospace Corporation;
(G) [REPEALED]
(H) Alaska Gasline Development Corporation and
subsidiaries
of the Alaska Gasline Development Corporation;
(I) Alaska Energy Authority;"
Renumber the following bill section accordingly.
Page 3, following line 21:
lnse1t a new bill section to read:
"* Sec. 5. AS 44.83.040 is amended by adding a new
subsection to read:
(e) The authority may, as the authority considers
advisable, appoint persons as officers, including an
executive director, and employ professional advisors,
counsel, technical experts, agents, and other
employees. The executive director and employees of the
authority are in the exempt service under AS 39.25."
Co-Chair Foster OBJECTED for discussion.
Co-Chair Edgmon explained the amendment. He stated there
was currently a unique relationship between AEA and the
Alaska Industrial Development and Export Authority (AIDEA).
He detailed that AEA's employees were employed by AIDEA.
The amendment would enable AEA to have its own employees
once again, where the existing PCNs [position control
numbers] would be transferred with no additional cost from
AIDEA to AEA. The change would allow for accounting and
budget simplification and potential cost savings due to
efficiencies. He added there was a real possibility that
the two agencies would be served by separate and distinct
boards for the first time, which would help complete the
separation of the two entities. He elaborated that the
agencies had one board to oversee their functions.
4:03:16 PM
Representative Josephson asked if it was fair to say that
Amendment 2 was designed to do what the administration was
trying to do in January.
Co-Chair Edgmon answered, "No, but with a hint of yes." He
explained that the executive order aspired to split the two
entities into two separate boards (which was included in
another piece of legislation). The amendment accompanied
the separation of the two boards by allowing AIDEA
employees working for AEA to transfer to AEA.
Representative Josephson asked what it looked like on the
ground. He asked the employees would move their offices and
change their workload and assignments.
Co-Chair Edgmon stated the PCNs for AEA employees were
listed as AIDEA employees. He stated it had been a long
time in the making and the amendment would complete the
separation of the two facilities, assuming the provision to
separate the boards passed. He believed there was a high
probability of that taking place.
4:05:12 PM
Representative Hannan asked if the provision in Amendment 2
only worked if the separation of the two entities went
through. Alternatively, she wondered if it could function
independently.
Co-Chair Edgmon answered that AEA employees were
statutorily designated as AIDEA employees. The amendment
would move AEA employees over to AEA. It was his
understanding that the separation of the two boards
required a different vehicle. He stated that the action by
the amendment could take place while still under the
framework of one board. He believed that in time there
would be two boards.
Representative Hannan relayed that she was supportive
either way.
Co-Chair Foster WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 2 was ADOPTED.
4:06:37 PM
Representative Stapp MOVED to ADOPT Amendment 3, 33-
GH2489\A.16 (Walsh, 5/2/24) (copy on file). [Note: due to
the length of the amendment it is not included here. See
copy on file for details.]
Representative Josephson OBJECTED for discussion.
Representative Stapp explained the amendment. The amendment
was a result of numerous conversations he had with
stakeholders, power producers, utilities, and governor's
staff. He had looked at things done in the other body to
try to find the best path forward. The amendment tried to
incorporate the best ideas and concepts floating around the
legislature to move it toward the finish line. He noted it
was much closer to the original bill than the version
currently before the committee. He asked his staff Bernard
Aoto to come to the table to review the sectional analysis.
He noted that Andrew Jensen from the governor's office was
present to answer technical questions.
BERNARD AOTO, STAFF, REPRESENTATIVE WILL STAPP, reviewed
the sectional of the amendment (copy on file):
Section 1
Amends AS 42.05.020(f) to increase the salary for
Regulatory Commission of Alaska (RCA) commissioners
from Range 27 to Range 29 for purpose of improved
recruitment to positions.
Section 2
Amends AS 42.05.254(a) to increase the regulatory cost
charge for telecommunications providers to fund
operations at the RCA and the Regulatory Affairs and
Public Advocacy (RAPA) section of the Department of
Law. The increase for RCA operations is from 0.7
percent to 0.98 percent, and the increase for RAPA is
from 0.17 percent to 0.22 percent.
Representative Josephson asked if Mr. Aoto was reading from
something committee members were supposed to have. He did
not have the document.
Mr. Aoto answered that the document was provided as backup
information and he did not know whether members had it in
their packets.
Co-Chair Foster took an at ease.
4:09:10 PM
AT EASE
4:18:03 PM
RECONVENED
Co-Chair Foster relayed that committee members had received
the sectional analysis (copy on file). He asked Mr. Aoto to
continue his review. He finished reviewing Section 2 shown
above.
Section 3
Amends AS 42.05.381(e) to require the RCA to adopt
regulations specific to refuse utilities for setting a
range for adjustment of rates by a simplified rate
filing procedure. This expands the current public
utilities covered by the section that currently
includes electric cooperatives and telephone
utilities.
Section 4
Amends AS 42.05.381 to expand the criteria for a 'just
and reasonable' rate to consider whether the purpose
of the rate is to increase the diversity of supply,
promote load growth, or enhance energy reliability or
energy security.
Section 5
Amends AS 42.05.431(b) to ensure that wholesale power
contracts between a utility and an independent power
producer (IPP) must reflect a tax exemption or
government subsidy provided to a utility or IPP. The
purpose is to require that tax exemption provided for
in the bill is passed through to the ratepayers.
Section 6
Amends AS 42.05.431 to add a section allowing for cost
recovery in rates for renewable energy projects less
than 15 megawatts that have been approved by the
utility's board of directors. This cost recovery would
not require approval by the RCA, and would apply only
to utilities subject to the jurisdiction of an
Electric Reliability Organization (ERO). The only ERO
in the state covers the Railbelt, so this provision
would be limited to those utilities. The 15 MW
threshold is based on the project size that requires
pre-approval by the RCA for utilities subject to an
ERO in AS 42.05.785.
Section 7
Amends AS 42.05.762 to require that an ERO prioritizes
reliability and stability of an interconnected
electric system while considering cost to the
customer. The purpose is to provide additional clarity
to the mission of an ERO.
Section 8
Amends AS 42.05.770 to require an ERO to develop
nondiscriminatory standards for interconnection, and
it removes the requirement that an ERO develop open
access and cost recovery standards. The purpose of
this section is to clarify responsibilities as a
transmission cost recovery and open access tariff will
be transferred to the Railbelt Transmission
Organization.
Section 9
Similar to Sec. 2 in that it amends AS 42.06.286(a)
increases the regulatory cost charge on pipeline
carriers to fund operations of RCA and RAPA. The
increases are the same level, with an increase for RCA
operations is from 0.7 percent to 0.98 percent, and
the increase for RAPA is from 0.17 percent to 0.22
percent.
Section 10
Amends AS 43.98 to add a new section that would exempt
electricity generation facilities built by an
independent power producer from state and local
taxation. This exemption has several conditions: It
only applies to projects constructed and placed into
service on or after July 1, 2024; and it only applies
to projects that are only selling wholesale power to a
tax-exempt cooperative or municipal-owned utility.
Section 11
Amends AS 44.83.990 to create a new board for the
Alaska Energy Authority to include the commissioners
of Revenue and Commerce, Community and Economic
Development; and six public members to be appointed by
the Governor.
Section 12
Amends AS 44.83.030 to allow for the commissioners of
the board to delegate their responsibilities to a
designee; that public members serve for three-year
terms; and the process for filling vacancies.
Section 13
Amends 44.83.040(a) to account for the larger size of
the AEA board to update the number of members required
for a quorum and a majority vote.
Section 14
Amends AS 44.83.080 to add an additional authority
allowing for AEA to acquire battery or energy storage
systems.
Section 15
Amends AS 44.83.090(b) to make AEA subject to the
jurisdiction of the RCA solely for the purposes
outlined in the creation of the Railbelt Transmission
Organization requiring the establishment of an open
access and transmission cost recovery standard.
Section 16
Amends AS 44.83 to add a new section that creates the
Railbelt Transmission Organization (RTO) for the
purpose of establishment of an open access and
transmission cost recovery standard. This will be
accomplished by eliminating current per-unit wholesale
charges to be replaced by a new mechanism to fairly
recover the costs of operating the system.
This section establishes the RTO within the Alaska
Energy Authority, and includes representatives of the
Railbelt utilities. The RTO is subject to RCA
jurisdiction, and will be required to file tariffs to
achieve this purpose.
The section also establishes the structure for the
open access and cost recovery mechanism covering the
'backbone' transmission system, and provides a
deadline for the submission of this tariff of no later
than July 1, 2025. If the tariff is not submitted by
this date, the section requires the RCA to establish
the open access and cost recovery standard consistent
with this section.
The section requires that this commission-approved
cost will be passed directly and transparently to the
end customer. (Note that customers already pay these
costs now, but it is not a transparent on-bill
charge.)
Section 17
Provides for the transition of the new members of the
AEA board of directors with initial staggered terms of
one-, two-, and three-year terms.
Section 18
Provides for a deadline for the RTO to be formed by
Jan. 1, 2025.
Section 19
Provides for an immediate effective date for Sec. 3.
Section 20
Provides for an effective date of July 1, 2024, for
the remainder of the act.
4:25:51 PM
Co-Chair Foster asked Representative Stapp to address the
main parts that were in the Senate version and parts that
were left out.
Representative Stapp replied that one of the concepts not
included that was included by the Senate related to net
metering. He deferred to Mr. Jensen and staff to talk about
the fundamental differences in the bill.
ANDREW JENSEN, ENERGY POLICY ADVISOR, OFFICE OF THE
GOVERNOR, replied that that there were a number of things
that had been taken out. The amendment removed the RCA
qualification changes and the net metering section. He
relayed that another bill that had passed the Senate
addressed net metering and the two measures did not have
the same rate structure. He explained that the items would
have to be reconciled into a final product. For example,
there should not be one [rate structure] for single family
residential and one for multifamily. He referenced version
U of the legislation and stated that the largest change was
related to the powers of the Railbelt transmission
organization. The amendment brought the bill closer to the
original intent of the legislation, which was to create an
association tasked with eliminating "wheeling." He shared
that all of the utilities including Chugach, Homer, Golden
Valley, and Matanuska Electric Association expressed desire
to eliminate wheeling tariffs in favor of a different way
to recover costs. The concept had been narrowed down to
that function for the RTO as an initial step. The amendment
removed the responsibility for transmission planning from
the RTO and removed the provisions around the requirement
to transfer management of assets to the RTO. The amendment
would still establish an RTO, which included the Railbelt
utilities and AEA, and was tasked solely with eliminating
wheeling rates, which was the objective of the governor's
original bill.
4:28:55 PM
Representative Josephson saw that the RCA would have some
jurisdiction. He asked if the RTO would only be subject to
the jurisdiction after large new facilities could be
constructed.
Mr. Jensen answered that AEA had to be "within this"
because it was an asset owner that had already recovered
its costs, and it was positioned to be a very large asset
owner with the GRIP [Grid Resilience and Innovation
Partnerships] project. The intent was to ensure there was
economic oversight of the cost recovery. There was nothing
exempt from the RCA's jurisdiction when it came to cost
recovery standards.
Representative Josephson asked if the RCA would be able to
prohibit a major energy project for being inconsistent with
a greater integrated resource plan prior to its
construction.
Mr. Jensen asked if Representative Josephson was referring
to generation projects.
Representative Josephson agreed.
