Legislature(2007 - 2008)BARNES 124
07/23/2008 10:00 AM House COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| HB4002|| HB4003 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | HB4002 | TELECONFERENCED | |
| = | HB4003 | ||
ALASKA STATE LEGISLATURE
HOUSE COMMUNITY AND REGIONAL CO-CHAIR AFFAIRS STANDING COMMITTEE
July 23, 2008
10:02 a.m.
MEMBERS PRESENT
Representative Anna Fairclough, Co-Chair
Representative Gabrielle LeDoux, Co-Chair
Representative Nancy Dahlstrom
Representative Mark Neuman
Representative Kurt Olson
Representative Sharon Cissna
Representative Woodie Salmon
MEMBERS ABSENT
All members present
COMMITTEE CALENDAR
HOUSE BILL NO. 4002
"An Act establishing the Alaska resource rebate program and
relating to the program; and providing for an effective date."
- MOVED CSHB 4002(CRA) OUT OF COMMITTEE
HOUSE BILL NO. 4003
"An Act making supplemental appropriations to the Alaska Energy
Authority for power cost equalization; making special
appropriations to the Department of Revenue and to the
Department of Health and Social Services for the Alaska resource
rebate program; making a special appropriation to the Department
of Revenue for the payment of certain shared taxes relating to
aviation fuel; and providing for an effective date."
- MOVED CSHB 4003(CRA) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB4002
SHORT TITLE: RESOURCE REBATE PROGRAM FOR RESIDENTS
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
07/09/08 (H) READ THE FIRST TIME - REFERRALS
07/09/08 (H) CRA, FIN
07/11/08 (H) CRA AT 8:00 AM BARNES 124
07/11/08 (H) Heard & Held
07/11/08 (H) MINUTE(CRA)
07/15/08 (H) CRA AT 8:00 AM BARNES 124
07/15/08 (H) Heard & Held
07/15/08 (H) MINUTE(CRA)
07/17/08 (H) CRA AT 4:00 PM Anch LIO Conf Rm
07/17/08 (H) Heard & Held
07/17/08 (H) MINUTE(CRA)
07/22/08 (H) CRA AT 2:00 PM BARNES 124
07/22/08 (H) Heard & Held
07/22/08 (H) MINUTE(CRA)
07/23/08 (H) CRA AT 10:00 AM BARNES 124
BILL: HB4003
SHORT TITLE: APPROP: ENERGY RELIEF/REBATE/FUEL TAX
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
07/09/08 (H) READ THE FIRST TIME - REFERRALS
07/09/08 (H) CRA, FIN
07/11/08 (H) CRA AT 8:00 AM BARNES 124
07/11/08 (H) Heard & Held
07/11/08 (H) MINUTE(CRA)
07/15/08 (H) CRA AT 8:00 AM BARNES 124
07/15/08 (H) Heard & Held
07/15/08 (H) MINUTE(CRA)
07/17/08 (H) CRA AT 4:00 PM Anch LIO Conf Rm
07/17/08 (H) Heard & Held
07/17/08 (H) MINUTE(CRA)
07/22/08 (H) CRA AT 2:00 PM BARNES 124
07/22/08 (H) Heard & Held
07/22/08 (H) MINUTE(CRA)
07/23/08 (H) CRA AT 10:00 AM BARNES 124
WITNESS REGISTER
JULIE KITKA, President
Alaska Federation of Natives (AFN)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of AFN during the
hearing on HB 4002 and HB 4003.
RALPH ANDERSON, CEO
Bristol Bay Native Association (BBNA);
Chair, Alaska Federation of Natives (AFN) Working Group
Dillingham, Alaska
POSITION STATEMENT: Testified on behalf of BBNA and the AFN
Working Group during the hearing on HB 4002 and HB 4003.
BRENDA REBNE, Vice President
Corporate Affairs
Ahtna, Inc.
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of Ahtna, Inc., during
the hearing on HB 4002 and HB 4003.
JANIE LEASK, President
First Alaskans Institute (FAI)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of FAI during the
hearing on HB 4002 and HB 4003.
BRYCE WRIGLEY
Delta Junction
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4002 and HB 4003.
DICK BRICKLEY
Fairbanks, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4002 and HB 4003.
BUZZ OTIS
North Pole, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4002 and HB 4003.
BUD ROSEN
North Pole, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4002 and HB 4003.
PATRICE GRIFFIN, Director
Head Start
Child Development Division
Rural Alaska Community Action Program (RuRAL CAP)
POSITION STATEMENT: Testified during the hearing on HB 4002 and
HB 4003.
JERALD BROWN, Vice President
Bering Straits Native Corporation (BSNC)
POSITION STATEMENT: Testified on behalf of BSNC during the
hearing on HB 4002 and HB 4003.
TONY WEYIOUANNA, SR., Member
Board of Directors
Bering Straits Native Corporation (BSNC)
Shishmaref, Alaska
POSITION STATEMENT: Testified on behalf of BSNC during the
hearing on HB 4002 and HB 4003.
DAN DUAME, Member
Association of Alaska Housing Authorities (AAHA)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of AAHA in support of
HB 4002 and HB 4003.
PAUL D. KENDALL
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4003 and HB 4003.
KEN FISHER
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of himself regarding HB
4002, during the hearing on HB 4002 and HB 4003
BARB NICKELS, Program Director
Bering Strait Development Council (BSDC)
Nome, Alaska
POSITION STATEMENT: Testified on behalf of BSDC during the
hearing on HB 4002 and HB 4003.
ROBERT KITH, Chair
Kawerak Board
Elim, Alaska
POSITION STATEMENT: Testified on behalf of the Kawerak Board
during the hearing on HB 4002 and HB 4003.
PETER NAOROZ, CEO
Kootznoowoo, Inc.
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of Kootznoowoo, Inc.,
during the hearing on HB 4002 and HB 4003.
MEERA KOHLER, President/CEO
Alaska Village Electric Cooperative (AVEC)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of AVEC during the
hearing on HB 4002 and HB 4003.
APRIL FERGUSON, Acting Chief Operating Officer (COO)
Bristol Bay Native Corporation (BBNC)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of BBNC in support of
HB 4002 and HB 4003.
TIEL SMITH, Manager
Land and Resource Department
Bristol Bay Native Corporation (BBNC)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of BBNC during the
hearing on HB 4002 and HB 4003.
HEIDI VEACH
Copper Center, Alaska
POSITION STATEMENT: Testified on behalf of herself during the
hearing on HB 4002 and HB 4003.
DAVE TRANUHAN
Bethel, Alaska
POSITION STATEMENT: Testified on behalf of himself in support
of HB 4002 and HB 4003.
RICH STASENKO, Treasurer
City of Shishmaref
Shishmaref, Alaska
POSITION STATEMENT: Testified on behalf of the City of
Shishmaref during the hearing on HB 4002 and HB 4003.
JIM WILLIAMS
Metlakatla, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4002 and HB 4003.
TOM LAKOSH
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of himself during the
hearing on HB 4002 and HB 4003.
ANN MALLARD, Principal
Eagle Community School
Eagle, Alaska
POSITION STATEMENT: Testified on behalf of the Eagle River
School district and herself during the hearing on HB 4002 and HB
4003.
JASON METROKIN, Director
Shareholder & Corporate Relations
Bristol Bay Native Corporation (BBNC)
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of BBNC in support of
HB 4002 and HB 4003.
