03/20/2012 01:30 PM House FINANCE

HOUSE BILL NO. 196                                                                                                            
                                                                                                                                
     "An Act relating  to the power project fund  and to the                                                                    
     bulk  fuel revolving  loan  fund;  establishing a  bulk                                                                    
     fuel  loan  account  and  making  the  bulk  fuel  loan                                                                    
     account and the bulk  fuel bridge loan account separate                                                                    
     accounts  in   the  bulk  fuel  revolving   loan  fund;                                                                    
     providing for  technical assistance to  rural borrowers                                                                    
     under the  bulk fuel  bridge loan program;  relating to                                                                    
     the  administration and  investment  of  the bulk  fuel                                                                    
     revolving loan  fund by the division  in the Department                                                                    
     of  Commerce,   Community,  and   Economic  Development                                                                    
     responsible  for community  and  regional affairs;  and                                                                    
     providing for an effective date."                                                                                          
                                                                                                                                
1:40:36 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough MOVED to  ADOPT the proposed committee                                                                    
substitute    for   HB    196,   Work    Draft   27-LS0529\I                                                                    
(Kirsch/Nauman, 3/20/12) as a working document.                                                                                 
                                                                                                                                
Co-Chair Stoltze OBJECTED for the purpose of discussion.                                                                        
                                                                                                                                
JOE  MICHEL, STAFF,  REPRESENTATIVE BILL  STOLTZE, explained                                                                    
the additions in  the new CS and stated that  it offered two                                                                    
changes from  the previous version, which  committee members                                                                    
had examined  earlier in the  day. He  pointed to page  7 of                                                                    
the bill and related that  the effective date was changed to                                                                    
January 1, 2013 from January 1, 2012.                                                                                           
                                                                                                                                
Co-Chair   Stoltze  inquired   why  the   date  change   was                                                                    
necessary.  Mr.  Michel  replied  that  certain  regulations                                                                    
needed  to be  adopted and  that the  additional year  would                                                                    
provide the  Department of Commerce, Community  and Economic                                                                    
Development (DCCED) with time to make the changes.                                                                              
                                                                                                                                
Co-Chair  Stoltze WITHDREW  his  OBJECTION.  There being  NO                                                                    
further OBJECTION, Work Draft 27-LS0529\I was ADOPTED.                                                                          
                                                                                                                                
REPRESENTATIVE BRYCE EDGMON, SPONSOR,  hoped that Mr. Teal's                                                                    
upcoming discussion  on the new  fiscal notes  would resolve                                                                    
concerns that the notes should  reflect the "streamlining of                                                                    
the process" that HB 196 was attempting to achieve.                                                                             
                                                                                                                                
DAVID   TEAL,   DIRECTOR,  LEGISLATIVE   FINANCE   DIVISION,                                                                    
discussed the  three fiscal  notes and  related that  he had                                                                    
been working  on the notes at  the behest of the  sponsor in                                                                    
order  to  make  them  appear  the  way  the  committee  had                                                                    
expected.  He  explained  that  the  bill  consolidated  the                                                                    
Bridge and  Bulk Fuel Loan  programs into a  single location                                                                    
and discussed  the first fiscal  note for the  Alaska Energy                                                                    
Authority  (AEA). The  AEA note  was similar  to how  it had                                                                    
originally appeared and  reflected a loss of  revenue in the                                                                    
amount of $57,000  per year because the  bill eliminated the                                                                    
application and  origination fees that were  associated with                                                                    
the loan  program; the  $57,000 would  go back  into general                                                                    
fund.  The  second change  in  the  AEA  note was  that  the                                                                    
$53,600  in  administrative  or operating  costs  that  were                                                                    
associated with  the loan program  would go away  from AEA's                                                                    
budget and  would essentially be  removed from  the process.                                                                    
The second fiscal note from  AEA was for DCCED's Division of                                                                    
Investments; instead  of containing the $86,000  that was in                                                                    
the original fiscal note, the  new note directed the $53,600                                                                    
that used  to be in AEA  to the Division of  Investments. He                                                                    
stated that because AEA would  be retaining its position and                                                                    
also because  the Division  of Investments  wanted to  add a                                                                    
position, the  funding for an  additional position  was kept                                                                    
in the  fiscal note.  He mentioned  that although  the money                                                                    
would not  fully fund the  position, the program  should not                                                                    
require a  dedicated, full-time  position. He  observed that                                                                    
the  cost of  the  additional position  in  the Division  of                                                                    
Investments  would  be charged  directly  to  the Bulk  Fuel                                                                    
Revolving Loan  Fund, instead of going  through the Division                                                                    
of  Community   and  Regional  Affairs  (DCRA);   costs  for                                                                    
additional   positions  used   to  appear   as  inter-agency                                                                    
receipts, but  now the position  could be direct  charged to                                                                    
the program. He  related that the third fiscal  note for the                                                                    
Division of Investments  was zeroed out and did  not need to                                                                    
be transmitted  with the  bill. He  explained that  the note                                                                    
was  zeroed   because  DCRA  currently   provided  technical                                                                    
assistance to  communities that were applying  for loans and                                                                    
that  it  would continue  to  do  so;  DCRA would  still  be                                                                    
helping people with bridge loans,  while the bulk full loans                                                                    
would  be  handled  by  the   Division  of  Investments.  He                                                                    
observed  that  the third  fiscal  note  originally had  the                                                                    
costs  of technical  assistance  changing  from the  general                                                                    
funds  to  the   Bulk  Fuel  Loan  Program,   but  that  the                                                                    
Legislative Finance  Division did not  see any reason  to do                                                                    
it  this   way  because  it   was  DCRA's  role   to  assist                                                                    
communities.                                                                                                                    
                                                                                                                                