Mr. Jensen answered that AS 42.05.785 requiring preapproval
of projects would still be in place for the ERO. He
elaborated that any generation project larger than 15
megawatts would still require preapproval from the RCA.
Representative Josephson repeated the statute reference for
confirmation.
Mr. Jensen agreed. He pointed to Section 6 of the sectional
analysis that referenced where the amendment would exempt
projects smaller than 15 megawatts from cost recovery. He
stated that preapproval for projects larger than 15
megawatts would still be required.
Representative Josephson did not see the statute listed in
the amendment.
Mr. Jensen clarified that the statute was not listed in the
amendment, and he had provided it as context for the
committee. There had been some questions about where the 15
megawatts threshold had come from; it was based on existing
statute.
Representative Josephson stated that Chugach Electric did
not think an RTO was needed and that only the existing ERO
was needed. He asked if his understanding was accurate.
Mr. Jensen answered that Chugach [Electric Association] had
stated it supported the governor's original bill, which
required the creation of an association for the purposes of
transmission cost recovery standards. He clarified that the
amendment would return the bill to that one purpose, to
eliminate wheeling in favor of a new standard. He relayed
that the amendment was closer to Chugach's public comment
that it was aligned with the original bill, joining a group
with other utilities, and eliminating wheeling in favor of
a new transmission standard. He thought there would likely
be additional public comment made by Chugach to clarify.
4:33:10 PM
Representative Coulombe asked why the creation of another
organization was necessary. She wondered why the ERO was
not sufficient.
Mr. Jensen answered that the ERO statute stated that the
ERO would create a cost recovery standard for the utilities
to follow. The amendment would require the utilities to get
together to create one tariff. The ERO was still standing
as an organization where the Railbelt utilities had been
meeting weekly since November with technical experts within
their staff, in addition to attorneys and consultants to
develop what the transmission cost recovery would look
like. The administration believed the creation of the
organization was the fastest most efficient way to
eliminate wheeling rates. He stated the original purpose of
the governor's bill was to form an association [utilities]
were required to join to get rid of new tariffs.
Representative Coulombe stated her understanding that the
RTO would deal with wheeling rates and the ERO dealt with
four different tariffs. She asked why they were not
adapting the existing organization. She thought it sounded
like it was the same makeup. She asked why they were
creating another organization.
Mr. Jensen clarified that the ERO was only tasked with
developing a standard, it was not tasked with filing the
tariff with the RCA. The utilities were required to file
the tariff. The ERO did not have the authority to file a
tariff on behalf of the utilities.
Representative Coulombe read from Section 5 of the
amendment: wholesale power contracts between a utility
and an independent power producer (IPP) must reflect a tax
exemption or government subsidy provided to a utility or
IPP." She asked if it was one-for-one. She wondered if an
entity had to use all of the tax exemption to reduce the
cost to the customer.
Mr. Jensen responded that it was ultimately within the
purview of the RCA. He explained that the IPP knew it
needed to come in below the avoided cost of the utility;
therefore, there would be the potential where the IPP came
in just below that amount and could pocket the rest of the
exemption as a benefit. It was possible to calculate what a
property tax would be in terms of the overall cost to the
project. The Department of Revenue (DOR) could make the
calculation and the IPP could be required to produce the
information. He stated that it would be a topic of
negotiation between the utility and IPP. The language in
Section 5 ensured that the tax exemption was put in place
for the specific purpose of costs being returned to the
ratepayers.
4:37:10 PM
Representative Coulombe was hearing there was discretion.
She asked for verification that 100 percent did not have to
go.
Mr. Jensen surmised that there could be discretion, but the
job of the RCA was to protect the ratepayer and to ensure
the ratepayer was receiving the maximum benefit. He
explained that the RCA relied on DOR to analyze and provide
third-party input. He stated that the utilities, within the
negotiation process, would be adamant the benefit they were
receiving was reflected in the power purchase agreement. He
noted there had been testimony from Matt Perkins from
Alaska Renewables (who was working with Golden Valley to
develop a large 150 megawatt wind farm) that they already
do a side-by-side analysis to show the cost when property
taxes were paid versus not paid.
4:38:22 PM
Representative Coulombe supported the section but was
trying to determine whether 100 percent of the lower cost
would actually be passed on.
Mr. Jensen replied that the rates were reviewed by the RCA
in a public process. The general public would be able to
see the information, comment, and intervene. He explained
there was a great deal of public protection. He noted that
funding was increased for staff within the RAPA section of
the Department of Law, which was there to protect the
public. There were multiple layers of safeguards from the
negotiations including DOR, RCA, and the public to ensure
the maximum benefit flowed through.
Representative Coulombe read Section 4 of the amendment:
"to expand the criteria for a 'just and reasonable' rate to
consider whether the purpose of the rate is to increase the
diversity of supply, promote load growth, or enhance energy
reliability or energy security." She asked what the just
and reasonable rate was currently based on.
Co-Chair Edgmon asked for a repeat of the question.
Representative Coulombe repeated her question.
4:40:45 PM
Co-Chair Edgmon relayed that he was carrying the amendment
for a third party. He explained that the purpose of the
provision was to give the RCA more authority or a broader
scope when considering rates to look at the diversity of
fuel source (such as renewable energy), redundancy factor
and reliability in the near and long-term, and cost
diversity. He stated it provided a more expansive portfolio
for the RCA to consider.
Representative Coulombe looked at the language "to
consider" and noted it gave the RCA the option. She was
weary of pulling away the cost of the ratepayer. She
believed it needed to be the primary consideration. She was
concerned about a scenario where rates had to be increased
as a result of the expense of numerous new renewable
projects. She stated it was a big shift and she was
concerned it would be used as an excuse to raise rates.
Mr. Jensen responded that did not know exactly why it was
included. He noted there was a Bradley Lake exemption in
statute, and it was exempted from RCA jurisdiction because
it was more expensive than the current cost of power. Under
the RCA rules at the time, the project would not have been
approved. He elaborated that the legislature had decided to
exempt the project from RCA review. He noted that Bradley
Lake had gone from the most expensive power when it came
online to being the cheapest power at present. He believed
the provision gave the RCA some criteria that it did not
have back when Bradley Lake was being contemplated. He
noted that the provision did not require the RCA to approve
something under one of the criteria.
4:43:31 PM
Representative Galvin noted that Representative Coulombe
had asked all of her questions.
Representative Hannan wondered why the amendment did not
include the transfer of the management of the assets that
would be part of the RTO.
Mr. Jensen answered that there had been public testimony
from Chugach that morning and in the past that the transfer
of management of assets, and particularly language that
referred to acquiring operational control, was a
nonstarter. He explained in terms of transferring the
management of assets, he did not know that the legal
implications were fully flushed out. He stated that it did
not transfer ownership, but it required transferring of
asset management as well as references to operational
control. Rather than taking a step that may not be the
right one in terms of how to manage the Railbelt in the
best fashion, the amendment would remove the section from
Senate version U.
4:45:19 PM
Representative Hannan noted the committee had not discussed
or heard anything about Sections 1 through 3 related to the
RCA. Section 1 included a step and range salary increase
for the commissioners, Section 2 was a telecom surcharge
increase, and Section 3 was refuse utility regulation. She
was feeling a little blindsided about policy changes
related to a fairly complex entity. She wondered if the
changes had occurred in the Senate version. She asked for
details on the sections.
Mr. Jensen explained that the salary increase for RCA
commissioners was included due to competitiveness in a
difficult hiring environment. He noted that salary was key,
as evidenced across state government related to filling
positions. He stated that getting the best people on board
required a competitive salary. He relayed that RCA
Commissioner Doyle had testified that the only lawyer on
board was being term limited out. Hiring a qualified
lawyer, perhaps from the private sector, would require a
competitive salary. Section 2 increased revenue available
to the RCA and RAPA. He explained that the budget for the
two agencies was capped and they did not receive general
funds; they received funds strictly through the regulatory
cost charge. He expounded that staff did a tremendous
amount of work on highly technical matters and it was
difficult to retain staff without being competitive. He
noted that the RCA and RAPA were both consumer protection
agencies. The administration believed it was important to
increase the resources available to the agencies,
especially when looking into the future where additional
responsibilities continued to increase.
Mr. Jensen relayed that Section 3 was an amendment brought
forward by members of the majority. He explained there was
an existing provision in statute that allowed for telecom
and electric cooperatives to have an expedited rate filing
process. The section added refuse, which were considered
public utilities, to an existing category that was eligible
to go through some expedited rate review. He referenced RCA
workload and the length of time it took to process rate
cases. The section would provide an avenue for refuse
utilities to have the same access to an expedited review as
electric and telecom utilities.
4:49:14 PM
Representative Hannan stated that the committee had no
dialogue or public testimony on the topic. She lived in a
community where refuse was controversial and she thought
the city would want to weigh in or talk about the
regulation of refuse. She felt that some of the dialogue
was that the state would expand what the RCA had to do
because of the transmission stuff, but the increased
workload would be shared with other utility regulation
portions of their job and duties. She stated it gave her a
little heartburn.
Mr. Jensen answered that the section required the RCA to
adopt regulations through a public process. Additionally,
in a simplified rate filing process, there was still an
opportunity for public comment and review. He elaborated
that while a rate case was in place, the RCA allowed for a
temporary increase while the rate was fully investigated.
The provision was intended to hold a utility harmless while
it was going through the lengthy and cumbersome rate
process. If a utility had a need to increase its revenue
due to inflation, fuel costs, etcetera, it had the
potential to be financially harmed if it could not adjust
its rates while the rate case was being evaluated. The
process enabled an interim rate, while the case proceeded.
He explained it was the same process for electric
cooperatives and utilities. The section would extend it to
a different utility to allow for expedited rate review. He
clarified that it did not cut the public out of the
process.
4:51:43 PM
Representative Hannan stated it cut out the legislature's
public process when it was changing statute. She asked for
the difference in pay for a range 29. She remarked that it
would have an impact on the budget.
Mr. Jensen replied that he could follow up with the
information. The pay would also depend on the salary step.
He deferred to Mr. Aoto.
Mr. Aoto answered that at the base level, the salary for a
range 27 was about $113,000/year and a range 29 was about
$120,000 for an average increase of about $7,800.
Representative Josephson asked whether new large
transmission projects would need preapproval under
Amendment 3.
Mr. Jensen there were transmission project preapproval
requirements related to length, size, and capacity of a
project. He offered to follow up with the details.
Representative Josephson wanted to ensure no transmission
project above 69 kilovolts could be built without RCA
approval. His concern was that committee members would be
asked to vote on the amendment during the current meeting.
He asked for verification that nothing in the amendment
would allow the construction of such a project without RCA
approval.
Mr. Jensen answered that he would have to review the
statute. He stated that preapproval was required for large
projects over a certain threshold. He believed they would
be required to do so. He relayed that there were member-
owned cooperatives responsible to their ratepayers. The
cooperatives had fiduciary duties and prudence and
responsibilities. Ultimately, the cooperatives had to go to
the RCA for approval of cost recovery; therefore, it was
not in their best interest to put their ratepayers at risk
for uneconomic projects.
4:54:52 PM
Representative Josephson asked if the amendment would limit
the RTO's principal function to overseeing the transmission
tariff.
Mr. Jensen answered affirmatively. He confirmed that under
the statute, the RTO's only job was to eliminate wheeling
and establish a new cost recovery and open access tariff.