SARA WILLSON
Juneau, Alaska
POSITION STATEMENT: Testified on behalf of herself during the
hearing on HB 4002 and HB 4003.
DOUG ISAACSON, Mayor
City of North Pole
North Pole, Alaska
POSITION STATEMENT: Testified on behalf of the City of North
Pole during the hearing on HB 4002 and HB 4003.
MARY ANN PEASE, Consultant
MAP Consulting
Anchorage, Alaska
POSITION STATEMENT: Testified on behalf of Bristol Bay Native
Corporation (BBNC) in support of HB 4002 and HB 4003.
RANDY RUARO, Special Staff Assistant
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 4002, answered
questions.
JERRY BURNETT, Director
Administrative Services Division
Department of Revenue
Juneau, Alaska
POSITION STATEMENT: During hearing of HB 4002, answered
questions.
ACTION NARRATIVE
CO-CHAIR GABRIELLE LeDOUX called the House Community and
Regional Affairs Standing Committee meeting to order at 10:02:44
AM. Representatives Olson, Salmon, Cissna, Dahlstrom, Neuman,
Fairclough, and LeDoux were present at the call to order.
Representatives Doll, Guttenberg, Thomas, and Gara were also in
attendance.
HB4002-RESOURCE REBATE PROGRAM FOR RESIDENTS
HB4003-APPROP: ENERGY RELIEF/REBATE/FUEL TAX
10:02:59 AM
CO-CHAIR LeDOUX announced that the committee would
simultaneously hear HOUSE BILL NO. 4002. "An Act establishing
the Alaska resource rebate program and relating to the program;
and providing for an effective date." and HOUSE BILL NO. 4003,
"An Act making supplemental appropriations to the Alaska Energy
Authority for power cost equalization; making special
appropriations to the Department of Revenue and to the
Department of Health and Social Services for the Alaska resource
rebate program; making a special appropriation to the Department
of Revenue for the payment of certain shared taxes relating to
aviation fuel; and providing for an effective date."
CO-CHAIR LeDOUX said she would be limiting public testimony to
two minutes per person.
10:03:57 AM
CO-CHAIR FAIRCLOUGH moved [to place HB 4002] before the
committee. [No objection was stated.]
CO-CHAIR FAIRCLOUGH moved [to place] HB 4003 before the
committee. [No objection was stated.]
The committee took an at-ease from 10:05:40 AM to 10:06:53 AM.
CO-CHAIR LeDOUX explained that the committee was meeting during
a break on the House floor.
10:07:14 AM
JULIE KITKA, President, Alaska Federation of Natives (AFN),
asked Co-Chair LeDoux's indulgence in allowing her over the two-
minute speaking limit, because of the range of issues she had to
address and the size of her constituency.
CO-CHAIR LeDOUX granted her request.
MS. KITKA said AFN represents approximately 20 percent of the
population in Alaska. Its members are concerned about high
energy prices and how they impact all the communities in the
state, not just the rural areas. Ms. Kitka relayed that AFN is
committed to working with state, federal, and private entities
to resolve issues. She noted that as major land owners in
Alaska, AFN has resources that can be developed and is
interested in bringing those resources to market. She said AFN
has developed incredible management capability and
organizational reach over the last 35 years, in order to
implement solutions and partnerships. Ms. Kitka said that
capability and reach can extend to help solve "what is affecting
not only Alaskans but all citizens of the United States, in
fact, world-wide." The interest in helping find energy
solutions extends beyond the state's federally recognized tribes
to regional housing authorities and travel consortiums she said.
10:10:42 AM
MS. KITKA commended the House Community and Regional Affairs
Standing Committee for taking on this issue, the magnitude of
which is greater than any she has seen in her lifetime. She
said AFN believes that the crisis at hand will restructure the
state's and the nation's economy. The high price of oil is here
to stay, she said; therefore, it is imperative to help Alaskans
adjust to the high prices and get some support, and to get the
different sectors in the state to work together to that end.
She opined, "The state government is at the forefront in
responsibility in helping bring us forward so that we have the
proper resources and the proper institutional structures to deal
with this change."
10:12:32 AM
MS. KITKA said the first steps to be taken must be to stabilize
energy costs and provide immediate relief for individuals,
families, and communities who are hard hit by high energy costs.
Communities cannot be allowed to collapse under the extremely
high costs. She emphasized the far-reaching effect of the high
cost of energy, naming health clinics and schools - every sector
in which people have invested state, federal, and private
resources - as being at risk of imploding unless the support is
there to "shore things up." Ms. Kitka said no one a year ago
could have imagined today's energy situation, thus no one is
prepared for it, and not everyone has the resources to absorb
those costs without flinching. Ms. Kitka said a large part of
the population does not have the cash resource to deal with an
energy crisis.
10:14:14 AM
MS. KITKA relayed that AFN is asking the legislature to take
bold measures, which would include the following: providing
immediate relief for individuals and families, investing in the
state, strengthening the power cost equalization program,
supporting the buying down of debt in rural utilities to
stabilize utilities, putting caps on prices to keep fuel
affordable, and expanding and supporting fuel purchasing
transportation and cooperative purchase agreements. Ms. Kitka
noted that another of her positions is as one of the seven
commissioners of the Denali Commission. One of the programs the
commission has had in the last 10 years is building bulk fuel
storage tanks, as well as upgrading rural utilities. She said
AFN supports the family fuel subsidy program and commends the
governor and the administration for putting forward some
proposals. She said AFN would be glad to work with the
committee on any technical changes to those proposals.
MS. KITKA concluded by urging the legislature not to ignore
investing in alternative and renewable energy, but rather to
"beef up" a fund that could address that issue, because she
explained there is a lot of lead time in alternative energy
projects. She also urged the legislature to invest in the
University of Alaska, because the best minds in the university
need to begin working on long-term energy solutions, as well as
scaling up some of the new development that can be used in
Arctic conditions and small communities. An investment in the
university, she said, will pay great dividends. Finally, she
recommended that the legislature consider providing relief to
air carriers.
10:17:12 AM
CO-CHAIR FAIRCLOUGH indicated that she and a couple other
legislators may be available to meet with those who do not have
the opportunity to share all their thoughts on this issue, after
which she could report back to the committee.
10:17:39 AM
REPRESENTATIVE CISSNA mentioned an amendment that would allocate
funds to distribute resources based on "heating degree days" and
average regional costs of one gallon of heating fuel or British
thermal unit (Btu) equivalent. She said there is a chart that
shows a needs-based distribution per region and community, which
would be "in addition to the base amount of the rebate that the
people would get." She asked Ms. Kitka how AFN would react to
such an amendment.
10:18:59 AM
MS. KITKA responded that AFN sees the need for support not only
for electrical costs, but also for heating fuel costs. Trying
to "equalize that through the state" and get base support for
everyone would be welcome, she said. She reiterated how
important this issue is for the legislature to address, and
urged that body to "take this historic opportunity and anchor in
supports."
10:20:26 AM
MS. KITKA, in response to Representative Salmon, explained that
the fourth point listed on her handout - "Provide a family fuel
subsidy to help meet the immediate crisis" - means an overall
policy choice of providing direct relief to families and
communities that will not have the cash to pay their bills. It
not only applies to PCE, but also to home heating oil support
and initiatives. The fourth point emphasizes relief to
families, not just to institutions, governments, schools, and
health clinics.
