Legislature(2021 - 2022)
03/10/2022 11:30 AM House WAYS & MEANS
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| Audio | Topic |
|---|---|
| Start | |
| HB260 | |
| HB223 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 260 | TELECONFERENCED | |
| += | HB 223 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
HB 223-REPEALING FUNDS, ACCOUNTS, AND PROGRAMS
12:26:20 PM
CHAIR SPOHNHOLZ announced that the final order of business would
be HOUSE BILL NO. 223, "An Act relating to the curriculum
improvement and best practices fund; relating to the fuel
emergency fund and fuel emergency grants; relating to the
Railbelt energy fund; relating to the Alaska affordable energy
fund; relating to the special Alaska Historical Commission
receipts account; relating to the rural electrification
revolving loan fund and loans from the fund; relating to the
Southeast energy fund and grants from the fund; and relating to
the Exxon Valdez oil spill unincorporated rural community grant
fund and grants from the fund."
12:26:39 PM
CHAIR SPOHNHOLZ moved to adopt Amendment 1 to HB 223, labeled
32-LS0830\B.2, Marx, 3/8/22, which read:
Page 1, line 1, following "Act":
Insert "relating to inactive state accounts and
funds;"
Page 1, following line 8:
Insert new bill sections to read:
"* Section 1. AS 24.20.231 is amended to read:
Sec. 24.20.231. Duties. The legislative finance
division shall
(1) analyze the budget and appropriation
requests of each department, institution, bureau,
board, commission, or other agency of state
government;
(2) analyze the revenue requirements of the
state;
(3) provide the finance committees of the
legislature with comprehensive budget review and
fiscal analysis services;
(4) cooperate with the office of management
and budget in establishing a comprehensive system for
state budgeting and financial management as set out in
AS 37.07 (Executive Budget Act);
(5) complete studies and prepare reports,
memoranda, or other materials as directed by the
Legislative Budget and Audit Committee;
(6) with the governor's permission,
designate the legislative fiscal analyst to serve ex
officio on the governor's budget review committee;
(7) identify the actual reduction in state
expenditures in the first fiscal year following a
review under AS 44.66.040 resulting from that review
and inform the Legislative Budget and Audit Committee
of the amount of the reduction; and
(8) not later than the first legislative
day of each first regular session of each legislature,
(A) conduct a review in accordance with
AS 24.20.235 of the report provided to the division
under AS 43.05.095; and
(B) conduct a review of inactive state
accounts and funds, make recommendations regarding
which inactive state accounts and funds, if any,
should be repealed, and submit an electronic report of
the division's recommendations to the governor, the
president of the senate, the speaker of the house of
representatives, the chair of the finance committee of
each house of the legislature, the senate secretary,
and the chief clerk of the house of representatives,
and notify the legislature that the report is
available.
* Sec. 2. AS 37.07.020 is amended by adding a new
subsection to read:
(f) The governor shall review the report
submitted by the legislative finance division under
AS 24.20.231(8)(B) and may introduce legislation in
accordance with the report."
Page 1, line 9:
Delete "Section 1"
Insert "Sec. 3"
REPRESENTATIVE EASTMAN objected for discussion purposes.
12:26:45 PM
CHAIR SPOHNHOLZ explained Amendment 1 would require that
Legislative Finance Division produce recommendations regarding
which inactive fund should be repealed at the beginning of each
two-year legislative cycle, and the recommendations would be
forwarded to the governor and the legislature for consideration.
She said Amendment 1 would also encourage the governor to
introduce legislation in accordance with the report. While the
legislature can't tell the governor what to do, she noted, the
legislature can encourage the governor to do that. The intent
of the amendment, she stated, is to create a system in which
inactive funds are regularly reviewed and acted upon,
incorporating Representative Kaufman's continuous quality
improvement feedback loop into the process.
REPRESENTATIVE EASTMAN asked what the criteria would be for
making that recommendation, other than the Legislative Finance
Division's opinion. He further asked whether the division would
be encouraged to give as long a list of funds to repeal as
possible or whether there is some other guidance.
12:28:04 PM
REPRESENTATIVE JAMES KAUFMAN, Alaska State Legislature, as prime
sponsor of HB 223, responded that in a general sense it is time
and inactivity or if there is a known lack of need for the fund.
There is some subjectivity to it, he said, but if there had to
be criteria it would be what the fund was created for, whether
it is still needed, and long it has been unused. He advised
that while criteria can be made for it, that would sometimes
still miss things that could be opportunities.