The RTO would not manage the assets. He clarified that
nothing would prevent the utilities from getting together
on their own. The RTO would establish the cost recovery and
open access tariff for the "backbone" asset based on
standards established by the Federal Energy Regulatory
Commission (FERC). The commission used the Mansfield Test
that included five criteria for what qualified as a
transmission asset. The statute would give the utilities
and RCA clear guidance on what the state expected them to
follow. He explained that if the utilities could not come
to an agreement by the deadline specified in the amendment,
the RCA would do it and would follow the standards to
ensure it followed industry accepted federal standards.
4:56:18 PM
Representative Galvin asked if the [RTO's] job of
overseeing a new cost recovery and open access tariff could
be done without legislation. She understood the group had
been meeting weekly for more than a year. She was trying to
understand the purpose of provision.
Mr. Jensen believed that if it was possible for utilities
to do it on their own, it would have been done decades ago.
He stated that legislation was required to make it happen,
which was the purpose of the current legislation. The
utilities had stated they were willing to join the
organization for the express purpose of eliminating
wheeling for a new cost recovery and open access tariff.
Representative Galvin stated that one utility out of Homer
seemed to think the state needed to wait a bit longer for
more distillations of what the working group had to
suggest. She asked if she had misinterpreted the testimony.
Mr. Jensen replied that Homer Electric had expressed its
concern, particularly with the bill version in the other
body. He had spoken with Homer Electric earlier in the day
and it very optimistic that the group would be able to come
up with something that worked. He relayed that Homer
Electric was in favor of the original legislation, which
included joining an association and eliminating wheeling.
He believed their concerns were being addressed by the
amendment. He explained that narrowing the focus of the
organization would start to build consensus. He explained
that legislation was required to accomplish the change.
Some utilities had "straight up said that and other
utilities had said that they're willing to do it."
4:59:43 PM
Representative Coulombe referenced an earlier comment that
Section 3 related to refuse did not have any public
testimony. She clarified that there was public testimony
offered on the subject twice in the Senate.
Co-Chair Edgmon stated it was important that the committee
understood the difference between the RTO and the Electric
Reliability Council. He felt he had an advantage because he
had gone on the Iceland trip and the Iceland model featured
a private commodity regulated by a government nonprofit
entity that dispersed the energy equally to all
beneficiaries and users. He believed the Railbelt
Transmission Organization would take whatever the source of
energy (e.g., natural gas, geothermal, wind, solar) and
distribute the energy was equally distributed to various
communities. He elaborated that it would take the private
sector energy and convert it into a regulated commodity to
be dispersed equally to different utilities. The various
utilities had different costs, business models, debt
ratios, sizes, but they would receive the power the same
way through the RTO. He stated it was the big difference
between the Electric Reliability Council.
5:02:21 PM
Mr. Jensen expanded on the statement. The concept Co-Chair
Edgmon was talking about was known as economic dispatch,
which meant the lowest cost power was what moved through
the system. He explained that true economic dispatch
required a system operator to make sure the lowest cost
power was moving. The ERO was an oversight organization,
not a system operator. He elaborated that the RTO in the
amendment was not a system operator. The administration
believed the legislation was a foundational piece of how to
get to economic dispatch down the road. The first step was
to eliminate wheeling rates because wheeling rates
prevented economic dispatch from occurring. The bill had
been scaled back from the Senate version and reflected the
foundational structure to get to economic dispatch through
better unified management of the system. He stated it was
the administration's goal and "what everybody is trying to
get." He referenced some of the tension around the bill in
the other body. He explained that it was very difficult to
take something out of an organization with transmission
planning at the ERO, but it would be easier to add
responsibilities. The goal was to start with something
everyone agreed on eliminating wheeling and continue to
work to determine what else could be agreed upon to get to
economic dispatch. The goal was moving the lowest cost
power from whatever source, from anywhere, to anywhere.
Co-Chair Edgmon relayed that the RTO would have "muscle"
and would be able to enforce all of the various sources of
power that came at different costs, some cheaper than
others. The RTO would have the economic dispatch to get the
power out to utilities at a rate that provided the cheapest
power to everyone on an equal basis including Homer
Electric, which was quite small compared to Chugach, all
the way up to the Golden Valley Electric Association (GVEA)
located in the far north. There was a functional role that
an RTO would play that was very different than the role of
an ERO. He stated that until that was clear, it was not
possible to understand the rest of the legislation.
Mr. Jensen answered that public testimony had talked about
three different constraints. The first was a physical
constraint pertaining to infrastructure. He explained that
the transmission line on the Kenai Peninsula responsible
for moving Bradley Lake power was being upgraded. The GRIP
project would provide additional capacity to address
physical constraints. Second, getting rid of wheeling rates
and providing for tax parity for independent power
producers would remove an economic constraint. Third, the
formation of the RTO would start to get rid of the
institutional constraint. All three things needed to
happen. The bill moved on the physical and economic
constraints and included the first step toward dealing with
the institutional constraint. He believed the bill was a
great foundational step toward the ultimate goal.
Co-Chair Edgmon agreed that Mr. Jensen's summary was the
intent of the goal during the current session. He stated
that everything else was ancillary. The intent was to set
the stage for GRIP projects, the expansion of Bradley Lake,
the addition of renewable energy power sources, more
natural gas for a cheaper power stability, and a grid-like
relationship that did not currently exist.
5:06:51 PM
Representative Josephson asked if committee members should
be concerned that the amendment removed the net metering
function that was included in SB 217.
Mr. Jensen asked Representative Josephson to repeat the
question.
Representative Josephson complied.
Mr. Jensen answered that the metering section had been
removed because there was a bill in the other body that
touched on net metering for multiple meters at the same
address. He explained it had a certain rate structure
instruction to the RCA that would differ from the net
metering that was in the other body. He expounded that the
two options had to be reconciled in order to avoid one rate
for multimeter locations versus a single family location.
Representative Josephson believed Mr. Jensen was referring
to SB 152.
Mr. Jensen agreed.
Representative Stapp remarked that there had been a robust
discussion on the amendment. He asked for members' support.
Representative Josephson WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 3 was ADOPTED.
Representative Josephson WITHDREW Amendments 4 and 5 (copy
on file).
Representative Hannan MOVED to ADOPT Amendment 6, 33-
GH2489\A.13 (Walsh, 5/2/24)(copy on file):
Page 1, line I:
Delete "independent power producers"
Insert "new electricity generation facilities"
Page 1, line 10, through page 2, line 7:
Delete all material. 7
Renumber the following bill section accordingly.
Page 3, following line 21:
Insert a new bill section to read:
"* Sec. 3. AS 43.98 is amended by adding a new section
to read:
Article 2A. Taxation of New Electricity Generation
Facilities.
Sec. 43.98.100. Taxation of new electricity generation
facilities. An electricity generation facility that is
constructed and placed into service on or after July
1, 2024, is not subject to state and local ad valorem,
income, and excise taxes if the electricity generation
facility provides power only to a public utility. In
this section, "public utility" has the meaning given
in AS 42.05.990."
Co-Chair Foster OBJECTED for discussion.
Representative Hannan explained that the amendment. She
stated that extending the exemption from state and local
taxes to the independent power producers would have an
unintended consequence in the future. She stated that the
hope was that electric transmission networks would grow to
connect more communities across the state. While most
electric utilities in Alaska were formed as cooperative as
municipal owned, there were also economically regulated
investor-owned utilities (IOUs). She elaborated that IOUs
paid state and local taxes and by regulation, passed the
cost of the taxes onto customers through authorized rates.
She explained that without modifying the bill to provide
tax benefits to all new generation projects, instead of
only a certain type of for-profit nonregulated entities -
IPPs - the customers of IOUs would be unfairly burdened by
state and local taxes charged to them, but not charged to
other for profit energy companies. The amendment did not
factor in the passage of Amendment 3, which was a
comprehensive rewrite. As HB 307 was written, an IPP may be
discouraged from making a sale to an IOU because it would
lose access to the proposed tax benefit. She stated that an
amendment that would extend tax benefits to IPPs for making
sales to any type of utility could still unfairly burden
the customers of an IOU by unfairly increasing its avoided
cost. She asked for members' support on the amendment.
5:11:17 PM
Co-Chair Foster asked Mr. Jensen to provide comments on
Amendment 6.
Mr. Jensen replied that the administration was neutral on
the measure. He relayed that the amendment was an expansion
on the administration's goal for the legislation. He
remarked that there had been public testimony earlier in
the day from Nils Andreassen with the Alaska Municipal
League (AML) about tax exemptions.
Co-Chair Edgmon asked if the definition of electricity
generation facility was in statute.
Representative Hannan answered it was her understanding
that the public utility definition in AS 42.05.990
addressed electric generation facilities.
Co-Chair Edgmon asked where an independent power producer
fit into the different definitions.
Mr. Jensen thought that an electricity generation facility
would appear to cover a wind or solar farm generating
electricity. He believed it would cover an IPP. He relayed
that the administration had chosen a narrow scope for the
bill to avoid things becoming a burden to its passage. The
administration deferred to the will of the committee on the
amendment.
Co-Chair Edgmon believed an electricity generation facility
was synonymous with independent power producer. He
suggested the amendment would be better suited by taking
out the lesser used term and using the term independent
power producer.
Mr. Jensen did not have any comments to provide on the
amendment. He relayed that it had not come from the
administration and there had not been time to run it by the
Department of Law. He was uncertain about the implications
and definitions.
Representative Hannan requested an "at ease."
5:14:38 PM
AT EASE
5:29:51 PM
RECONVENED
Co-Chair Foster noted the committee was hearing Amendment
6.
Representative Hannan noted it was the civilian knowledge
of a complex utility that required engineers and lawyers.
She noted that Co-Chair Edgmon had asked why not call it an
IPP. She clarified that IPPs did not currently exist in
Alaska statute; they fell under electric generation
facilities and regulated utilities. The amendment would
only impact new electrical generation projects after July
1, 2024, and would allow a tax advantage on the new
generation facility if the power was sold to a regulated
utility (e.g., private, cooperative, municipal). She
relayed that taxes paid by an IOU were entirely passed to
the consumer. She wanted to avoid situations where a
business producing power did not want to sell the power to
individual utility customers because they would lose their
tax advantage. She wanted to incorporate as much tax
incentive as possible to bring new power online to all
kinds of producers. She asked for members' support.
Representative Stapp stated that his amendment [Amendment
3] had adopted Section 10 that looked similar. He
identified two differences in Amendment 6. First, it
specified public utilities, but it did not incorporate
taxes and cooperatives. He did not know if there was a
material difference between a public utility, an electric
cooperative, or a municipal owned utility. He did not have
too much of an issue with the amendment, but he thought it
may be a little redundant. He asked to hear from Mr.
Jensen.
Mr. Jensen replied that it was a large policy change. He
stated that the administration's original bill had a narrow
exemption and had been vetted in the House and Senate as to
the particular tax exemption. He elaborated that there had
been a great deal of public comment and testimony on the
tax exemption. He stated that the amendment was a broad
expansion and large policy change for the legislature to
make. He thought it would require public comment for the
committee members to consider. He remarked that the
administration had not had a legal analysis over the
definitions or implications. He deferred to the will of the
committee.
5:34:15 PM
Representative Stapp asked Representative Hannan if there
was a fundamental difference between a municipal owned
utility and an electric cooperative and in the words public
and utility.