10:21:23 AM
RALPH ANDERSON, CEO, Bristol Bay Native Association (BBNA),
Chair, Alaska Federation of Natives (AFN) Working Group, noted
that the AFN Working Group is the group that came up with the
points that were touched upon in Ms. Kitka's oral testimony and
are expanded upon in her written testimony. He echoed Ms.
Kitka's expressed appreciation of the legislature's attention to
the energy crisis and her remarks about the widespread nature of
the crisis. The Working Group was initiated from the premise
that the high energy prices are here to stay, and he emphasized
that accepting that is the only way to tackle the issues and
come up with viable solutions. Today's crisis is not that there
is a shortage of fuel, as was the case in the 70s, but that the
price of fuel is so high. Mr. Anderson said he knows people in
his region who are applying for jobs in Anchorage because they
are "deathly afraid" of the fuel costs they will be facing.
Programs, such as those through the Alaska Housing Finance
Corporation (AHFC) and the PCE program are very helpful, he
said.
10:24:25 AM
MR. ANDERSON next focused his remarks related to Bristol Bay.
He said a regional summit was held in Bristol Bay on July 7, and
a number of regional organizations participated. A number of
recommendations were made. Regarding the proposed $1,200
rebate, Mr. Anderson said BBNA would support the possibility of
an index mechanism. He said in one village residents are paying
$8.00 a gallon for fuel, and in such a case, $500 is not going
to go very far.
10:25:17 AM
MR. ANDERSON, regarding PCE, said [BBNA] supports expansion,
increasing the threshold from 500 to 750 kilowatts. He
mentioned an "income disregard provision." Regarding heating
fuel, he said BBNA would like to establish a base of 500 gallons
of fuel as part of the PCE program. He proposed that the base
cost of fuel be set at $4.00 a gallon and be calculated on
location or regional specific basis, and include an indexing
mechanism.
CO-CHAIR LeDOUX
MR. ANDERSON said he would submit a copy of the Bristol Bay
Energy Crisis Recovery and Implementation plan. He noted that
he is the chair of the Bristol Bay Partnership, which is
comprised of executives from the five major organizations in
Bristol Bay. He indicated that some of the information he is
providing today is the result of the partnership's work begun in
January and approved in April.
10:27:10 AM
BRENDA REBNE, Vice President, Corporate Affairs, Ahtna, Inc.,
noted that Ahtna, Inc., is one of the 13 regional corporations
established under the Alaska Native Claims Settlement Act
(ANCSA). She said there are eight federally recognized tribes
in her region, all of which are on the existing road system -
the Parks and Glenn Highways.
MS. REBNE, in regard to HB 4002, said Ahtna, Inc., fully
supports the governor's efforts to offer immediate relief to the
residents of Alaska. She stated that Alaska residents are
suffering, particularly the ones residing outside of urban
centers and those experiencing a loss of quality of life due to
the pressures of choosing between heating their homes and other
necessities such as paying for food, transportation and
clothing. She related that the vast majority of homes in the
Ahtna, Inc., region are not heated by electricity, but rather
utilize wood, oil stoves, and furnaces. While fuel and gas
prices have almost doubled, incomes have not, she said. Ms.
Rebne related that currently in Copper Center, heating fuel is
$4.86 if a person buys 300 gallons at once. Even with an energy
efficient stove, she said, the fuel might last two months, at a
cost of a little over $700 a month, on top of mortgage or rent.
Ms. Rebne remarked that she thinks that number is low - that
some people are paying up to $1,100 a month just to heat their
homes. She pointed out that with a median income in Copper
Center of approximately $31,000, and other factors, such as the
cost of electricity, it is clear that a significant portion of a
person's income is spent on basic energy use.
MS. REBNE stated, "While we recognize that the rebate program is
likely a temporary fix, its immediate need by residents of
Alaska cannot be minimized or stressed enough. With that said,
it is our hope that this legislature will support this program,
while continuing to pursue long-term solutions to the existing
energy crisis in the form of enhancing proactive pursuits of
alternative and renewable energy programs, both within and
between the public and private sectors."
10:29:51 AM
MS. REBNE next discussed HB 4003, paraphrasing from her written
testimony. She said while Ahtna, Inc., recognizes the value of
the current PCE program and supports increasing the budget, it
also asks the legislature to address the needs of the
communities on the road system - and other communities - that
currently do not benefit from the program. The residents not
currently eligible for the PCE program often live on the road
system, are several hundred miles form the urban hub zones, and
must truck fuel in at great expense.
MS. REBNE echoed the testimony of Mr. Anderson that the cost of
fuel is forcing people to move to urban areas. As people move
away, she said, businesses already suffering from the high cost
of energy are losing their economic base. Health care is also
being negatively impacted. Clinics are generally nonprofit and
must make difficult decisions related to keeping doors open and
cutting programs. Ms. Rebne said this is unacceptable,
considering the current financial richness of Alaska. She
stated, "We support reinstating the eligibility of businesses
and clinics while increasing the household limit from 500
kilowatt hours to [750 kilowatt hours] to at least meet the
national average. We also urge this legislature ... to address
the energy needs of those individuals and those communities that
are currently under utilities not eligible for the PCE program."
MS. REBNE said Ahtna, Inc., supports the proposal submitted by
BBNA, which she said is called the "Alaska Heating Cost
Equalization Program." She said this program addresses the cost
of diesel fuel for Alaskans paying home heating costs higher
than the averages paid in Anchorage, Fairbanks, and Juneau. She
stated, "While the PCE program only addresses the electrical
portion of energy costs in rural Alaska for those under eligible
utilities, this would be a first step and would go a long way
towards recognizing the energy needs of all Alaskans and
creating a truly equal ... program from which all Alaskans
benefit."
MS. REBNE concluded that Alaska is currently in the position to
make a financial commitment to its residents by envisioning the
state's future energy needs and beginning the process of
utilizing the state's resources in all forms of energy
production. She invited the legislature to visit the
communities that make up Ahtna, Inc., in order to better
understand the energy challenges faced by road-based communities
and to see first-hand the struggle its residents face to meet
the demands of the high cost of energy.
10:33:26 AM
JANIE LEASK, President, First Alaskans Institute (FAI), told the
committee that FAI is a statewide Native nonprofit organization
with a mission to advance Alaska Native people through community
engagement, information and research, collaboration, and
leadership development. She related that FAI housed an Alaska
Native Policy Center within its organization, and it is that
center which prepared the majority of the testimony.
MS. LEASK stated support of immediate relief to Alaskans to help
offset the cost of energy - specifically to rural Alaskans.
Furthermore, she stated that FAI believes that action needs to
be taken now, before first frost occurs in rural Alaska, while
at the same time, the state should be looking for long-term
solutions.
10:35:24 AM
MS. LEASK spoke of a non-scientific survey done in seven rural
communities, using Anchorage as a baseline. The survey verified
that those small communities are poor by Western standards and
their cost of living is high. Rural villages, she said, use
less energy and pay more for it; the median income is well below
that of Anchorage and the state average. Ms. Leask said the
unemployment rate is above the state average; however, she said
unemployment is not really counted in rural Alaska, because most
people there are not out looking for jobs because there are
none. With PCE, the rural villages surveyed pay from 0.19 to
0.30 cents per kilowatt hour (kWh), well above the 0.09 to 0.10
cents that Anchorage households pay. Without PCE, they would be
paying about 0.50 cents per kWh. Regarding heating fuel, Ms.
