03/13/2012 03:00 PM House ENERGY

          HB 336-ENERGY ASSISTANCE PROGRAM & VOUCHERS                                                                       
                                                                                                                                
3:19:50 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER announced  that the next order  of business would                                                               
be HOUSE BILL NO. 336,  "An Act establishing an energy assistance                                                               
program in the  Department of Revenue to issue  an energy voucher                                                               
to  Alaska permanent  fund dividend  recipients; and  relating to                                                               
the analysis  and recommendation of an  energy assistance program                                                               
by the governor."                                                                                                               
                                                                                                                                
3:20:06 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  moved to adopt  HB 336, Version  27-LS1403\M, as                                                               
the working  document.  There  being no objection, Version  M was                                                               
adopted.                                                                                                                        
                                                                                                                                
CO-CHAIR  PRUITT  made  a  motion   to  adopt  the  fiscal  notes                                                               
identified  as HB336-DOR-TAX-03-02-12;  HB336-DOA-OAH-3-8-12; and                                                               
HB336-DOR-PFD-03-02-12.                                                                                                         
                                                                                                                                
3:21:45 PM                                                                                                                    
                                                                                                                                
The committee took an at-ease from 3:21 p.m. to 3:25 p.m.                                                                       
                                                                                                                                
3:25:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT made  a motion  to rescind  the motion  to adopt                                                               
Version  M as  the working  document.   Co-Chair Pruitt  moved to                                                               
adopt  HB  336, Version  27-LS1403\A,  as  the working  document.                                                               
There being no objection, Version A was adopted.                                                                                
                                                                                                                                
The committee took an at-ease from 3:25 p.m. to 3:36 p.m.                                                                       
                                                                                                                                
3:26:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER,  for clarification,  asked whether there  was an                                                               
objection to  the motion to  rescind.  There being  no objection,                                                               
it was so ordered.                                                                                                              
                                                                                                                                
3:26:41 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT restated his motion  to adopt HB 336, Version 27-                                                               
LS1403\A, as  the working  document.   There being  no objection,                                                               
Version A was adopted.                                                                                                          
                                                                                                                                
3:26:55 PM                                                                                                                    
                                                                                                                                
JANE  PIERSON, staff  to  Representative  Steve Thompson,  Alaska                                                               
State   Legislature,  speaking   on   behalf  of   Representative                                                               
Thompson,  prime  sponsor,  said   there  are  two  fiscal  notes                                                               
attached to the bill.                                                                                                           
                                                                                                                                
3:27:19 PM                                                                                                                    
                                                                                                                                
CO-CHAIR PRUITT  moved to  adopt two  fiscal notes  identified as                                                               
HB336-DOA-OAH-3-8-12 and HB336-DOR-PFD-03-02-12.   There being no                                                               
objection, the fiscal notes were adopted.                                                                                       
                                                                                                                                