CHAIR SPOHNHOLZ noted that the large list of potential funds in
HB 223 was whittled down through the process of looking at which
ones were practical to close and hadn't had activity. She said
Amendment 1 is crafted broadly and the legislature can decline
to act on any of the recommendations at any time. The amendment
has no automatic closure element, she continued, it is just
asking the Legislative Finance Division to produce a report and
share it with the legislature and the administration to provide
an ongoing feedback loop that is designed to help with being
more effective as a government.
12:29:31 PM
REPRESENTATIVE EASTMAN withdrew his objection. There being no
further objection, Amendment 1 was adopted.
12:29:41 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 2 to HB 223,
labeled 32-LS0830\B.1, Marx, 2/28/22, which read:
Page 1, line 2:
Delete "relating to the Railbelt energy fund;"
Page 1, line 9:
Delete "AS 37.05.520, 37.05.610"
Insert "AS 37.05.610"
REPRESENTATIVE EASTMAN objected for discussion purposes.
12:29:48 PM
REPRESENTATIVE JOSEPHSON explained Amendment 2. He related that
the Legislative Finance Division and the Alaska Energy Authority
(AEA) have raised concerns about repealing the Railbelt energy
fund. There are two projects that are still under the umbrella
of the fund, he said, and the $3 million existing in it recently
came from lapsed funds in those projects. He related that if
those projects lapse funds in the future, the Legislative
Finance Division believes they should go back into the Railbelt
energy fund. The question of repealing the Railbelt energy fund
is a larger one than simply a cleanup of the dormant and
inactive funds, he continued. If the bill's purpose is to
simply be a cleanup bill to repeal inactive funds, he stated,
the Railbelt energy fund should remain as having a modicum of
merit still.
REPRESENTATIVE KAUFMAN suggested that Mr. Thayer be able to
provide AEA's comment on Amendment 2.
12:31:04 PM
CURTIS THAYER, Executive Director, Alaska Energy Authority
(AEA), stated that he agrees with Representative Kaufman and
Representative Josephson on Amendment 2 regarding the Railbelt
energy fund. He related that in 1991 when Bradley Lake
Hydroelectric Project was built, a power sales agreement was
signed with all the utilities including AEA's predecessor but
now AEA. One of the provisions in the 30-year-old document, he
said, is the disposition of payments which states that all
excess payment amounts received from purchasers and all
additional charges paid pursuant to Section 29(b) shall be paid
to AEA for deposit in the Railbelt energy fund. The bonds were
paid off in July [2021], he specified, and AEA with the
utilities can use it for required project work to benefit
Bradley and if there is not identified projects on Bradley that
would improve it then the excess payments, which could be up to
$12.5 million would be deposited into the Railbelt energy fund.
This piece has been silent for 30 years, Mr. Thayer continued,
because there wasn't the ability or the funds available, but
potentially for the next 20 years there could be funds to
deposit in the Railbelt energy fund. He said AEA and the
utilities would prefer to keep the Railbelt energy fund as is as
not to reopen a 30-year-old agreement.
REPRESENTATIVE EASTMAN inquired about the point at which the
current agreement would expire or would need to be renewed.
MR. THAYER replied approximately 2050.
REPRESENTATIVE EASTMAN withdrew his objection. There being no
further objection, Amendment 2 was adopted.
12:33:15 PM
REPRESENTATIVE JOSEPHSON moved to adopt Amendment 3, labeled 32-
LS0830\B.3 Marx, 3/8/22, which read:
Page 1, line 3:
Delete "relating to the Alaska affordable energy
fund;"
Page 1, line 9:
Delete ", 37.05.610"
REPRESENTATIVE EASTMAN objected for discussion purposes.
12:33:18 PM
REPRESENTATIVE JOSEPHSON explained that Amendment 3 is about
37.05.610, the Alaska affordable energy fund, created in 2014 as
part of either House Bill 4 or Senate Bill 138, he believes, on
the large gasline. He paraphrased from AS 37.05.610(a) and (b),
which are written as follows [original punctuation provided]:
(a) The Alaska affordable energy fund is created as a
special account in the general fund. The fund consists
of the amount determined and deposited in the fund
under (b) of this section and interest earned on the
fund balance. The purpose of the fund is to provide a
source from which the legislature may appropriate
money to develop infrastructure to deliver energy to
areas of the state that are not expected to have or do
not have direct access to a North Slope natural gas
pipeline.
(b) The amount to be deposited in (a) of this section
is 20 percent of the revenue received from the state's
royalty gas transported in an Alaska liquefied natural
gas project that remains after the payment to the
Alaska permanent fund under AS 37.13.010.