Leask reported that the state averages about $5.51 per gallon,
but the price in some areas can cost up to $11.00 per gallon.
The state average for a gallon of gas is $5.35, while the
villages surveyed can pay up to $8.35 a gallon. Ms. Leask said
certain goods were sampled as well, such a food basket, and she
said the rural communities pay up to $120 more to buy the same
basket of goods. She pointed out that $1,200 given to residents
of Alaska will certainly have less purchasing power in rural
Alaska than it does in any other area of the state. The cost of
travel was also compared, she said, and it was found to be much
higher for rural travelers to come into Anchorage, for example.
10:39:00 AM
MS. LEASK reinforced the comments of previous testifiers that
people are forced to make choices on what to give up.
Subsistence, she said, is absolutely critical in rural Alaska to
help supplement the cost of food; store-bought food is becoming
increasingly less affordable. She said it is easy for people to
suggest that rural inhabitants simply move to more urban areas,
but when populations move into urban areas, there is a cost and
impact of infrastructure associated with such migration.
Moreover, rural people do not want to leave their homelands, Ms.
Leask stated. Thus, the state needs to "take the higher road"
and work with both urban and rural areas of the state to figure
out "what we collectively can do," because there is an
interdependence between rural and urban communities, she
concluded.
10:40:52 AM
MS. LEASK, in response to Representative Cissna, suggested that
information regarding migration numbers could be found through
the Alaska Native Tribal Health Consortium. She indicated that
the migration has not just been happening this year, but has
been occurring over time. She talked about schools closing and
people moving to regional hubs, including Bethel.
10:43:48 AM
BRYCE WRIGLEY, testifying on behalf of himself, told the
committee that he is a farmer in Delta Junction. He stated that
it is difficult for him to testify against the proposed
legislation, because it would put money in his pocket, but he
questioned what good such a rebate would actually do. He
pointed out that $1,200 would buy about 230 gallons of fuel -
enough to last a month and a half. He stated, "If we're really
living that close to extinction, then we're only going to
forestall the inevitable by about a month a half." Mr. Wrigley
said he would rather see the $32 million that the proposed
program will cost be directed to a focused approach to
developing a renewable fuel industry, especially that type of
renewable fuel that can be "grown" in the state. He talked
about the biomass of straw, grass, and hay. He said Alaska
farmers can also grow much more grain that could be utilized in
the state, but have been unable to export that grain because of
a lack of transportation infrastructure. He asked, "So, if we
... grow more than we can use and we can't export it, why not
use it for fuel as well?" Mr. Wrigley said barley is cheaper
than fuel oil to heat, cleaner than wood; however, he indicated
that personal prejudices about using feed for fuel prevent
access to grants from Alaska Energy Authority (AEA) and Alaska
Industrial Development and Export Authority (AIDEA). He said,
"This idea is like a logger being opposed to cutting trees for
firewood because it ought to be used for lumber."
MR. WRIGLEY noted that canola is being grown in Delta Junction
currently, and this winter, the feasibility of making bio diesel
will be investigated. Unfortunately, he said, such an effort
requires money, and the grants available seem to be restricted
to electrical generation. Because of the lack of access to
those grants, he said, he has to proceed at much smaller scale
and pace than desired in order to stay within budget.
MR. WRIGLEY stated his belief that a directive to use the $32
million specifically to promote renewable energy on the farms in
Alaska would actually benefit the people of Alaska more in the
long run by providing a less expensive fuel alternative to high-
price fuel oil.
10:45:55 AM
CO-CHAIR FAIRCLOUGH noted for the record that for the proposed
$1,200 distribution, there are three different fiscal notes
totaling over $1 billion.
10:46:16 AM
DICK BRICKLEY, testifying on behalf of himself, expressed
appreciation of the legislature's efforts in addressing the
serious [energy crisis] issue. He stated his support of the
$1,200 rebate, and said he views it as helping to cover some of
the expenses that people have driving their vehicles, as well as
the increased cost of food.
MR. BRICKLEY said Governor Palin mentioned she would like to
come up with a significant energy plan for Alaska, and he stated
that he is positive that can be done. He expressed his hope
that the state would investigate hydro, wind, solar, natural
gas, coal gasification, biomass, geothermal, and nuclear power
options. That, he said, would pay tremendous dividends in the
long run, even though the $1,200 is needed now for immediate
help. He encouraged the committee to "pass this," saying that
the amount involved is a small drop in the bucket. People
across the state are feeling the effects of energy cost
inflation. Having heard the previous testifiers, Mr. Brickley
said he realizes the problem is even worse in the rural
communities.
The committee took an at-ease from 10:49:56 AM to 10:50:34 AM.
10:51:07 AM
BUZZ OTIS, offered information regarding his personal history
and work background, noting his involvement in community work
and experience in the field of construction. He said he is
currently working to help the City of North Pole in its economic
development efforts, but thwarting that is the high cost of
energy - a problem Mr. Otis said is experienced not only in
rural areas, but also in the Interior and in "other places along
the road system."
MR. OTIS said the idea of a cash payment is good, but he
suggested the legislature should consider PCE for "immediate
effect." He said along the road system, electricity costs are
close to 25 cents per kWh, and it would be great if that could
be subsidized in some way. Mr. Otis said he thinks another
consideration should be to cap the price of fuel at the
refineries at $2.50 a gallon, with the state subsidizing the
difference. He opined that Alaskans should not be paying some
of the highest costs in the nation while the state enjoys its
current surplus.
10:54:10 AM
MR. OTIS related that his wife owns a self-storage business and
has noted that in the last couple weeks, three customers have
announced they are leaving town - not because they want to, but
because of the high cost of living in the area. He urged the
legislature to help Alaskans, to explore ideas, to use vision,
and to come up with short-, medium- and long-term solutions.
Mr. Otis concluded by expressing appreciation for the work the
legislature is doing.
10:54:40 AM
BUD ROSEN, related that he has lived in Alaska since 1967, and
has employed a lot of people in the construction business. He
said he has gone from hiring as many as 35 employees, plus
subcontractors, to zero employees and just a few subcontractors.
He observed that the price of oil is costing home owners almost
as much as their house payments during the winter. He added,
"So, we need to get a handle on getting our energy costs down."
10:56:25 AM
PATRICE GRIFFIN, Director, Head Start, Child Development
Division, Rural Alaska Community Action Program (RuRAL CAP),
testifying on behalf of RuRAL CAP, noted that that entity serves
806 children in rural communities throughout Alaska, as well as
500 children in its Parents As Teachers program and 30 children
in its Anchorage Child Development Center. She thanked the
legislature for the funding the Head Start programs received
this year. She said the programs continue to see increases in
operation costs with fuel price increases, and those increases
affect Head Start's ability to pay for heat, electricity, and
travel to rural communities. Ms. Griffin listed the many
services that Head Start provides beyond preparing children for
kindergarten, including: employment for hundreds of people;
health screenings for children; teacher certification and the
support of continuing education; parent education; and services
promoting healthy families.
MS. GRIFFIN said she is testifying today regarding the effects
of increased fuel and electricity costs, not only on Head Start,
but also on the families involved in the programs it services.
