03/05/2002 01:38 PM Senate L&C

          SB 280-WATER/SEWER/WASTE GRANTS TO UTILITIES                                                                      
                                                                                                                                
MS.  WILDA RODMAN,  staff to  Senator Therriault,  sponsor of  the                                                              
measure,  informed members  that  she was  asked to  submit a  new                                                              
committee substitute (CS) to deal  with the following concerns: SB
 would open  up the pool of  applicants too wide; and  it would                                                              
allow utilities to  be eligible for solid waste  grants, which was                                                              
not  the intent.  The original  bill allowed  public utilities  to                                                              
apply if their rates were subject  to the Regulatory Commission of                                                              
Alaska (RCA). Under the proposed  CS, a water and sewer utility is                                                              
eligible  to apply  if  it serves  as the  primary  utility for  a                                                              
municipality and  its rates are regulated  by the RCA.   The field                                                              
was not narrowed down in the CS specifically  to Fairbanks because                                                              
the sponsor  wanted to  create an  incentive to other  communities                                                              
that want to privatize.                                                                                                         
                                                                                                                                
In  regard to  the solid  waste issue,  the  proposed CS  excludes                                                              
solid waste grants  by restricting eligibility to  AS 46.03.030(b)                                                              
(1)-(3).  On page  1, line 11, of the CS, utilities  are no longer                                                              
eligible to apply for "(4) a solid  waste processing, disposal, or                                                              
resource recovery system."                                                                                                      
                                                                                                                                
MS. RODMAN explained one last change  in the proposed CS bases the                                                              
grant  match  ratios on  the  population  of a  municipality.  The                                                              
original bill  based the  grant match ratio  on the population  of                                                              
the public  utility service  area. The  change is consistent  with                                                              
current  statute.  She  pointed  out  that  she  worked  with  the                                                              
Department  of  Environmental  Conversation  (DEC) to  narrow  the                                                              
scope and used its definition of "primary."                                                                                     
                                                                                                                                
SENATOR LEMAN asked  where the definition of "primary"  is located                                                              
in the proposed CS.                                                                                                             
                                                                                                                                
MS.  RODMAN  said  it is  not  and  asked  Mr. Easton  of  DEC  to                                                              
elaborate.  She said  the  rationale is  that  "primary" is  self-                                                              
explanatory in  that a primary  utility serves the  largest number                                                              
of people in a service area.                                                                                                    
                                                                                                                                
SENATOR LEMAN said it is not obvious  to him in looking at Section                                                              
1 that  the bill is  restricted to  water and wastewater  projects                                                              
and not solid waste. He asked for clarification.                                                                                
                                                                                                                                
MS. RODMAN said that language is  in Section 3 on page 2, line 15.                                                              
                                                                                                                                
With no  further questions or  discussion, SENATOR LEMAN  moved to                                                              
adopt the proposed CS to SB 280 (Craver, 03/04/02).                                                                             
                                                                                                                                
CHAIRMAN STEVENS  announced that with no objection,  CSSB 280(L&C)                                                              
was adopted.                                                                                                                    
                                                                                                                                
MR. DAN EASTON,  Director of Facility Construction  and Operations                                                              
for   DEC,  informed   members  that   he   worked  with   Senator                                                              
Therriault's office on the committee  substitute. It maintains the                                                              
focus of  the program  on municipal  systems,  be they private  or                                                              
publicly   owned,   as   opposed  to   systems   serving   private                                                              
developments, such  as trailer parks  or subdivisions.  One effect                                                              
of the committee  substitute is to limit the increase  in the size                                                              
of  the pool  of eligible  systems  so instead  of  having 50  new                                                              
eligible systems,  there will be one  or two. That means  DEC does                                                              
not anticipate an effect on its workload  and expects to provide a                                                              
zero fiscal note to the committee substitute.                                                                                   
                                                                                                                                
SENATOR  LEMAN asked  Mr. Easton  his understanding  of a  primary                                                              
utility, for the record.                                                                                                        
                                                                                                                                
MR. EASTON  said he  is thinking of  the Webster's definition,  in                                                              
other words, the primary utility  would be the most significant or                                                              
main utility.                                                                                                                   
                                                                                                                                
SENATOR LEMAN said  he could not think of any  competing water and                                                              
sewer utilities,  but both  Chugach Electric  and Municipal  Light                                                              
and  Power  are located  in  Anchorage  and are  both  significant                                                              
electrical  utilities. He  could argue that  both utilities  could                                                              
meet the  definition of primary. He  asked Mr. Easton if  he could                                                              
think of a similar example in the water and sewer business.                                                                     
                                                                                                                                
MR. EASTON said he could not. He  noted there are two utilities in                                                              
Fairbanks, but they have a common owner so would not qualify.                                                                   
                                                                                                                                
SENATOR LEMAN commented that some  communities have competing haul                                                              
systems  but DEC will  have to  sort out  whether those  companies                                                              
meet  the definition  of  a primary  utility  and  might not  even                                                              
apply.                                                                                                                          
                                                                                                                                
CHAIRMAN STEVENS noted there was  no further testimony or proposed                                                              
amendments.                                                                                                                     
                                                                                                                                
SENATOR  LEMAN moved  CSSB  280(L&C) from  committee  with a  zero                                                              
fiscal note.                                                                                                                    
                                                                                                                                
There being  no objection, CHAIRMAN  STEVENS announced  the motion                                                              
carried and that the committee would take up SB 309.