1:46:53 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:47:20 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Mr.  Teal  made  a  correction  to  his  previous  statement                                                                    
regarding the  third fiscal note  and clarified that  it was                                                                    
the DCRA fiscal  note that had been zeroed and  did not need                                                                    
to   be  transmitted   with  the   bill;  the   Division  of                                                                    
Investments'  note still  reflected  $53,600. He  summarized                                                                    
that the  net change  in operating cost  was zero,  but that                                                                    
there  was  an  annual  loss  in  general  fund  revenue  of                                                                    
$57,000.                                                                                                                        
                                                                                                                                
Vice-Chair   Fairclough   inquired   if  the   Division   of                                                                    
Investments' note  could be structured to  fund the position                                                                    
at a .50  full-time equivalent (FTE). She  observed that the                                                                    
new position  was only being  partially funded  and wondered                                                                    
whether the fiscal note should  reflect that aspect in order                                                                    
to  inform  the department  of  what  the expectations  were                                                                    
regarding its role  in funding the position.  She queried if                                                                    
there  were   receipts  or  other  dollars   that  might  be                                                                    
available  to "backfill"  the  position if  a  full FTE  was                                                                    
included in the  fiscal note. Mr. Teal replied  that a half-                                                                    
time position  could be added,  but that if the  Division of                                                                    
Investments  needed a  position,  it would  have  to hire  a                                                                    
full-time one. He observed that  the Division of Investments                                                                    
had requested $86,000 for the  position, but that the fiscal                                                                    
note only  funded $53,600; in order  to get the rest  of the                                                                    
funding, the  division would have  to pull money  from other                                                                    
loan  programs. He  stated  that the  fiscal  note funded  a                                                                    
half-time to three-quarter-time position,  but that the note                                                                    
could  be changed  to reflect  a half-time  position if  the                                                                    
committee  so  desired;  however,  changing  the  position's                                                                    
classification did not make a lot of difference.                                                                                
                                                                                                                                
1:50:42 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:50:57 PM                                                                                                                    
RECONVENED                                                                                                                      
                                                                                                                                
Vice-Chair Fairclough wondered  whether the committee should                                                                    
consider   additional  funding   or   compensation  in   the                                                                    
legislation for  the development  of regulations.  She noted                                                                    
that  the   bill  was  asking  for   consolidation  and  was                                                                    
providing   money  for   a  half-time   FTE;  however,   the                                                                    
department would be required to  make new regulations, which                                                                    
would  take time  and money.  She stated  that when  she had                                                                    
originally examined  the fiscal notes, she  had wondered why                                                                    
there was not  more funding, given the  additional work that                                                                    
DCCED  would  have  to  complete.  She  concluded  that  the                                                                    
department would  need to provide information  regarding the                                                                    
regulations  in  an  expedient manner  and  that  additional                                                                    
funding would probably be needed to do so.                                                                                      
                                                                                                                                
Representative Edgmon  stated that  he had been  an employee                                                                    
of DCCED and had worked  with the Division of Administration                                                                    
to draft regulations; he recalled  that the department had a                                                                    
full-time staff  that worked on regulations,  but that there                                                                    
might be a  little more time involved with  "other parts" of                                                                    
HB 196.                                                                                                                         
                                                                                                                                
1:52:11 PM                                                                                                                    
                                                                                                                                
Vice-Chair Fairclough  MOVED to report CSHB  196(FIN) out of                                                                    
committee   with   individual    recommendations   and   the                                                                    
accompanying fiscal notes. There  being NO OBJECTION, it was                                                                    
so ordered.                                                                                                                     
                                                                                                                                
CSHB  196(FIN) was  REPORTED  out of  committee  with a  "do                                                                    
pass" recommendation and with  three new fiscal impact notes                                                                    
by  the  House  Finance  Committee  for  the  Department  of                                                                    
Commerce, Community and Economic Development.                                                                                   
                                                                                                                                
1:52:28 PM                                                                                                                    
AT EASE                                                                                                                         
                                                                                                                                
1:55:05 PM                                                                                                                    
RECONVENED