She said there have been situations when some of the Head Start
communities have run out of fuel in the winter, and families and
staff have been forced to drive on snow machines into local
hubs, such as Bethel, to purchase fuel for their homes and for
Head Start buildings in rural communities. The stress that
results from the rising cost of fuel, food, and electricity and
the hard choices that those rising costs bring about does not
contribute to the health of families. As a result of funding
cuts and increased operation costs, Head Start programs have
lost teachers, cut positions for children, reduced operating
hours and days, slashed transportation services, reduced or
eliminated employees' salaries and health benefits, and trimmed
family support services.
10:59:35 AM
MS. GRIFFIN stated that any support that expands PCE "to include
the community buildings" will provide the much-needed funds
necessary for Head Start to continue its work. Without those
funds, she warned, the cuts that would have to be made would
cause a "domino effect to other parts of the state's delivery
system," including increased demands on the social service
programs and the education system. Ms. Griffin concluded:
We view our early childhood programs as an important
component of the state's infrastructure, and endorse
and support HB 4002 and [HB] 4003, ... [which allow]
us to serve young children and families across the
state educationally, economically, health-wise, and
culturally.
11:02:17 AM
JERALD BROWN, Vice President, Bering Straits Native Corporation
(BSNC), testified on behalf of BSNC. He noted that he is also a
member of the Chamber of Commerce and the Nome Common Council,
although he is not testifying on their behalf. Mr. Brown
related that BSNC is headquartered in Nome and has over 600,000
shareholders in the Bering Straits Region. He said several
years ago BSNC began looking for ways to correct energy
inefficiencies - replacing inefficient boilers, tightening up
the seal on buildings, and replacing windows and siding - but
that was not enough. Approximately one year ago, the board of
BSNC authorized the installation of solar panels on its
corporate office building - a project that was completed in
March [2008]. He said it is one of the largest solar panels
outside of the railbelt in Alaska - about 17 kilowatts. Next,
BSNC partnered with Sitnasuak Native Corporation - a village
corporation in Nome - to invest $6 million in a wind farm just
outside of Nome. He reported that the project is well underway,
and Nome expects to be generating power by October or November
of this year. He offered further details regarding the wind
farm, noting that the final area selected for the farm will
require a $700,000 power line extension, and he asked the
legislature to consider funding part of that extension cost.
11:05:53 AM
TONY WEYIOUANNA, SR., Member, Board of Directors, Bering Straits
Native Corporation (BSNC), stated that BSNC supports "bringing
back the full funding of the PCE program." He explained that
means "to include everybody to receive the benefit, including
the clinics." He offered his understanding that when the PCE
program first started, the clinics were not included. Mr.
Weyiouanna said BSNC supports the state's commitment to fund
alternative energy projects throughout Alaska, and would like to
encourage the state to consider providing funding or partnering
with existing projects or those projects just starting up, such
as the one previously mentioned by Mr. Brown. He relayed that
BSNC supports the $1,200 rebate program proposed by the
governor. Furthermore, BSNC supports programs that would lower
the cost of gas and oil, thereby decreasing the cost of
utilities. Mr. Weyiouanna noted that he had submitted written
testimony [included in the committee packet].
11:09:02 AM
DAN DUAME, Member, Association of Alaska Housing Authorities
(AAHA), testifying on behalf of AAHA, noted that as a member of
that association, he serves as the executive director of the
Aleutian Housing Authority. He offered a background regarding
AAHA: members and board of directors include 14 regional
housing authorities created pursuant to AS 18.55; the Alaska
Housing Finance Corporation (AHFC) is a member of AAHA's board
and association; AAHA members serve residents in every part of
the state; regional housing authorities have built well over
6,000 housing units since their inception in 1971 and
collectively administer well over $100 million in federal and
state funds annually; the vast majority of housing in rural
Alaska has been built by AAHA members; in addition to new
construction, AAHA members provide a wide range of housing and
housing related services, including the development of community
infrastructure; and working with AHFC, AAHA is one of the
largest employers in rural Alaska and plays a critical role in
helping to sustain many local Bush economies.
MR. DUAME stated that given the role AAHA plays, it is obvious
that it would have a strong interest in the legislation
currently before the committee and the broader issues of both
short- and long-term energy policies. Mr. Duame stated that
AAHA strongly supports both HB 4002 and HB 4003, as "one step
that can be taken immediately to provide much needed relief from
the escalating energy costs being faced by both urban and rural
Alaskans - many of whom are our clients and beneficiaries." Mr.
Duame said the resource rebate program, the additional
appropriations of PCE, and the possible waiver of the state
motor fuel tax are all appropriate uses of oil revenue.
MR. DUAME related that in the past week, the average price of
gas in Anchorage and other communities on the road system ranged
from $4.45 to $4.75 a gallon, while in Bethel, the price of gas,
which was $5.69 a gallon a week ago, has risen to about $5.99 a
gallon. Many of the smaller communities, he said, are
"approaching levels that are truly crippling." He named other
communities whose gasoline prices are as high as $9.29 a gallon
and whole heating fuel prices are as high as $8.39. He noted
that all of these prices reflect fuel or gas received before
this fall's shipment, at which point the prices are hard to
predict. Mr. Duame stated that many of AAHA's clients are faced
with having to choose between eating and staying warm; making
house payments is quickly becoming a secondary priority. He
stated, "This fact has the potential for threatening to
undermine the entire system under which we operate and in which
we've invested hundreds of millions of dollars."
MR. DUAME emphasized that while AAHA supports the aforementioned
measures for short-term relief, it believes that a statewide
energy policy needs to be rapidly developed and implemented,
which he said would outline a comprehensive strategy to reduce
energy costs over the mid and long term. He said AAHA looks
forward to the release of Governor Palin's long-term plan, as
well as any action initiated by the legislature toward
developing a comprehensive solution to Alaska's energy needs.
The survival of Bush communities depends on the actions the
legislature takes over the next months and years, he said.
11:14:22 AM
MR. DUAME named two related programs that have a significant
impact on the overall objectives underlying both HB 4002 and HB
4003: the AHFC supplemental grant program and the
weatherization rebate program, the latter of which was recently
implemented. Mr. Duame opined that there is nothing more
important or cost-effective in the short-term than conservation.
He emphasized that the supplemental grant program has been an
important program for AAHA, allowing its members to leverage
federal funds in particular, and is very much related to the
ability to produce energy efficient homes. He said AAHA's hope
regarding the weatherization program is that it will reduce
usage by 30-50 percent. He concluded by strongly urging the
legislature to support both the supplemental program and the
weatherization program.
11:15:37 AM
PAUL D. KENDALL, testifying on behalf of himself, said he is
"taken aback." He stated that the real issue is that "we're
letting some corporation hold our people hostage." He said his
concern is in regard to leadership. Mr. Kendall explained that
society culls itself through the election process "in order to
move on with the general consensus," but limiting dialogue [by
limiting the amount of time each testifier gets to speak], when
the issue at hand should be broadcast statewide, is "foolish."
MR. KENDALL said giving preference to corporations over people
is an indication of where "our" problems lie. He stated, "...
The real problem is that we're allowing some corporation to
literally enslave us - literally place your children's lives in
jeopardy, and we're sitting here in acquiescence to that. ...
The men that I grew up with would never ... have stood for this
for a moment."
MR. KENDALL stated, "The real resolve is that we are each owed
to each other some annual energy allotment."
CO-CHAIR LeDOUX interjected that Mr. Kendall had testified when
the legislature met in Anchorage, and asked him to conclude his
testimony forthwith.