Representative Hannan answered that it was her
understanding that public utility incorporated all
utilities, while cooperative or municipal utilities
excluded some public utilities. She stated than an investor
owned utility was not a cooperative or municipality, but a
public utility included investor owned, cooperatives, and
municipal owned utilities.
Co-Chair Edgmon stated that public utility was a term for
something like the RCA, which regulated public utilities.
He stated that the term electricity generation facility was
not in statute, which he considered to be the Southeast
component to the Railbelt bill that had a place and a role.
He thought including the amendment in the bill may need to
be flushed out a bit more, like a definition section in the
bill that would precisely define an electricity generation
facility. He felt it had its place and should be considered
in a bill setting a structure in place for a long period of
time. He was supportive of the amendment. He noted that if
the amendment was included in the bill it would be
considered by the other body and legal counsel would likely
be consulted to do what was needed to strengthen it or in a
worst case scenario, remove it.
Representative Hannan hoped members would support the
amendment.
5:36:39 PM
Representative Coulombe OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Ortiz, Hannan, Cronk, Galvin, Johnson,
Edgmon, Foster
OPPOSED: Coulombe, Tomaszewski, Stapp
The MOTION PASSED (8/3). There being NO OBJECTION,
Amendment 6 was ADOPTED.
Representative Hannan MOVED to ADOPT Amendment 7, 33-
GH2489\A.9 (Walsh, 5/1/24) (copy on file):
Page 1, line 1, following "producers;":
Insert "relating to electric reliability
organizations;" 3
Page 2, following line 7:
Insert a new bill section to read:
"* Sec. 3. AS 42.05.760(a) is amended to read:
(a) An electric utility must participate in an
electric reliability organization if the utility
operates in an interconnected electric energy
transmission network served by an electric reliability
organization certificated by the commission. The
commission may not require an electric reliability
organization for an interconnected bulk-electric
system if (1) all of the load-serving entities
operating in the interconnected bulk-electric system
are exempt under AS 42.05.711 (b); or {2) the sum of
annual electric energy sales made by load-serving
entities operating in the interconnected bulk-electric
system is less than 3,000,000 megawatt-hours."
Renumber the following bill section accordingly.
Co-Chair Foster OBJECTED for discussion.
Representative Hannan explained the amendment would add a
new section, which would exempt all interconnected bulk
electric systems from the current requirement in statute to
form an ERO as long as the load sharing entity on the
interconnected system had an annual energy sale of less
than 3 million megawatts. She explained that the provision
would ensure that utilities from smaller communities
located outside the Railbelt that were working to become
interconnected would not face the expense of forming the
ERO that the Railbelt ERO was addressed at. She elaborated
that because of the considerably less economies of scale
for non-Railbelt systems, such costs could result in
significant burden to smaller system ratepayers.
Co-Chair Foster asked Mr. Jensen to comment on the
amendment.
5:38:51 PM
Mr. Jensen relayed that the administration was neutral on
Amendment 7. He had seen the proposal and was familiar with
the language. He believed the ERO statute was geared around
the Railbelt. He stated that the amendment did not preclude
utilities from forming an ERO, but utilities would not be
forced to do so.
Representative Stapp was not familiar with the 3 million
megawatt hours. He imagined that power in that amount would
be used by a small community in Southeast Alaska. He asked
for more information.
Mr. Jensen replied that the total load for the Railbelt was
around 4.4 million megawatt hours, while the amount for
AEL&P [in Southeast Alaska] was about 400,000 megawatt
hours. He stated that it would take quite a while before
Southeast utilities or other utilities around the state
would hit the threshold [of 3 million megawatt hours].
Representative Stapp reviewed his understanding of the
amendment. He observed that 400,000 to 3 million [megawatt
hours] seemed like a big change. He asked if there was a
ballpark for the number. He asked what the number would be
if it was possible to magically teleport all of the power
to all of the Southeast communities combined.
Mr. Jensen responded that if there were a number of
utilities with total sales of that size, something like an
ERO may make more sense to ensure the system was run
correctly, especially if there were multiple owners. He
explained that one of the reasons the ERO structure was
created was to force collaboration among utilities that
were connected but not necessarily cooperating with one
another. He believed it was the reason the amendment set
the number at such a high level.
Representative Stapp remarked that the Railbelt was
interconnected. He surmised that the amendment pertained to
things that were not interconnected. He asked if the
amendment would make it possible to carve out each
individual utility and measure their megawatt hours and
exempt them from a Railbelt RTO.
Mr. Jensen answered that multiple utilities were connected
to each other, and their combined sales reached the
threshold [outlined in the amendment]. He asked
Representative Stapp to clarify his question.
Representative Stapp cited the following language in the
amendment: "?the sum of annual electric energy sales made
by load-serving entities operating in the interconnected
bulk-electric system?" He did not interpret the language to
mean combined. He thought in theory the language could mean
individual.
Mr. Jensen clarified that the language specified the sum of
the sales by entities operating in the interconnected bulk
system. He explained it pertained to multiple utilities
combining their annual sales, which was about 4.4 million
megawatt hours for the Railbelt. The whole purpose of the
ERO was to take when there were multiple utilities
connected to each other.
Co-Chair Edgmon thought the amendment was outside the scope
of the bill topic. He believed the amendment almost
anticipated all of Southeast Alaska being on a grid. He did
not believe that would happen, especially in the near term.
He thought it would put a prescriptive feature into the
bill, whereas the previous amendment added a good tool for
the utility in Southeast that depended on hydropower. He
stated that the amendment envisioned something that would
not be in place in the near term and was theoretically
possible in the future.
5:44:16 PM
Representative Hannan outlined the concern that had been
brought to her. She stated that when the legislature first
talked about EROs about four years back it had included
multiple utilities connected together. For example, Haines
had one utility, the [nearby] community of Klukwan had a
different utility, and Mosquito Lake (located 20 miles up
the road) had yet another utility. She stated the three
utilities were small and were serving people who shopped at
the same grocery stores and attended the same schools. She
explained that the definition of "where they were" did not
really work. The communities hoped there would not be three
separate utilities serving the area in the near future and
that they may get enough generation in one of the utilities
that they would link together an ERO, but they did not need
the full structure of the Railbelt ERO. She explained that
current statute specified that utilities connected together
needed to for an ERO. She stated it was complex and each
utility had its own critical needs. The intent of the
amendment was to apply a threshold that made sure small
entities looking to cooperate together were not scooped
into it. She considered basing the amendment on geography,
but the amount of power drawn together between the
utilities involved was more recommended.
Mr. Jensen answered that if two utilities connected it
could trigger the requirement to form an ERO. He stated
that the administration wanted more utilities to connect to
each other to share load or increase their load. He stated
that on the Railbelt it had been established in statute in
2020 and it had taken a year to write the regulations,
which were about 110 pages. It had taken another year to
apply for certificate to the RCA as an ERO. There was a
requirement that if two utilities did not form an ERO, the
RCA would establish one for the utilities. He noted the
concern heard by Representative Hannan was that two
utilities hooking up could trigger the requirement to form
an ERO. He stated it was a cumbersome and costly process.
He relayed that the legislation had been written to apply
statewide, but it was aimed at the Railbelt. He elaborated
that the state wanted smaller utilities to hook together,
but if it created a burden, it may be a burden to
connecting together. He understood where the concerns
referenced by Representative Hannan were coming from.
5:47:23 PM
Representative Stapp thought if the amendment passed it
could incentivize the Railbelt utilities to potentially
kick someone out to avoid the requirement to form an ERO.
He thought they may kick GVEA out.
Mr. Jensen answered that the scenario would still require
leave three utilities connected and would require them to
be within an ERO.
Representative Stapp opposed the amendment. He stated that
his utility [GVEA] would like to be in an ERO and would not
like to be kicked out of the Railbelt.
Representative Hannan provided wrap up. She urged committee
members to consider that the current statute on EROs
required two or more utilities that were connected to form
an ERO. She stressed there were a lot of small utilities
and communities close together statewide that the state
likely did not want them to have to form an ERO for
purposes of transmission. She used Bethel and a small
nearby community as an example. She urged members' support.
Co-Chair Foster WITHDREW the OBJECTION.
Representative Stapp OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Ortiz, Galvin, Josephson, Foster
OPPOSED: Cronk, Stapp, Coulombe, Tomaszewski, Johnson,
Edgmon
The MOTION to adopt Amendment 7 FAILED (5/6).
[Note: Action on Amendment 7 was later rescinded. Amendment
7 was amended and adopted. See approximately 5:56 p.m. for
details.]
5:49:51 PM
Representative Ortiz MOVED to ADOPT Amendment 8, 33-
GH2489\A.11 (Walsh, 5/1/24) (copy on file):
Page 2, line 7, following "utilities":
Insert "; "independent power producer" does not
include a joint action agency established under AS
42.45.310"
Co-Chair Foster OBJECTED for discussion.
Representative Ortiz explained the amendment. He noted that
the amendment narrowed the focus back to the Railbelt. He
MOVED to ADOPT conceptual Amendment 1 to Amendment 8. He
explained it would delete line one of Amendment 8 because
it was specific to the bill prior to being amended. The
conceptual amendment would insert language on lines two and
three wherever "independent power producer" was defined in
the bill.
There being NO OBJECTION, conceptual Amendment 1 to
Amendment 8 was ADOPTED.
Co-Chair Foster asked for an explanation of the amendment
as amended.
Representative Ortiz highlighted that the intent of the
bill was to not impact utilities outside the Railbelt. He
stated that the definition of the independent power
provider as currently written in the bill would reach
outside the boundary of the Railbelt. He explained that the
Southeast Alaska Power Agency (SEAPA) was a wholesale power
provider that only sold power to municipal utilities. He
relayed that SEAPA was already defined under AS 42.45.300.
The current language of HB 307 would redefine SEAPA as an
independent power provider. He stated it was a problem he
was aiming to correct. The amendment would exempt joint
action agencies from the definition of independent power
producer. He elaborated that the joint action agency
statute, AS 42.45.300 allowed for multiple utilities to
form under a single agency, reducing risk, increasing
reliability, and reducing costs, which was the overall goal
of the bill. He stated that energy legislation should be
intended to reduce cost. He elaborated that redefining a
joint action agency as an independent power producer would
constitute a tax burden on its member utilities and
increase cost, which would go against the goal of the bill
to reduce customer costs in the Railbelt area. The
amendment would ensure that statutes did not conflict with
one another and to avoid any unintended consequences.
Co-Chair Foster asked if members needed a clean amendment
reflecting the passage of the conceptual amendment.
Representative Ortiz explained that the conceptual
amendment deleted line one of Amendment 7 and inserted
language on lines 2 and 3 wherever "independent power
producer" was defined in the bill.
Mr. Jensen stated his understanding of the amendment. He
asked for verification that Representative Ortiz was
stating that without the amendment an existing entity could
have its status changed.
Representative Ortiz agreed.
Mr. Jensen deferred to the committee. The bill covered
future projects so that existing relationships were not
interrupted. He added that the goal was to avoid unintended
consequences. He deferred to the will of the committee. He
added that they did not want to retroactively change
something.
Co-Chair Foster WITHDREW the OBJECTION.
There being NO further OBJECTION, Amendment 8 was ADOPTED.
5:56:31 PM
Representative Hannan MOVED to RESCIND action on Amendment
7. She wanted to offer a conceptual amendment to lower the
megawatt threshold.