3:27:39 PM                                                                                                                    
                                                                                                                                
MS.  PIERSON introduced  HB 336,  saying the  bill is  an act  to                                                               
establish  an  energy assistance  program  in  the Department  of                                                               
Revenue  to issue  an  energy voucher  to  Alaska permanent  fund                                                               
dividend  (PFD)  recipients; and  relating  to  the analysis  and                                                               
recommendation of  an energy assistance program  by the governor.                                                               
She  related that  Representative  Thompson has  heard from  many                                                               
constituents about the high cost  of energy in Fairbanks, and has                                                               
responded by introducing HB 336,  an energy assistance program to                                                               
issue energy vouchers  to Alaskans who received  a permanent fund                                                               
dividend  paid in  2012.   The high  cost of  energy is  stifling                                                               
development  and  forcing  residents  of the  Interior  to  move.                                                               
Fairbanks, all of  the Interior, and areas  throughout the state,                                                               
are suffering  greatly.  Representative  Thompson is in  favor of                                                               
long-term energy  solutions, but  Alaskans need  immediate relief                                                               
and energy should  be made available to all  Alaskans as directed                                                               
by the  state constitution.   The sponsor  is continuing  to work                                                               
with agencies  and departments to  improve the bill;  however, in                                                               
its  present form,  HB 336  will  provide adults  with an  energy                                                               
voucher redeemable  for 250 gallons  of heating oil,  the natural                                                               
gas  British thermal  unit  (Btu) equivalent  of  250 gallons  of                                                               
heating oil, or  1,500 kilowatts of electricity.   Although there                                                               
are  questions  of  equivalency,  electricity is  not  a  primary                                                               
heating source  for most  residents.   The Department  of Revenue                                                               
(DOR) shall  maintain a  list of  qualified distributors  of oil,                                                               
natural  gas,  and  electricity  that  accept  the  vouchers  for                                                               
payment from the  state.  A person who does  not pay directly for                                                               
energy may  have replacement vouchers  issued in the name  of his                                                               
or her landlord,  and may negotiate with the landlord  to have an                                                               
amount taken  off of their  rent.  A  person may also  redeem the                                                               
voucher for $250.  Section 2  of the bill directs the governor to                                                               
analyze the  energy assistance  program, and  alternatives, prior                                                               
to  10/1/12.    The  governor   will  provide  a  report  to  the                                                               
legislature,  making  recommendations  for an  energy  assistance                                                               
program to be implemented in  fiscal year 2014, that:  correlates                                                               
to  the local  cost of  residential  heating; is  based on  state                                                               
revenue; minimizes  administrative costs; makes  participation of                                                               
fuel distributors voluntary;  includes a hold-harmless provision;                                                               
and includes a provision against fraud.                                                                                         
                                                                                                                                
3:31:40 PM                                                                                                                    
                                                                                                                                
MS. PIERSON continued to explain  the governor must analyze other                                                               
options for an energy assistance  program: a fuel price reduction                                                               
program  managed   through  heating  fuel  distributors,   or  an                                                               
individual account program  featuring applications for assistance                                                               
by  PFD, based  on the  local cost  of energy,  and with  various                                                               
guidelines.                                                                                                                     
                                                                                                                                
REPRESENTATIVE PETERSEN  asked whether a household  including six                                                               
individuals eligible for a PFD would receive six vouchers.                                                                      
                                                                                                                                
MS.  PIERSON said  the program  only  applies to  adults, so  six                                                               
adult members of a household would receive vouchers.                                                                            
                                                                                                                                
3:34:31 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  TUCK  asked  for  clarification on  the  time  of                                                               
residency required to be eligible for a PFD and a voucher.                                                                      
                                                                                                                                
MS. PIERSON said  the Department of Law  (DOL) advised applicants                                                               
for vouchers should include those  who have been residents for 30                                                               
days to 60 days.                                                                                                                
                                                                                                                                
REPRESENTATIVE TUCK  surmised those  who received  a PFD  in 2012                                                               
were Alaska residents in 2011.                                                                                                  
                                                                                                                                
MS. PIERSON agreed.                                                                                                             
                                                                                                                                
CO-CHAIR   FOSTER  expressed   his  belief   that  one   who  was                                                               
incarcerated  in   the  qualifying   year,  and  whose   PFD  was                                                               
garnished, would still be eligible for a voucher.                                                                               
                                                                                                                                
MS. PIERSON indicated correct.                                                                                                  
                                                                                                                                
3:36:27 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT asked  whether residents  would receive  a check                                                               
for the total amount.                                                                                                           
                                                                                                                                
MS. PIERSON explained that those  eligible would get a voucher to                                                               
give to the fuel supplier for  fuel; the fuel supplier would then                                                               
turn the  voucher into the state  and get paid, except  for those                                                               
eligible who opt for the $250 payment.                                                                                          
                                                                                                                                
CO-CHAIR PRUITT asked for the  legal ramifications of one voucher                                                               
per household instead of one voucher per adult.                                                                                 
                                                                                                                                
MS. PIERSON said the sponsor has not looked at that option yet.                                                                 
                                                                                                                                
CO-CHAIR PRUITT  cautioned against a  repeat of the  situation in                                                               
2008,  when  a  cash  energy   assistance  payment  was  made  to                                                               
residents, and  became "an economic  stimulus for Taiwan."   Even                                                               
if a voucher  goes to the energy distributor, he  urged for a way                                                               
to spread the cost over months,  instead of a payment in one lump                                                               
sum.                                                                                                                            
                                                                                                                                