MR. KENDALL responded that this moment in time is a new moment.
He remarked that he had waited all night to hear a certain
speaker and missed it because that moment was not televised,
"because your government wanted to hang out in Juneau." Mr.
Kendall concluded that the chance exists to build a new society
with world-wide recognition within just a few years at the most,
based upon a new technology that is just "bulging to come
forward." He mentioned electric vehicles and "a whole slew of
energy devices." Mr. Kendall apologized for his
contentiousness, adding, "... But sometimes we all have to do
things we don't particularly want to do."
11:20:07 AM
KEN FISHER, testifying on behalf of himself, expressed
appreciation that Governor Palin took the initiative to place
[HB 4002] before the legislature. He said all too often only
the negative is focused upon in terms of the legislature and its
work, and he told the committee that he is here today to thank
the legislature for the work it is doing on this issue.
MR. FISHER noted that the committee has heard that Alaskans are
hurting financially because of high energy costs. He said the
citizens of Juneau, for example, experienced the disruption of
the city's hydro-electric supply, which resulted in a rate
increase of 400-500 percent. However, another result of high
oil costs, he said, is that the Alaska state treasury has
experienced an increase in revenue. Mr. Fisher said he has
heard that the people of Alaska are the owners of the state's
vast natural resources, the Constitution of the State of Alaska
charges the legislature to provide the utilization of all
natural resources for the maximum benefit for the people of
Alaska, and that the payments identified in HB 4002 represent a
distribution of Alaska's resource wealth to its owners. He
stated that the fact HB 4002 would distribute a small portion of
Alaska's resource wealth to its owners - the citizens of Alaska
- is a good thing.
11:23:27 AM
REPRESENTATIVE FAIRCLOUGH explained the procedure by which the
testimony of citizens is heard. She explained for the public's
benefit that the current meeting is being held as a balancing
act with the meeting of the body; the House floor session is
currently waiting upon the House Community and Regional Affairs
Standing Committee meeting to finish. She thanked Co-Chair
LeDoux for her handling of a stressful situation.
11:24:39 AM
BARB NICKELS, Program Director, Bering Strait Development
Council (BSDC), testifying on behalf of BSDC, noted that the
parent group for BSDC is the Alaska Regional Development
Organization (ARDOR), which represents 20 tribes in the region.
Ms. Nickels said she understands a concern she heard at a
previous meeting that data be gathered that will allow the
legislature to take a stance that is fair to all Alaskans. She
remarked that the data will become available, but the [energy]
crisis is a reality that is happening now.
MS. NICKELS stated that BSDC supports Governor Palin's proposal
to provide the $1,200 resource rebate to individuals to offset
the high cost of energy. Rural Alaskans have found themselves
in an energy crisis unlike anything urban Alaskans or those
living in the Lower 48 have experienced, she said. The economy
in the Bering Strait Region is primarily subsistence based, and
fuel costs in that region have recently risen to well over $7.00
a gallon, which will have a negative impact on the survival of
community members this winter, as well as on their subsistence
activities.
MS. NICKELS related that the lowest income members of the
community are currently spending almost 40 percent of their
income to pay for heating costs. She noted that a study shows
that although fuel costs matter, they do not seem to be
definitive drivers of migration, because migration trends are
related to earnings. Ms. Nickels said she interprets that study
to mean that the people who are hit the hardest by rising fuel
costs are the least able to afford to move. However, she said
people are moving during the long winter months. The effect of
people temporarily migrating will have a negative effect on both
urban and rural educational systems.
MS. NICKELS said school systems receive state monies based on a
formula derived from a student count taken in October.
Villages, as well as other areas in the state, see much higher
energy costs after October. She reported that people in rural
areas are coming to Anchorage, Nome, and other hub areas to live
temporarily during the high energy cost months, which affects
the student-teacher ratio and throws off the school's budget,
thereby reducing the quality of education each student receives.
The move itself disrupts a student's school year.
MS. NICKELS relayed that ARDOR provides planning assistance to
communities to create local economic development plans, and from
those plans a regional comprehensive economic development
strategy (CEDS) is made. As plans are updated, alternative
energy and other energy solutions are made top priority. What
is missing in order to bring such plans "full circle" is a state
economic plan, of which energy is also a key issue.
MS. NICKELS said ARDOR fully supports an expanded PCE program
that would encompass all customers, including businesses,
schools, and clinics. She indicated that ARDOR would also like
to see "the buy-down of the rural utility that will lower rates
to customers," which she said was "promoted during AEA's visit."
She said she heard yesterday that there was not a definitive
answer on whether or not a tax could be assessed to the
individual customer, and she expressed her hope that some
research will be done so that a definitive answer is found and
"this viable option can be placed in the bill." Ms. Nickels
continued:
It's evident that a long-term solution is eminent, and
... ARDOR is totally supportive of and is currently
assisting and researching alternative energy solutions
and conservation efforts for our region. However,
help is needed now for mere survival this coming
winter for all of our community members and fellow
Alaskans.
MS. NICKELS concluded by expressing her pride in being both part
of a rural community and a partner working toward alternative
energy solutions for Alaska.
11:28:56 AM
REPRESENTATIVE CISSNA said what is not being talked about is
what happens when members of a community are lost. She warned
that those members who leave could be those who keep the
electricity running or provide phone service. She asked Ms.
Nickels if this issue has been studied yet.
MS. NICKELS responded that there are many studies in progress,
but people don't realize the impending domino effect on people's
way of life in both urban and rural communities. She urged
everyone to consider what all the effects might be when voting
on "this bill."
11:30:44 AM
ROBERT KITH, Chair, Kawerak Board, testifying on behalf of the
Kawerak Board, told the committee that Kawerak is a nonprofit
group that provides BIA services, some state and federal grants,
and represents approximately 20 tribes in the Bering Straits
Region. He offered a brief personal history, noting that his
mother migrated out of Elim in about 1955, and he returned to
Elim in 1980, after spending most of his early years in
Fairbanks. He said he thinks the region has not experienced
large numbers of its inhabitants moving to Anchorage, although
he said he has seen a lot of migration out of Elim because of
the job market. The job market in Nome is much better than it
is in Elim, because of "Noble Gold," he observed.
MR. KITH revealed that he serves as president of the Elim Tribal
Council, which owns the [health] clinic and Native store, is
part of the Alaska Native Cooperative Association (ANCA), and
owns another building used for the Boys and Girls Club. Of the
three buildings in Elim, the one losing the most money is the
clinic. He said [the Council] receives federal money related to
leasing and the clinic; however, he estimated that the council
spent $10,000 over that which it received from the federal
government in order to keep the clinic's doors open. The store,
he said, sells gas and oil, which last year cost $4.79 and
$4.35, respectively, while the most recent shipment this year
has been priced at $7.25 and $8.09, respectively. He said the
council delayed the raising of the gas prices by two weeks,
because the commercial fishing season was just opening, and the
council wanted to lessen the impact on its fishermen and those
engaged in subsistence activities.
MR. KITH stated his belief that the proposed $1,200 would help
mitigate the impact of high fuel prices in the short term. He
said he would support more investment of the legislature's time
next session to consider this issue in more detail. He said the
aforementioned Native store has worked with the Alaska Energy
Authority in the past regarding a new tank farm, during which
many parties were involved, thus, he said, he appreciates what
AEA has done in the past and the investment that they are
making. He also noted that he had sat on a housing board and
appreciates the work of AHFC. Mr. Kith said Canada has invested
quite a lot in energy efficient homes, and Alaska has borrowed
from the Canadians in that respect.