There being NO OBJECTION, it was so ordered.
Representative Hannan MOVED to ADOPT Amendment 7 (copy on
file) [See 5:37 p.m. for the complete amendment]. She MOVED
conceptual Amendment 1 to Amendment 7. She explained that
the conceptual amendment would replace 3 million megawatt
hours with 1.5 million megawatt hours on line 13 of
Amendment 7.
Co-Chair Foster OBJECTED for discussion.
Co-Chair Edgmon stated his understanding that the purpose
of offering the conceptual amendment was to get enough
votes to pass Amendment 7.
Representative Hannan agreed.
Co-Chair Edgmon was considering whether it was possible. He
requested an "at ease."
5:58:06 PM
AT EASE
5:58:54 PM
RECONVENED
Mr. Jensen recalled a conversation recently about the
topic. He stated there was a regulation with a petition
process for exemption from the requirement to join an ERO.
For example, the process would enable three small
[connected] utilities to ask the RCA whether they had to
join an ERO.
Representative Stapp was not sure about the amendment, and
he would likely still be opposed at present. He noted it
did not mean he would not change his mind with some future
research.
Co-Chair Edgmon thought it was a valuable discussion. He
stated that maybe the committee set the stage for the bill
evolving and it could reach that additional step in the
next ten days or so. His one rub with the bill was that it
did not incorporate rural Alaska. He was not certain he was
able to vote in support of the amendment at present.
Representative Hannan wanted to ensure smaller utilities
outside the Railbelt that became interconnected, which was
a goal, would not face the huge expense of forming an ERO.
She remarked that even though there was a regulatory
bypass, it too was a burden. She noted that one of the
small utilities she referenced earlier was investor owned,
but the others were cooperatives with boards and local
board members. She explained that participating in the RCA
process to exempt themselves was still potentially a large
burden. She stated that the economies of scale outside the
Railbelt could result in a large burden for small utility
ratepayers. She explained that setting a threshold of power
was a solution that small utilities in Southeast Alaska had
requested (to not be covered by the EROs even though they
were striving to connect to each other).
Co-Chair Foster WITHEDREW the OBJECTION.
Representative Stapp OBJECTED.
A roll call vote was taken on the motion.
IN FAVOR: Hannan, Josephson, Galvin, Ortiz, Edgmon, Foster
OPPOSED: Tomaszewski, Cronk, Stapp, Coulombe, Johnson
The MOTION PASSED (6/5). There being NO further OBJECTION,
Amendment 7 was ADOPTED as AMENDED.
Co-Chair Foster stated that he would like to move the bill
from committee. He understood there was some desire to
expedite the bill. He observed that members appeared happy
to move the bill. He requested a motion.
Co-Chair Johnson MOVED to REPORT CSHB 307(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes with permission for Legislative
Legal Services to make technical and conforming changes.
There being NO OBJECTION, it was so ordered.
CSHB 307(FIN) was REPORTED out of committee with five "do
pass" recommendations, four "no recommendation"
recommendations, and one "amend" recommendation and with
one previously published fiscal impact note: FN2 (CED); and
one previously published zero note: FN1 (CED).
6:04:56 PM
RECESSED
6:48:09 PM
RECONVENED
Co-Chair Foster recognized individuals in the room. He
relayed that there were five more bills on the calendar
that evening. He suggested the one bill scheduled the
following day could be added to the calendar and the
meeting the following day could be canceled. He continued
to discuss the plan for the evening. The committee would
begin with SB 74 and SB 75 sponsored by Senator David
Wilson. He noted the bills were similar in nature and would
be heard simultaneously.
CS FOR SENATE BILL NO. 74(FIN)
"An Act relating to an interstate physical therapy
licensure compact; relating to the licensure of
physical therapists, physical therapist assistants,
occupational therapists, and occupational therapy
assistants; and providing for an effective date."
CS FOR SENATE BILL NO. 75(FIN)
"An Act relating to an audiology and speech-language
interstate compact; relating to the practice of
audiology and the practice of speech-language
pathology; and providing for an effective date."
6:53:13 PM
SENATOR DAVID WILSON, SPONSOR, introduced himself and
thanked the committee for hearing the two bills. He asked
his staff to start the presentation.
JASMINE MARTIN, STAFF, SENATOR DAVID WILSON, thanked the
committee for hearing the bills. She relayed that SB 75
allowed Alaska to enter the audiologist and speech language
pathologist interstate compact. Senate Bill 74 established
the interstate physical therapy licensure compact. She
would begin with SB 75. She noted that committee members
had received binders that included information relevant to
both bills. She stated that much of the information was
from the Council of State Governments (CSG) where the
National Center for Interstate Compacts was housed. She
detailed that CSG partnered with the Department of Defense
(DOD) to develop interstate licensure compacts. She
explained that the original conversation about the
transition of military families was expanded to a broader
scope of changing licensure structure. She shared that
Alaska was currently part of 28 interstate compacts. She
highlighted the driver's license compact as an example,
which meant that drivers did not have to get a new drivers
license in every state they visited.
6:55:37 PM
Senator Wilson noted that the bill packets also included
letters of support. He provided prepared remarks:
It should be no surprise to anyone here in Alaska that
there is a shortage of healthcare providers. Since
1950, the number of licensed provider occupations have
risen from 5 percent of the workforce to 25 percent.
To address these challenges states and professionals
have turned to occupational and interstate compact
licensures. The interstate compact is a contract
between two or more states that carries the force of
statutory law and allows the states to perform certain
actions to observe certain standards and cooperate in
a certain policy area. These compacts create
reciprocal professional license practices between the
states while ensuring there was quality and safety of
services and safeguarding state sovereignty.
These interstate compacts that are before you today
allow Alaska to still have the autonomy that it would
normally have under a normal licensure agreement. Both
the speech pathologists and audiologists licensure
compacts have a privilege to practice model. A person
obtains their license in their home state (i.e., their
state of residence here in Alaska) and the licensee
can then use their home state license to apply for
privilege of practice in another member state. When
that person is actually practicing here in Alaska they
are subject to our laws including the scope of
practice here in our state as well and they also must
pay for our licensing fees. Alaska must take action to
revoke a person's privilege to practice within our
state. If a person's privilege to practice is
suspended in one or more states, it's suspended in all
member states. Only the home state can take actions
against that home state license.
The compacts provide a greater public protection
through data sharing. Currently, if an Alaska license
is penalized in another state, Alaska will never know.
But under the interstate compact, a license would
receive notification that the licensee broke laws in
another state while practicing under a privilege. A
bad actor license in another state would also not be
able to obtain a privilege to practice in Alaska until
the infraction has been cleared. Knowing when our
licensees are misbehaving is a strong tool that we
currently do not have at our disposal. Under this
compact Alaska can collect fees for those incoming
providers to take action and a privilege to practice
in our state, the providers must work under that scope
of practice and the state will have enhanced access to
report bad actors. Nothing in this bill prevents out
of state persons from going through the regular
licensing process if they choose. They do not have to
go through the compact licensure process.
We've heard from both the audiologists and speech
language pathologists are swamped. We need every
incentive for them to become licensed in our state and
this compact is one of those incentives. Adopting
Senate Bill 75 in its entirety, the audiologists and
speech language pathologists interstate compact will
help us recruit those providers to our state,
strengthen our licensing, sharing of information
between those bad actors in our state, allowing those
patients moving between the state compact to maintain
within their established providers and increase Alaska
access to care all while maintaining our state
sovereignty. Over the next ten years Alaska's
healthcare was expected to have more jobs than any
other sector in our state. Our speech language
pathologists are expected to grow by 11 percent in
that time and we're not growing nearly enough of our
own providers in those fields to meet those demands.
6:59:40 PM
Senator Wilson turned the bill introduction back to Ms.
Martin.
Ms. Martin relayed that audiologists and speech language
pathologists both provide essential care at all stages of
life, but they were especially essential to young children
and older adults. She found it interesting to learn more
about the professions beyond knowing that audiologists help
with hearing issues and speech language pathologists help
with speech issues. She did not know that people always
fully understand the issues that came with difficulties in
those areas. She explained that hearing loss and balance
disorders were among the most commonly diagnosed health
conditions worldwide. She detailed that audiology care was
essential in maintaining quality of life. Timely access to
audiology care was essential in early intervention and
hearing issues for children and in maintenance and
independence for elderly individuals. Speech language
pathologists helped young people with speech development
and helped others recover from stroke or traumatic brain
injuries. She shared that speech language pathologists
helped people with swallowing issues. She elaborated that
if someone did not have the ability to eat independently it
could severely impact their quality of life and ability to
maintain independence. She noted there were invited
testifiers available online.
Co-Chair Foster moved to invited testimony.
7:01:31 PM
NANCY LOVERING, MEMBER, ALASKA SPEECH AND HEARING
ASSOCIATION, ANCHORAGE (via teleconference), testified in
support of SB 75. She shared that she had a private
practice in speech pathology for pediatrics for over 25
years. She relayed there were chronic shortages in speech
language pathologists and patient waiting lists were as
long as two years. The compact would help her as a business
owner to bring employees into the state. She provided care
to military members and their families and received
requests to continue care for children when the family left
the state. She explained she was happy to do so, but the
process of licensing across states was time consuming and
expensive. She was currently licensed in six states outside
of Alaska and frequently it caused a delay or gap in
continuity of care for children. For example, it took her
over a year to get licensed in one state for a family who
had moved out of Alaska.
Ms. Lovering relayed that there was not a speech
pathologist or audiologist licensing board in Alaska;
therefore, the level of consumer protection was a bit
different. She explained that consumer complaints went to
the state level. Due to her work with the Alaska Speech-
Language-Hearing Association and the American Speech and
Hearing Association she had occasionally received phone
calls with questions regarding consumer complaints and how
it fit in with the scope of practice and ethics. She
explained that it was not possible to know what ended up
happening with some of the consumer complaints because
there was no definitive process in Alaska. Much of the
time, she had to refer people to contact the national
association for more assistance. She believed the compact
and its ability to provide consumer protection was
extremely welcomed. She shared that she worked directly
with children with swallowing disorders and there was a
need for more practitioners to work with the population.
She stressed that the list of kids needing care was very
long and it was heartbreaking to hear stories and
professionals did their best to care for everyone possible.
She thanked the committee for its time.
7:06:41 PM
SUSAN ADAMS, DIRECTOR OF STATE AFFAIRS, AMERICAN SPEECH
LANGUAGE HEARING ASSOCIATION, MARYLAND (via
teleconference), explained that she held an ex officio seat
on the Audiology and Speech Language Pathology (ASLP)
Compact Commission. She relayed that the interstate compact
was designed to allow audiologists and speech language
pathologists to practice across state lines and via
telehealth without having to obtain an additional license
in every state. The compact would increase access to care
for individuals with communication disorders, facilitated
continuity of care when clients relocated or traveled, and
increased consumer protection by expanding the
prosecutorial net for bad actors. The compact allowed
greater access to currently underserved and isolated
populations. Additionally, the compact allowed military
spouses to maintain their licensure more easily across
state lines.
Ms. Adams shared that the bill was supported by the Alaska
Speech-Language-Hearing Association. She detailed that the
ASLP commission was currently in the process of developing
a system expected to be operational later in the year. She
explained that passing the legislation would allow Alaska
to appoint two delegates with two votes to the compact
commission, the national joint governmental agency
responsible for administering compacts. The compact
provided guardrails to ensure the commission never exceeded
its authority. There were currently 31 member states in the
compact with several states currently in the legislative
process.