REPRESENTATIVE JOSEPHSON stated that [this fund] seems like a
good idea on paper, somebody put energy into it eight years ago,
and the gasline is something this administration wants, as did
the previous administration. The interest to be served, he
continued, is infrastructure development off the Railbelt
between Prudhoe roughly and Southcentral Alaska and he doesn't
want to bury this into the historical footnote.
12:35:15 PM
REPRESENTATIVE EASTMAN asked whether some other activity will be
required on the part of the legislature if the state were to
begin using this fund as originally designed or whether it is
just waiting for some change in market forces. He surmised it
would be easy to reactivate this fund or come up with something
better should the legislature need to make changes in the future
to bring this back to life.
REPRESENTATIVE JOSEPHSON answered that things in the books will
be reviewed and those that aren't may not. He posited that it
could be a component part of the larger bill, a deal that was
struck, someone's win that required a sacrifice of other
elements. He said he is inclined to leave it there because it
looks to be in defense of rural Alaska.
12:36:44 PM
REPRESENTATIVE KAUFMAN said he respects the sponsor's argument,
but in a slight rebuttal he would say that it's that instinct
which has perhaps kept so many of these dormant accounts sitting
around. He stated that the bill's only intent is to clean up
that which isn't needed, and he has no strong objection to
Amendment 3.
12:37:39 PM
REPRESENTATIVE EASTMAN spoke to his objection to Amendment 3.
He stated that in looking to create this better process going
forward, the precedents that are set are important. He argued
that the criteria should be focused objectively and on whether
it has a legal effect, not on why a particular bill got into law
or was sponsored by a particular legislator. If it has a legal
effect now like Amendment 2, he said, then he would maybe
support keeping that. But, he continued, if it isn't needed,
isn't being used, or doesn't have a legally beneficial purpose,
then it should be slotted for being removed and then put back at
a different time or in a better way.
12:39:29 PM
REPRESENTATIVE STORY commented that the things brought up by
Representative Eastman are things always taken into account.
With the Alaska affordable energy fund, she said, consideration
must be given to how current is the need, and this is very
current and something the legislature is trying to ensure all of
Alaska has. So, she stated, it seems right to keep that
account.
12:40:04 PM
CHAIR SPOHNHOLZ related that the governor recently announced he
believes Alaska is closer than ever to a gasline. She said that
while she isn't sure she entirely agrees, she understands the
rationale behind leaving this fund on the books. She pointed
out that Amendment 1 creates an ongoing feedback loop, so even
if the committee chooses to leave this fund on the books now, a
mechanism has been created for addressing it in the future.
12:41:09 PM
REPRESENTATIVE EASTMAN maintained his objection to Amendment 3.
12:41:14 PM
A roll call vote was taken. Representatives Wool, Josephson,
Story, and Spohnholz voted in favor of Amendment 3.
Representative Eastman voted against it. Therefore, Amendment 3
was adopted by a vote of 4-1.
12:41:41 PM
CHAIR SPOHNHOLZ announced that HB 223 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 260 Sponsor Statement.pdf |
HW&M 3/10/2022 11:30:00 AM HW&M 4/14/2022 11:30:00 AM HW&M 4/21/2022 11:30:00 AM |
HB 260 |
| HB 260 Sectional Analysis.pdf |
HW&M 3/10/2022 11:30:00 AM HW&M 4/14/2022 11:30:00 AM HW&M 4/21/2022 11:30:00 AM |
HB 260 |
| HB 260 Fiscal Note - OMB.pdf |
HW&M 3/10/2022 11:30:00 AM HW&M 4/14/2022 11:30:00 AM HW&M 4/21/2022 11:30:00 AM |
HB 260 |
| HB 223 Amendment #1, Spohnholz.pdf |
HW&M 3/10/2022 11:30:00 AM |
HB 223 |
| HB 223 Amendment #2, Josephson.pdf |
HW&M 3/10/2022 11:30:00 AM |
HB 223 |
| HB 223 Amendment #3, Josephson.pdf |
HW&M 3/10/2022 11:30:00 AM |
HB 223 |
| HB 260 Presentation.pdf |
HW&M 3/10/2022 11:30:00 AM HW&M 4/21/2022 11:30:00 AM |
HB 260 |
| HB 223 v. B Amendments #1-3 HW&M Final Votes 3.10.22.pdf |
HW&M 3/10/2022 11:30:00 AM |
HB 223 |