MR. KITH said many people have talked about different ideas for
what can be done, but he thinks "the devil's in the details."
He explained that it takes time and careful planning to avoid
making mistakes and bad investments. He said that is why he
would like the legislature to continue with "this type of
meeting, but with less time crunch." In closing, Mr. Kith
acknowledged that other regions have suffered more than Elim
has.
11:36:36 AM
PETER NAOROZ, CEO, Kootznoowoo, Inc., testifying on behalf of
Kootznoowoo, Inc., told the committee that entity is "a village
corporation for the community of Angoon." He relayed that in
the past he worked as a staff member for a legislator and joined
Kootznoowoo, Inc., three years ago, and at that point in time
the issue of energy "was our number one priority." He reported
that Kootznoowoo, Inc., has been working on several projects in
Angoon with tribal brethren, state government, and federal
government. Those projects take time, he said, but today's
issue is an emergency situation.
MR. NAOROZ stated his support of "those speakers who went before
me on the subject of these two bills that you're looking at."
He posed three analytical questions. First, "Is this the ideal
way of dealing with this issue?" He said the answer is,
"Absolutely not." Second, "Is it enough money?" He suggested,
"Probably not." Third, "Is it the right thing to do?" He
answered, "At the end of the day, it's absolutely the right
thing to do."
MR. NAOROZ opined that teamwork is needed from the various
members of the team, including the state, federal government,
tribal entities, village corporations, and [Governor Palin's
administration]. With that teamwork, he predicted, "we have a
very good chance of getting there." He said he knows that
Southeast Alaska is "abundant in energy." He stated, "Our
project is a much smaller project than it could be if the
intertie was done." He indicated the importance of the state's
defining its role so that the private sector and corporations
such as Kootznoowoo, Inc., can "figure it out and contribute."
11:39:11 AM
MEERA KOHLER, President/CEO, Alaska Village Electric Cooperative
(AVEC), testifying on behalf of AVEC, noted that cooperative is
member-owned - a non-profit group that serves 53 villages
throughout Alaska, with a combined population equaling
approximately 44 percent of Alaska's Native population. Ms.
Kohler relayed that at its last meeting, the AVEC Board, in
response to fuel costs totaling approximately $26 million,
adopted a resolution declaring a fuel cost emergency. For
comparison purposes, Ms. Kohler noted that the fuel cost the
previous year was about $14 million and $8 million about five
years ago. There is no avenue through which to collect those
increased costs except through electric rates; therefore, it is
predicted that the average revenue per kWh - just under 40 cents
five years ago - will, with the current cost of fuel, be close
to 65 cents per kWh. That increase represents almost double the
current total cost of power in Anchorage, she pointed out.
Those costs of power "punch us through the 52.5 cent per kWh
ceiling in PCE," she said. She acknowledged that considerations
are being made to raise the ceiling; however, she reminded the
committee that PCE only affects about 30 percent of the kilowatt
hours that are sold in PCE communities. The other 70 percent of
sales are completely borne by the consumers - any residential
user consuming more than 500 kilowatt hours, all commercial
customers, and the schools - which is a huge impact in AVEC's
communities, she said. Ms. Kohler pointed out that whereas the
Lower 48 is currently suffering from high gasoline prices alone,
Alaska is feeling the additional impact of high electric and
fuel oil prices.
MS. KOHLER said AVEC's resolution suggests that the legislature
consider capping "the cost of fuel through electric utilities to
something akin to about three times the cost in Anchorage." She
noted that the cost of electricity in Anchorage is currently
about $3.50 per million Btu, while "our cost" is about $35 per
million Btu. She said, "If the state were to impose a fuel cost
cap, then the benefit would flow directly to all consumers
throughout the state." She said a number of consumers derive a
large percentage of their electricity from diesel fuel, with "no
relief whatsoever from any avenue - PCE does not affect them."
A fuel cost cap would bring that relief directly to those
utilities and those consumers.
MS. KOHLER stated, "We are faced with the enormous problem right
now: How are we going to pay for our fuel?" She mentioned a
state loan program, the grand total of which is approximately
$12 million, and she said that money is available for all fuel
purchases. She stated, "Our fuel purchase alone is $26
million." She named Nome, Bethel, Kotzebue, Naknek, and
Dillingham, and said the individual fuel costs in those
communities are well over $5 million this year, as compared with
less than $1 million just a few years ago. Ms. Kohler
continued:
What's happening is, we're having to increase our
lines of credit to draw down monies. So, we're
borrowing money at [a] 5-plus percent interest rate,
so that translates to an additional cost per kWh of
about 2 cents. So, we are hoping that there is going
to be some immediate relief opportunity available, so
we can buy our fuel and pass those benefits on to our
consumers.
MS. KOHLER said her question to the committee is if its members
are actively contemplating modifying the bills to include some
cost relief for fuel cost purchases, as well as debt relief "for
the utilities." She explained, "Because for us that also
translates to about 3 or 4 cents a kWh."
11:44:02 AM
REPRESENTATIVE CISSNA asked if "increasing the program" or
"having it cover more than it did" would "do anything in this."
MS. KOHLER answered, "It does help." She explained that the
original program, as it was first implemented in 1984, covered
the first 700 kilowatt hours, compared to 500, for all
consumers. Now, she said, it only covers the first 500 for
residential consumers. She said, "So, the small commercial
enterprises were getting some relief. Even though it's only 700
kilowatt hours, in a village where you have very small
commercial enterprises, it makes a big difference." Ms. Kohler
concluded:
There is, of course, a fairly large cost associated
with that. When the program was modified in '99, the
number of kilowatt hours eligible for PCE dropped
dramatically as a result of the changes, so the
kilowatt hours eligible will probably go up by about
25 percent if that were enacted.
11:45:49 AM
APRIL FERGUSON, Acting Chief Operating Officer (COO), Bristol
Bay Native Corporation (BBNC), testifying on behalf of BBNC,
noted that she had testified during the hearings in Anchorage,
and explained that she is once again before the legislature
because BBNC believes "we" are in a crisis - an emergency
situation. She said she appreciates the work that the
legislature is doing regarding this issue.
MS. FERGUSON said she is pleased to have heard the previous
testimony of Misters Rosen and Otis; the concerns they expressed
are shared by BBNC. She stated that BBNC is concerned about the
effect of the energy crisis not only on its shareholders, but
also on its employees. She said the immediate effects are
apparent "from many of our subsidiaries that we have working
here in state." The current uncertainty in the fuel market and
the violent changes in pricing are forcing people to move. When
people leave the state, that results in the loss of talent and
manpower.
MS. FERGUSON stated BBNC's support of HB 4002 and HB 4003. She
described the bills as short-term mechanisms in stabilizing the
state's economy "while we all work out the details and develop
the plans that we hope will save it."
MS. FERGUSON related that BBNC owns a subsidiary company in
Prudhoe Bay, called, Kakivik, whose employees inspect pipes and
work a two-week rotational work week. She stated, "It's fierce
competition to find a qualified workforce." She explained that
the work is technical; BBNC spends approximately $5,000 to train
each employee before even putting that employee to work."