7:09:00 PM
Co-Chair Foster OPENED public testimony on SB 75. He
provided the email address for public testimony.
Co-Chair Foster CLOSED public testimony.
7:09:41 PM
Representative Coulombe thanked Senator Wilson for putting
the bill forward. She relayed that the committee had also
been hearing a nursing compact bill. She had received
numerous emails in support of SB 75, while the nursing
compact seemed to be more contentious. She asked for
comment.
Ms. Martin responded that the nurse licensure compact was
one of the first interstate licensure compacts developed
and used a multi-state license model. She explained there
was no way for the state to know who was coming in and out
or it was much more difficult to track. She explained that
SB 74 and SB 75 operated until a privilege to practice
model. She elaborated that a person would obtain their
license in their home state and could then go online to
register individually for privileges to practice in other
states. The registration was reported in the specific state
and the privilege to practice could be revoked by the
state. She added that the revocation could also be reported
to the practitioner's home state for action against the
underlying license.
Representative Ortiz asked where the audiologist and speech
language pathologist shortages were the most prevalent
(e.g., healthcare facilities, schools).
Ms. Martin responded that the need was everywhere. She
emphasized there were substantial vacancies in many types
of facilities. She underscored that the need for healthcare
providers, including audiologists, speech language
pathologists, and physical therapists, was expected to grow
faster than any other sector in the state over the next ten
years.
7:12:34 PM
Representative Hannan asked how many speech language
pathologists were currently practicing or licensed to
practice in Alaska.
Ms. Martin deferred the question to the Department of
Commerce, Community and Economic Development (DCCED).
SYLVAN ROBB, DIRECTOR, CORPORATIONS, BUSINESS, AND
PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE, COMMUNITY,
AND ECONOMIC DEVELOPMENT, replied that in FY 23 there were
956 audiologists and speech language pathologists in
Alaska. She noted there were far more speech language
pathologists relative to audiologists.
Representative Tomaszewski considered changes under the
bill. He remarked that the first change was a new section
that exempted currently licensed pathologists from a
criminal records check. He asked if it was consistent
through all professional licenses.
Ms. Martin responded it was a change between the original
version of the bill as introduced and the current bill. She
elaborated that Alaska's statutes did not have a criminal
background check. The bill added the background check for
new entrants because it was a requirement of the compact.
She explained that the compact did not require people who
were not interested in entering the compact or current
license holders to go through a background check. As a
result, the bill adjusted the language to ensure DCCED
would not have to go back through and do administrative
work that was not necessary for entering the compact.
Senator Wilson summarized that the legislation was trying
to address the shortage of speech language pathologists and
audiologists in Alaska. He noted there was not an
educational path for speech language pathology or audiology
in Alaska, meaning it was currently necessary to import
professionals. The goal was to help Alaskans and provide
access to healthcare. The ease of access to healthcare was
one of his priorities.
Co-Chair Foster set an amendment deadline for Wednesday,
th
May 8 at 5:00 p.m. for SB 75.
SB 75 was HEARD and HELD in committee for further
consideration.
7:16:40 PM
Co-Chair Foster moved to SB 74. He asked the sponsor to
introduce the bill.
Senator Wilson explained that the physical therapy
licensure compact was an interstate compact that operated
on the privilege to practice model. He relayed there were
individuals online to speak to the profession of physical
therapy as something that anyone could need at any stage in
life. Physical therapy helps individuals maintain strength
and mobility and helped individuals recover from injury and
regain mobility after a stroke or traumatic brain injury.
Physical therapy also helped individuals with conditions
such as multiple sclerosis and cerebral palsy. Access to
physical therapy was important for prevention and recovery
from serious injury and surgery. He highlighted there were
over 100 job postings for the positions. He relayed that
Alaska's schools could only produce 7 to 21 physical
therapists per year.
7:18:22 PM
Co-Chair Foster moved to invited testimony beginning with
Kelly Chick Comstock. He did not see her online.
Ms. Martin did not see Ms. Comstock online. She noted that
Ms. Comstock had been online until midnight the previous
night watching the committee conduct its business. She
appreciated the work and knew it was important to
providers.
Representative Ortiz noted that he heard from Ms. Comstock
at about 11:30 p.m. the previous evening asking if she
would have an opportunity to testify that night. He relayed
that she was a strong supporter of the legislation. He
noted it was a big need in Ketchikan.
7:19:23 PM
JEFF ROSA, COMPACT ADMINISTRATOR, PHYSICAL THERAPY COMPACT
COMMISSION, WASHINGTON, DC (via teleconference),
appreciated the committee's consideration of SB 74. He
relayed that the Physical Therapy (PT) Compact Commission
was an independent governmental entity that currently
consisted of 36 states and D.C. He relayed that each of the
states previously enacted the same legislation the
committee was currently considering. Instead of a multi-
state license model in which an individual license in one
compact state could legally practice in any other compact
state with no notification or requirements to the remote
state, under the PT compact when a licensee wanted to work
in another active compact state (a remote state), the
individual was required to purchase a compact privilege for
the specific remote state. In addition to the fee charged
by the compact commission, each state was also authorized
to charge an additional fee for the purchase of the compact
privilege. He clarified that the compact privilege was the
legal authorization to practice in a remote state.
Mr. Rosa elaborated that although the compact language
authorized the commission to levy on and collect an annual
assessment from each member state, since the formation of
the PT compact in 2016, it had never levied an annual
assessment on member boards. Instead, the sales of compact
privileges had been used to support the operations of the
commission. The PT compact had many benefits for Alaska and
its physical therapy providers. Importantly, as home to
nine military installations, the compact also supported
military families because it greatly improved portability
for military spouses by improving the speed and ease in
obtaining the ability to practice physical therapy when
stationed in Alaska, and for military families from Alaska
stationed in other states. The compact was widely supported
by physical therapists and physical therapy assistants,
including those who live and practice in Alaska. He
appreciated the opportunity to speak.
7:21:37 PM
Co-Chair Foster OPENED public testimony on SB 74. He
provided the public testimony email address.
Co-Chair Foster CLOSED public testimony on SB 74.
Representative Hannan asked how many physical therapists
were currently licensed in Alaska.
Ms. Robb responded that in FY 23 there were 1,559 physical
therapists and 241 physical therapy assistants in Alaska.
Representative Hannan asked if the bill impacted physical
therapy assistants.
Ms. Martin responded in the affirmative.
Senator Wilson expressed appreciation to the committee for
hearing the bill. He relayed that SB 74 was about helping
Alaskans with access to quality healthcare. He stated the
bill could be an option to help with the shortage in
Alaska.
Co-Chair Foster set an amendment deadline of Wednesday, May
th
SB 74 was HEARD and HELD in committee for further
consideration.
th
Co-Chair Foster set an amendment deadline of Monday, May 6
at 5:00 p.m. for HB 149.
HOUSE BILL NO. 232
"An Act relating to retirement benefits and military
service."
7:25:35 PM
Co-Chair Foster asked for a brief recap of the legislation.
RYAN MCKEE, STAFF, REPRESENTATIVE GEORGE RAUSCHER,
explained that the bill allowed permanently disabled
veterans to access their accrued Public Employees'
Retirement System (PERS) retirement benefits without
penalty. The bill also allowed military service purchased
in accordance with PERS standards to count towards the
credited service requirements for normal retirement.
7:26:38 PM
Co-Chair Foster opened public testimony on HB 232. He
provided the email address for public testimony.
Co-Chair Foster CLOSED public testimony.
7:27:44 PM
Co-Chair Foster asked for a review of the one fiscal note
from the Department of Administration [he read the OMB
component number and date, which he corrected after the
following speaker].
KEVIN WORLEY, CHIEF FINANCE OFFICER, DIVISION OF RETIREMENT
AND BENEFITS, DEPARTMENT OF ADMINISTRATION, reviewed the
indeterminate fiscal note from the Division of Retirement
and Benefits. He explained that in prior committee meetings
there was an indication that approximately 48 members could
be eligible for the benefit; however, there was not enough
information available about the members and their military
service to use in the calculation for their pension
benefits. If the legislation passed, the cost in the future
would ultimately be included in the past service cost and
would pass on through to the additional state contribution
paid by the state. The cost would also be included in the
state contribution rate calculated by the actuaries and
adopted by the Alaska Retirement Management Board (ARMB).
Co-Chair Foster clarified that the fiscal note's OMB
component number was 64 and it was dated February 13, 2024.
Mr. Worley agreed.
Mr. McKee thanked the committee for hearing the bill.
Co-Chair Johnson MOVED to REPORT HB 232 out of committee
with individual recommendations and the accompanying fiscal
note.
Representative Josephson OBJECTED. He read the last two
sentences of the fiscal note: "Implementing this bill's
provision will require an actuarial analysis due to the
impact on the PERS defined benefit system. DRB submits an
indeterminate fiscal note until such time as an actuarial
analysis can be completed." He would lift his objection,
but he found it ironic that the two sentences were
essentially cited as reasons to pause other retirement
benefit bills. He WITHDREW the OBJECTION.
HB 232 was REPORTED out of committee with nine "do pass"
recommendations and with one previously published
indeterminate fiscal note: FN1 (ADM).
SENATE BILL NO. 104
"An Act relating to appropriations to the civil legal
services fund."
7:31:42 PM
SENATOR FORREST DUNBAR, SPONSOR, introduced himself.
JAMES HOLZENBERG, STAFF, SENATOR FORREST DUNBAR, introduced
himself.
Senator Dunbar thanked the committee for hearing the bill.
He explained that SB 104 increased the court filing fees
that could go to the Alaska Legal Services Fund from 10
percent to 25 percent. He shared that when he had been in
law school, he had an internship where he worked with a
young attorney on a child custody case where a father had
abused and neglected a little girl to the point where she
almost died. The attorney he interned with had been trying
to win custody for an aunt and uncle. The organization was
the Alaska Legal Services Corporation (ALSC) and the
attorney was Maggie Humm, who was now the interim director
of the agency. He relayed that Ms. Humm would provide
testimony on how the fund worked and the work performed by
ALSC. He detailed that ALSC did critical housing work,
veterans benefits, elder abuse and elder care cases, and
was the largest provider of free legal services to
survivors of domestic violence in the state. Demands on
ALSC had increased dramatically in the past few decades and
their state funding was decreasing. He relayed that the
bill had passed the other body unanimously. He expressed
gratitude to the committee for hearing the bill.
Co-Chair Foster moved to invited testimony.
Senator Dunbar noted that in addition to Ms. Humm there had
been a second invited testifier, Nicole Borromeo with the
Alaska Federation of Natives; however, Ms. Borromeo was in
D.C. and was currently unavailable.
7:34:45 PM
MAGGIE HUMM, EXECUTIVE DIRECTOR, ALASKA LEGAL SERVICES
CORPORATION, thanked the committee for hearing the bill.
She thanked Senator Dunbar for carrying the legislation in
the Senate and Representative Stanley Wright carrying the
companion bill in the House. She explained that ALSC was a
nonprofit law firm that provided free critical civil legal
aid to lower income Alaskans across the state for close to
60 years. The services helped protect Alaskans from
domestic violence and other forms abuse, protected Alaskans
livelihoods and benefits to which they are legally
entitled, and helped Alaskans gain access to healthcare and
maintain safe housing. In the previous state fiscal year,
ALSC provided legal assistance in over 5,000 cases across
its 15 locations throughout the state, impacting over
13,000 Alaskans and 196 communities. The organization's
services focused on helping the most vulnerable Alaskans.