3:39:38 PM                                                                                                                    
                                                                                                                                
MS. PIERSON  said this concern  was part of the  sponsor's intent                                                               
in making  the voucher redeemable  to a fuel  distributor, unless                                                               
the resident elected to take $250 in cash.                                                                                      
                                                                                                                                
CO-CHAIR PRUITT  pointed out if a  resident does not have  to pay                                                               
his or her fuel bill, he  or she has additional money.  Moreover,                                                               
this  additional money  would not  come  during the  time of  the                                                               
highest energy demand in winter.                                                                                                
                                                                                                                                
MS. PIERSON acknowledged this was worth consideration.                                                                          
                                                                                                                                
REPRESENTATIVE  PETERSEN observed  a distributor  may opt  out of                                                               
the program,  causing a  problem to arise  if the  distributor is                                                               
the sole source of fuel for a location.                                                                                         
                                                                                                                                
MS. PIERSON assured the committee  the sponsor is working on that                                                               
problem.                                                                                                                        
                                                                                                                                
REPRESENTATIVE  PETERSEN agreed  with  Co-Chair  Pruitt that  250                                                               
gallons of  diesel fuel  could be  worth a lot  of money  in some                                                               
parts of the state.                                                                                                             
                                                                                                                                
3:42:34 PM                                                                                                                    
                                                                                                                                
REPRESENTATIVE SADDLER  said he appreciated the  sponsor's intent                                                               
to  alleviate the  high utility  costs  in Fairbanks,  but he  is                                                               
concerned   that   the   legislation  assigns   the   state   the                                                               
responsibility  to  pay  for an  individual's  heating  bill:  "a                                                               
dangerous precedent that's an endless  commitment."   He was also                                                               
concerned  that  the  bill  does not  require  residents  to  add                                                               
insulation or  upgrade to more efficient  furnaces, and suggested                                                               
that  the money  might  be  better spent  on  the Alaska  Housing                                                               
Finance    Corporation    (AHFC),    Department    of    Revenue,                                                               
weatherization program, or toward a gas pipeline or a dam.                                                                      
                                                                                                                                
MS. PIERSON agreed this is a difficult policy call.                                                                             
                                                                                                                                
REPRESENTATIVE TUCK  asked whether the vouchers  could be applied                                                               
to a resident's back payments owed to a utility.                                                                                
                                                                                                                                
MS. PIERSON said that situation  is still being discussed without                                                               
a conclusion.   In further  response to Representative  Tuck, she                                                               
confirmed the voucher is for the purchase of fuel in the future.                                                                
                                                                                                                                
REPRESENTATIVE TUCK  surmised if a  home is sold, the  voucher is                                                               
transferable to another location.                                                                                               
                                                                                                                                
3:45:26 PM                                                                                                                    
                                                                                                                                
MS. PIERSON said yes, because the  voucher is issued to a person,                                                               
not a physical  location.  In further  response to Representative                                                               
Tuck, she  said if someone moves  out of state the  voucher would                                                               
be null and void.                                                                                                               
                                                                                                                                
REPRESENTATIVE  TUCK   then  asked   whether  the   vouchers  are                                                               
transferable.                                                                                                                   
                                                                                                                                
MS. PIERSON said no, except a  renter whose utilities are paid by                                                               
his or her  landlord can negotiate one time with  the landlord to                                                               
take the value  of the voucher off  of his or her  rent, and then                                                               
have the voucher reissued in the name of the landlord.                                                                          
                                                                                                                                
3:46:17 PM                                                                                                                    
                                                                                                                                
CO-CHAIR  PRUITT  asked how  the  vouchers  would impact  federal                                                               
funds or certain benefit programs.                                                                                              
                                                                                                                                
MS.  PIERSON  expressed her  belief  the  voucher would  have  an                                                               
impact;  for example,  the Internal  Revenue Service  (IRS) would                                                               
deem the  value of  the voucher  as income.    Although  the bill                                                               
contains a  hold harmless clause  for state  assistance programs,                                                               
the language  would not affect  federal assistance  programs, and                                                               
there  will be  an  issue  for veterans  similar  to the  problem                                                               
created by the "super dividend" [in 2008].                                                                                      
                                                                                                                                
3:47:16 PM                                                                                                                    
                                                                                                                                
CO-CHAIR FOSTER held over HB 336.                                                                                               
                                                                                                                                
3:47:28 PM