In the past year, nearly one-third of ALSC's clients were
impacted by domestic violence, nearly one-third of ALSC's
clients were seniors, and over one-third were living with
one or more disabilities. She relayed that ALSC's work was
preventative and solved problems upstream and its outcomes
were measurable.
Ms. Humm shared that a study commissioned by the Alaska
Mental Health Trust Authority (AMHTA) found that Alaska had
a five to one return on investment, which brought cost
savings to communities and dollars to Alaskan households.
Despite the hard work, Alaska continued to face a crisis
when it came to Alaskans being able to identify help for
their civil legal problems. The past year, ALSC had to turn
away hundreds of families who sought assistance with
compelling needs. Due to a lack of resources the
organization turned away approximately one family for every
family it helped. Unaddressed legal problems resulted in a
cascade of issues for families, further destabilizing them
and putting the most vulnerable (i.e., children and elders)
at risk. The client population continued to grow annually
and funding had not kept pace. She elaborated that ALSC's
state funding was roughly 58 percent of its appropriation
40 years back for triple the eligible population.
Ms. Humm continued that in the current state fiscal year,
ALSC's total state appropriation was $700,001, including
$400,000 from the general fund and the remainder from the
Alaska Legal Services Fund. She explained that the money
from the fund varied greatly over the years from zero to
$360,000. The amount appropriated in the current state
fiscal year was $301,000 and the funds for FY 25 were
slated to drop slightly to $296,000. The fund was
established as a special account in the general fund in
2007 to provide additional money for civil legal aid. She
relayed that the fund was last amended in 2018 with near
unanimous support after widespread bipartisan
acknowledgement that ALSC was severely underfunded. At the
discretion of the legislature, the fund was funded by a
total of 10 percent of the court system's filing fees and
the state's share of any punitive damage awards. She
explained that SB 104 sought to increase the amount of the
court system filing fees from 10 percent to 25 percent.
Ms. Humm relayed that ALSC was doing as much as possible
with its current resources. Every dollar was extremely
important and the organization was incredibly efficient.
She detailed that 80 percent of its cases were resolved
without going to court, which saved the state money. She
reported that an average case cost ALSC less than $600. The
organization leveraged its funding with thousands of
dedicated volunteer hours and in some regions there were
things like donated office space. The organization also
made numerous resources available to the public to increase
their access to the justice system by conducting outreach
and education events. The organization was implementing
innovative ways to address the justice crisis, such as
through its Community Justice Worker Program, which had
garnered national attention.
Ms. Humm shared a story about a young woman with an infant
son who came to ALSC for help. Her boyfriend had started
abusing her when she was 16 and the abuse had been
escalating and taking place in front of the baby and
causing injuries. The organization helped the young woman
get a one-year protective order, custody of the baby, child
support, and supervised visitation for the father. She
stressed that civil legal aid was critical to those who
needed it, often the lifeline; however, the cost and demand
was increasing. She relayed that civil legal services help
to ensure fairness and equal justice guaranteed by state
and federal constitutions. She stated that if the
organization's funding did not keep pace, it would be
forced to turn away hundreds of individuals. She emphasized
that SB 104 was critical to adequately fund civil legal
services, ensuring a fair and equal system, and addressing
the justice crisis in Alaska. She thanked the committee for
its time and consideration.
7:41:09 PM
Co-Chair Foster thanked Ms. Humm for her testimony.
Representative Coulombe asked if ALSC received money from
nonprofits.
Ms. Humm responded that ALSC received money from many
sources including state, federal, local boroughs and
municipalities, tribal, private foundation funding, and
private donations, but not necessarily from other
nonprofits.
Representative Coulombe asked how lawyers got into the
field as it was not something that was highly paid. She
asked if it was through internships or lawyers coming
directly out of law school.
Mr. Humm responded that lawyers came to ALSC in a variety
of ways including starting out as an intern and coming off
of judicial clerkships. The organization's pay was
significantly lower than what the state or the private
sector paid, which meant attracting lawyers could be
difficult. She relayed that lawyers coming to work from the
agency often came from out of state because Alaska did not
have a law school.
Representative Coulombe shared that she had been involved
with the Council on Domestic Violence and Sexual Assault
(CDVSA) and had attended one of its meetings in Cordova.
She had learned at the town hall meeting that one thing
that everyone wanted was legal services pertaining to
domestic violence. She relayed that there was a lot of
conversation about CDVSA providing more money for that
area. She asked what the criteria were for ALSC to accept a
case.
Ms. Humm responded that ALSC was required to screen for
income and asset eligibility. The organization was also
required to screen for citizenship and could only represent
someone without proper documentation if they were a victim
of domestic violence or human trafficking and the case
would have to be a priority for ALSC offices.
Representative Coulombe asked what she meant by a priority.
Ms. Humm responded that the ALSC board of directors set the
case priorities, which were reviewed annually.
7:44:53 PM
Representative Tomaszewski asked for ALSC's overall budget.
Ms. Humm replied that ALSC's annual budget was
approximately $9.5 million in the current year.
Representative Stapp asked who was getting legal services
from ALSC. He asked if the individuals were women suffering
from domestic violence and looking for recourse or
individuals dealing drugs or squatters in homes. He asked
about the typical profile of individuals receiving
services.
Ms. Humm responded that the people receiving services
varied, but there were criteria that had to be met. The
individuals had to meet certain low income and asset
guidelines. She detailed that at least one-third of ALSC's
clients were impacted by domestic violence and those
individuals sought help with a variety of things including
protective orders, divorce, custody, problems with an
employment issue, income, and other things. She did not
believe the organization was representing squatters. The
organization did landlord/tenant work, but the law in
Alaska did not support squatting and was very favorable to
landlords. She detailed that only 3 to 4 percent of ALSC's
landlord/tenant cases made it to the point of a contested
court decision. She elaborated that approximately 96
percent of the landlord/tenant cases involved giving
someone advice free of service or negotiating with
landlords. She remarked that the cases were not long and
drawn out. One-third of ALSC's clients were seniors and
were assisted with a wide variety of things including elder
abuse, end of life planning, and advanced directives. She
noted that over one-third (close to 40 percent) of the
organization's clients were living with one or more
disabilities. The individuals were not necessarily coming
to see ALSC in connection with their disabilities, but
disabilities could also be impacting their ability to
address a legal problem. Often individuals may come to ALSC
for help with benefits they were legally entitled to but
were for some reason facing a challenge receiving.
7:48:19 PM
Representative Josephson thanked Ms. Humm for her work. He
shared that he had an externship in law school in
Pennsylvania and had done some legal services work on
social security disability claims. He surmised that ALSC
did some of that type of work.
Ms. Humm confirmed that ALSC worked with social security
disability or supplemental security issues.
Representative Josephson assumed that ALSC would not refer
to a holdover tenant as a squatter.
Ms. Humm agreed. She believed the term "squatters" had been
sensationalized through out of state stories. It was not
the issue in Alaska that may be seen in other states that
were highly favorable to tenants. Alaska was not seeing
situations where people were holding over for weeks,
months, or years because eviction proceedings in Alaska
were very quick. She reiterated her earlier testimony that
only 3 percent of the landlord/tenant cases seen by ALSC
went to a contested court decision. Most of the
landlord/tenant work performed by the organization was
quick and included advice, letters, and negotiation.
Co-Chair Foster asked if Ms. Humm had stated that ALSC
assisted people with supplemental security income (SSI)
issues.
Ms. Humm responded affirmatively.
Co-Chair Foster shared that he had been in Gambell, Alaska
the previous week and had spoken with a low income
constituent in need of help. He now knew exactly who to
reach out to.
Representative Coulombe asked if ALSC was the only one
taking money from the civil legal services fund. She
wondered if funding went to other organizations as well.
Senator Dunbar replied that he did not know. He deferred
the question to Ms. Humm.
Ms. Humm responded that she was not aware of other
organizations. She believed ALSC was the sole beneficiary
of the civil legal services fund.
7:51:28 PM
Representative Hannan asked for verification that ALSC did
not represent people in criminal cases or class action
litigation.
Ms. Humm responded in the affirmative. The organization was
prohibited by federal regulation from participating in
certain types of cases including but not limited to
criminal work and class actions.
Co-Chair Foster asked Senator Dunbar for any closing
remarks.
Senator Dunbar clarified his earlier statement that Ms.
Borromeo was an ALSC board member. Ms. Borromeo was not a
member of the board. Additionally, he spoke to an earlier
question from Representative Coulombe about why lawyers
chose to work at ALSC. He believed Ms. Humm was being
humble in her response. He relayed that almost every lawyer
working at ALSC would make substantially more money working
elsewhere. He relayed that ALSC tried to pay a good living
wage, but people remained because they loved the work and
helping people.
SB 104 was HEARD and HELD in committee for further
consideration.
th
Co-Chair Foster announced the amendment deadline for May 8
at 5:00 p.m.
7:53:45 PM
CS FOR SENATE BILL NO. 118(FIN)
"An Act relating to critical and essential minerals."
7:54:28 PM
Co-Chair Foster welcomed Senator Merrick and asked her to
introduce the bill.
SENATOR KELLY MERRICK, SPONSOR, introduced herself and
thanked the committee for hearing the bill. She introduced
the legislation with prepared remarks:
Senate Bill 118 was crafted alongside the Department
of Natural Resources, the Department of Commerce,
Community and Economic Development, industry, and
stakeholders. It directs the state to assess our
critical mineral potential and identify strategies to
attract investment. The capital budget contains $2
million plus a $7 million federal match for critical
mineral mapping, so Alaska needs a strategic plan.
Critical minerals are things like lithium, copper,
cobalt, zinc, and more. These critical minerals are
key components of modern technology like the cell
phones and microwaves that we use every day. We need
to ensure the world can continue to access these
resources and Alaska can be the most valuable source
for critical minerals. Demand will continue to
increase as renewable energy development grows. These
minerals are needed in emerging technologies like
electric vehicles and solar panels, as well as in our
national defense systems. Communist China is home to
the world market for the extraction and processing of
critical minerals. Currently, they dominate 60 percent
of supply and 85 percent of refining.
Mr. Co-Chair, this is unacceptable. It is crucial to
reduce our reliance on adversarial nations and produce
these minerals here at home. Senate Bill 118 passed
the other body with unanimous bipartisan support. It
has the potential to increase investment in Alaska and
provide the framework for us to lead the United States
to critical mineral independence.
Senator Merrick relayed that her staff was available to
provide a sectional analysis or answer questions.
Co-Chair Foster requested to hear the sectional analysis.
7:56:48 PM
KERRY CROCKER, STAFF, SENATOR KELLY MERRICK, went through
the sectional analysis (copy on file):
Section 1: Adds a new section to uncodified law to
produce two reports:
1. Gives legislative intent that the State
develops a strategy to encourage
exploration, development, production refining,
and Value -added manufacturing of critical
minerals in the state.
2. The Department of Natural Resources shall
compare Alaska's current and potential critical
mineral production to national and international
production, including regulation, permitting, and
incentives. The report should identify strategies
to increase exploration and development over the
next three, five, and ten years.
3. The Department of Commerce, Community, and
Economic Development shall identify the state's
role in innovation, manufacturing, and
transportation to support the global green energy
transition and allows for this report to be
contracted out.
7:58:35 PM
Senator Merrick thanked the committee for its time. She
relayed that SB 118 was an effort to attract investment,
create jobs, boost the state's economy, and keep America
safe.
Co-Chair Foster thanked the sponsor and her staff. He set
th
an amendment deadline for May 8 at 5:00 p.m.
SB 118 was HEARD and HELD in committee for further
consideration.
7:59:11 PM
AT EASE
8:03:01 PM
RECONVENED
HOUSE BILL NO. 122
"An Act authorizing the Alaska Railroad Corporation to
issue revenue bonds to finance the replacement of the
Alaska Railroad Corporation's passenger dock and
related terminal facility in Seward, Alaska; and
providing for an effective date."
8:05:13 PM
Co-Chair Foster asked for a brief recap of the legislation.
Representative Tomaszewski explained that the original bill
started out as a bond authorization for the Railroad
Corporation to build a new dock and terminal facility in
Seward. He explained that a couple of amendments had been
made throughout the bill process including the addition of
a $58 million bond for the complete phase 1 of the
Mackenzie railroad extension and the authorization of a
$300 million bond for Alaska Industrial Development and
Export Authority (AIDEA) for critical minerals and rare
earth metals.
Co-Chair Foster noted that Representative Cronk had
rejoined the meeting via teleconference.
8:06:35 PM
Representative Ortiz asked what the $58 million bond that
had been added to the legislation was for.
Representative Tomaszewski replied that the bill authorized
the Alaska Railroad to issue a bond up to $58 million to
complete phase 1 of the Port Mackenzie rail extension. He
stated it was not a bandaid; it merely gave the railroad
the authority to exercise the ability to complete phase 1
of the extension.
Representative Ortiz asked if the Alaska Railroad or the
state would be the backer of the bond.
Representative Tomaszewski assumed that prior to the
issuance of any bond, the railroad would find an anchor
client to use the port to pay for the rail extension,
somewhat similar to the Seward dock. He believed one of the
cruise lines would be the anchor client in Seward and the
bond authorization for the Seward port and terminal
facility had zero fiscal impact on state funds. The project
would be paid for entirely from the cruise ship client.
8:08:27 PM
Representative Josephson MOVED Amendment 1 to HB 122 33-
LS0623\S.3, Walsh, 4/30/24:
Page 1, lines 3 - 7:
Delete "authorizing the Alaska Railroad Corporation to
issue revenue bonds to finance the completion of the
Port Mackenzie Rail Extension in Point Mackenzie,
Alaska; authorizing the Alaska Industrial Development
and Export Authority to issue bonds to finance
infrastructure that supports development of critical
mineral and rare
earth element projects;"
Page 2, line 13, through page 3, line 26:
Delete all material.
Renumber the following bill section accordingly.
Co-Chair Foster OBJECTED for discussion.
Representative Josephson highlighted that Mr. Bill O'Leary
with the Alaska Railroad had testified on the legislation
exclusively about improvements to the Seward dock. He added
that the bill sponsor noted that the original bill
pertained to the Seward dock. He shared that when he had
asked Mr. O'Leary how much the road under Section 2 of the
bill (that would be deleted by Amendment 1) would really
cost, Mr. O'Leary had testified that he would need $275
million to $300 million. He was not certain what the $58
million would do. He stated that Mr. O'Leary had never
testified that he really wanted Section 2 in the bill. He
did not know how Section 2 had come to be included in the
bill. He asked for members to support its deletion by
adopting Amendment 1.
8:09:52 PM
Representative Tomaszewski was in opposition to the
amendment. He stated that the bill did not force the Alaska
Railroad to utilize the bond to finish phase 1. He did not
have a complete understanding of how many phases were
needed to complete the rail extension to Port Mackenzie. He
knew it was an important piece of infrastructure that would
contribute to the state's economic development. He was
amenable to including the section in the bill.
Co-Chair Foster MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Josephson, Galvin, Hannan, Ortiz, Edgmon
OPPOSED: Tomaszewski, Cronk, Coulombe, Stapp, Johnson,
Foster
The MOTION to adopt Amendment 1 FAILED (5/6).
[Note: Action on Amendment 1 was rescinded later in the
meeting and the amendment was subsequently adopted. See
approximately 8:21 p.m. for details.]
8:11:59 PM
Representative Josephson MOVED Amendment 2 to HB 122 33-
LS0623\S.4 (Walsh, 5/1/24):
Page 1, lines 5 - 7:
Delete "authorizing the Alaska Industrial Development
and Export Authority to issue bonds to finance
infrastructure that supports development of critical
mineral and rare earth element projects;"
Page 3, lines 7 - 26:
Delete all material. 8
Renumber the following bill section accordingly.
Representative Stapp OBJECTED.
Representative Josephson explained that earlier in the day
an opinion editorial had been published in the Alaska Daily
News (AND) written by former Alaska Senate President Rick
Halford titled "It's time for the Legislature to Restore
Alaska's Constitutional Balance." He explained that the
entire piece was about how AIDEA was not well monitored and
had grown to be independent of oversight. He stated it
stood to reason that Mr. O'Leary would want a railroad
because he ran the railroad, but there had been zero
indication that he also wanted AIDEA's bonding authority to
be included in the package. His concern with Section 3 of
the bill was that it spoke to the very thing former Senator
Halford feared. He asked members to support the amendment.
8:13:56 PM
Representative Tomaszewski opposed the amendment. He noted
it was by coincidence that the previous bill heard by the
committee was SB 118, which related to critical and
essential minerals. The specific section of the bill
[Section 3] authorized AIDEA to issue $300 million in bonds
for statewide critical minerals and rare earth metals. He
remarked that Senator Merrick had made a good point about
rare earth minerals coming to the U.S. from other
countries. He recognized the section was not part of the
original bill, but he did not oppose its inclusion.
Representative Hannan supported the amendment. She opposed
the blanket authority given by the section [to AIDEA]. She
remarked that it was a very large amount. She stated that
she could vote for it if it was bonding for the Niblick
project and it was delineated for specific minerals at a
given price, but it was not. She had grave concerns that
the board authorized projects at $300 million only to find
out there was a different critical mineral the legislature
did not have the bonding authority to go for because it
gave the authority to AIDEA without having reviewed it. She
stated it was the check and balance, which the legislature
was supposed to have over AIDEA.
Co-Chair Edgmon stated it was his first exposure to the
legislation. He recalled when AIDEA had to get bonding
authority from the legislature for $10 million, which had
increased to $25 million. He understood that AIDEA was now
seeking a larger number in a different bill. He highlighted
that the first two words in Section 3 of the bill were
"legislative approval," which he found to be an oxymoron.
He stressed that the legislature was not approving anything
other than authorizing $300 million for AIDEA to do what it
wanted. He did not support the legislature's appropriation
powers being taken away. He was astounded by the dollar
amount. He supported the message to some degree in former
Senator Halford's editorial. He stressed that the
legislature should never give anyone $300 million to go do
what they wanted to do. He acknowledged the cause was
worthy, but there should be some legislative direction. He
was a hard no on the inclusion of Section 3. He strongly
supported the amendment.
Co-Chair Foster spoke in support of the amendment. He
thought AIDEA had a public image problem. He had been
contacted by a number of his constituents about the agency.
He noted that the issue arose with the agency's prior
leadership. He had faith in the current executive director
who he believed was very capable and he was looking forward
to hopefully a new direction. Until AIDEA was able to fix
its image, he thought it was too much money. He believed
the agency needed to rebuild the public's trust prior to
receiving authorization for any additional funding.
8:19:36 PM
Representative Coulombe remarked that it was difficult for
her to vote against anything pertaining to infrastructure
or resource development. She understood that AIDEA was
controversial. She ultimately wanted the original bill to
pass and would hate to see the amendment kill the bill on
the House floor. She did not believe the original bill was
the right place for [the AIDEA bond authorization] because
the Seward project was very important. She would likely
vote in support of Amendment 2.
Co-Chair Edgmon echoed Representative Coulombe's comments.
He believed the underlying purpose of the legislation rose
above any speculative amendment like the $300 million [in
bond authorization to AIDEA]. He stated it had guided his
no vote on Amendment 1 as well.
Representative Stapp MAINTAINED the OBJECTION.
A roll call vote was taken on the motion.
IN FAVOR: Ortiz, Josephson, Hannan, Coulombe, Galvin,
Edgmon, Foster
OPPOSED: Tomaszewski, Cronk, Stapp, Johnson
The MOTION PASSED (7/4). There being NO OBJECTION,
Amendment 2 was ADOPTED.
8:21:33 PM
Representative Stapp MOVED to RESCIND action on Amendment
1.
Co-Chair Foster asked Representative Josephson if he wanted
to reintroduce Amendment 1.
Representative Stapp stated that the second half of
Amendment 1 included language about critical mineral
infrastructure and AIDEA bonding. He noted the language was
no longer viable due to the passage of Amendment 2;
therefore, he would likely change his vote on Amendment 1.
8:22:21 PM
AT EASE
8:22:39 PM
RECONVENED
Representative Josephson MOVED to ADOPT Amendment 1 (copy
on file)[see 8:08 p.m. for amendment details].
Representative Cronk OBJECTED.
Representative Josephson stated that he had no additional
comments.
Representative Stapp called the question on the motion.
A roll call vote was taken on the motion.
IN FAVOR: Galvin, Ortiz, Hannan, Josephson, Stapp, Edgmon
OPPOSED: Tomaszewski, Stapp, Cronk, Johnson, Foster
The MOTION PASSED (6/5). There being NO OBJECTION,
Amendment 1 was ADOPTED.
Co-Chair Foster noted that Amendments 1 and 2 had both been
adopted. He asked if the bill sponsor would like to make
any comments prior to going to a motion on the bill.
8:24:31 PM
Representative Tomaszewski thanked the committee for all of
the help he had received with the legislation. He looked
forward to moving the bill out and passing it over to the
Senate.
Co-Chair Johnson MOVED to REPORT CSHB 122(FIN) out of
committee with individual recommendations and the
accompanying fiscal notes and with permission for
Legislative Legal Services to make technical and conforming
changes.
There being NO OBJECTION, CSHB 122(FIN) was REPORTED out of
committee with eight "do pass" recommendations and one
"amend" recommendation and with one new zero note from the
Department of Commerce, Community and Economic Development
and one previously published zero note: FN1 (CED).
Co-Chair Foster reviewed the meeting schedule.
ADJOURNMENT
8:27:01 PM
The meeting was adjourned at 8:26 p.m.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 307 Amendments 1 - 8 050324 (2).pdf |
HFIN 5/3/2024 1:30:00 PM |
HB 307 |
| SB 118 Sponsor Statement.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 118 |
| SB 118 cs Summary of Changes.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 118 |
| SB118 Sectional.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 118 |
| SB 187 HCS FIN Amendment Pkt 1-14 050324.pdf |
HFIN 5/3/2024 1:30:00 PM |
SB 187 |
| HB307 Amendment 3 Backup 050324.pdf |
HFIN 5/3/2024 1:30:00 PM |
HB 307 |
| HB 232 Public Testimony Rec'd by 050324.pdf |
HFIN 5/3/2024 1:30:00 PM |
HB 232 |