Approximately one quarter of those employees live outside the
state of Alaska and fly to Prudhoe Bay every two weeks, coming
to work for Kakivik from all across the Lower 48. She stated,
"It really is a bidding war to get those people to come up here
right now." She explained that there are not enough trained
personnel to do the work "in Alaska or throughout the whole
United States," and it is becoming more difficult to provide
sufficient incentives to get the job force to come to Alaska to
work. Ms. Ferguson noted that employees who live in remote
areas of Alaska are also migrating into urban centers because of
the high cost of living.
MS. FERGUSON stated her belief that one of the state's most
valuable resources is its senior citizens. She warned that
costs are being raised which are causing a migration of seniors
out of the state. She indicated that it is not desirable to
lose the state's seniors, and said the state should "create
mechanisms" that would encourage seniors to stay in Alaska. Ms.
Ferguson relayed the importance of the university system and the
military in Fairbanks, for example, and warned that without
incentives for them to stay or the infrastructure to keep them
there, "we're going to lose them." She talked about the
connection between outward migration and national security -
"people moving in your ports, your harbors, your airports." She
echoed Representative Cissna's previous remarks that those
people with the ability to keep things working are going to
disappear.
MS. FERGUSON, in response to a request for clarification from
Representative Cissna, specified that the purpose of her travel
to Juneau was solely to address the energy crisis issue. In
response to a follow-up question, she said, "We're going to try
to go to the finance committees, we're going to go to the urban
legislators, [and] we're going to personally meet with as many
people as we can. If there are opportunities or venues for
testimony, we will go to them, and also speak our issues for
them."
REPRESENTATIVE CISSNA recommended that the committee hold "a
gathering" to hear these people who have come so far at such
great cost.
MS. FERGUSON, in regard to a previous question from
Representative Neuman, noted that BBNC has hired energy experts
and consultants and has had the benefit of advice from Chuck
Logsdon. She said Mr. Logsdon is helping BBNC to draft proposal
amendments for both PCE and the home heating fuel [bills]. She
noted that Mary Ann Pease - an energy consultant, is involved.
She reminded the committee that Mr. Logsdon was the chief
economist for "Oil & Gas" for the State of Alaska for 25 years.
Both individuals have been working intensively, she said, "so
that we can also be part of the solution to this." She added,
"And we would like to make their expertise available to you,
too."
11:52:55 AM
TIEL SMITH, Manager, Land and Resource Department, Bristol Bay
Native Corporation (BBNC), testifying on behalf of BBNC, stated
that he joins in support of those calling for immediate relief
of the urgent energy crisis in Alaska. He said BBNC is one of
the few regional Native corporations that, since its inception,
has been able to pay regular and increasing dividends to its
shareholders. However, even those dividends, combined with the
PFD, cannot deflect the current energy crisis and its effect on
rural Alaska. Mr. Tiel said it is because of background and
current occupation that he is compelled to address "a piece of
what is happening."
MR. TIEL noted that he grew up in Dillingham, worked seasonally
off the coast of King Salmon, and currently serves those who
live in the Bristol Bay Region year-round. As a life-long
fisherman in Bristol Bay, he said he has just returned from the
salmon fishing season. He said this year was the first in many
that the fishermen have had a chance to fish the main season at
its state-leased "net locations" rather than being pulled into
the crowded special harvest areas in the Naknek River; however,
that good fortune was impacted by the high cost of fuel. He
noted that while gasoline prices in urban areas are around $4.50
a gallon, it is rising past $6.00 a gallon in the King Salmon
and Dillingham areas. That factor, combined with the limit
restrictions placed upon fishermen by processors, has made a
season mediocre that could have been of economic benefit, he
said. Mr. Tiel pointed out that many fishing operations use
their profits to purchase winter heating oil reserves, which he
said is a basic necessity. Often, rural Alaskans do not know
what the price of heating oil will be until the fall barge
arrives; however, historically the price is noticeably higher
than the summer price. Many families, he warned, will be
challenged to purchase enough heating oil to sustain them
through the coming winter.
MR. TIEL said that it is not just fuel costs which are impacted.
He explained, "There is a whole spiraling web of related
services that have boosted prices to accommodate for the high
cost of fuel." Mr. Tiel, reemphasized that rural areas are more
adversely affected than urban areas, because he said jobs are
limited and incomes are low, while the cost of living continues
to increase. Current fuel prices, he noted, are "widening the
divide," and no one sees an end to the situation in the near
future.
MR. TIEL expressed his support of the proposed $1,200 economic
rebate legislation as one method by which to "deliver an
immediate and needed solution." He also strongly urged the
legislature not to take too long to come to a decision, because
"families need to fill their tanks with oil in time for the
quickly approaching winter." In conclusion, Mr. Tiel said he,
along with others, realizes that long-term solutions need to be
explored, but he said the current legislation is needed to fill
"the urgent need present today."
11:58:26 AM
HEIDI VEACH, testifying on behalf of herself, noted that she has
a small farm at the Tonsina North Agricultural Development. She
said she is in favor of the proposed $1,200 economic rebate;
however, she expressed concern regarding the dates in the bill.
She explained, "I'm not sure why there is a necessity to have an
August 15 date ... if you don't want the money for some reason."
She noted that the application period is [not until] October 1
to November 30, but she emphasized that the current conditions
in the Copper River valley have included rain and frost in the
past week, and people are already in need of using the amount of
fuel usually not consumed until about October 1. She questioned
why applications for the rebate could not be made available in
September, so that relief can come immediately to people.
MS. VEACH stated that one of her biggest challenges currently is
the price of gasoline, which she needs in order to drive to
work. She reported that jobs are available, she said, but
because of low wages, long commutes, and high fuel costs at
$4.86 a gallon, many jobs are not being filled. She noted that
even though it is on the road system, Gakona [Elementary] School
has closed this year because of people leaving the rural area.
Ms. Veach concluded by reiterating that although she supports
the rebate, she would like it to be available sooner.
12:01:37 PM
DAVE TRANUHAN, testifying on behalf of himself, stated his
support of HB 4002 and HB 4003 as a short-term answer to utilize
while the state works on its long-term energy plan. Mr.
Tranuhan said he has lived in Western Alaska for approximately
60 years, and is now a retired senior citizen in his 80s. He
reported that some of the seniors in his community last winter
were forced to choose between "heat or eat," and he predicted
that this year would be worse. He said he knows friends who
have closed down all the rooms but one in their houses because
they could not afford to heat the entire house. Mr. Tranuhan
said all Alaskans need assistance. He said, "What is making the
state very wealthy is making Alaskans less wealthy and some
destitute." He observed that there is a migration into and out
of Bethel, Alaska, and that movement is cause by high energy
costs. Energy affects all costs - every utility, he said. Mr.
Tranuhan encouraged the legislature to support the short-term
assistance to all Alaskans. He said the legislature will never
find an answer that is totally fair across the state, because
the cost of living is much higher in rural Alaska. He remarked,
"The further you go out, the higher the cost of energy." Mr.
Tranuhan reported that the least expensive gasoline available in
his community is running about $6.00 a gallon. Mr. Transom
thanked the committee for taking testimony statewide, and in
particular, thanked Representative Salmon for his e-mails
regarding this issue. Furthermore, he expressed his
appreciation for "the governor's notion for presenting this."
12:05:36 PM
RICH STASENKO, Treasurer, City of Shishmaref, testifying on
behalf of the City of Shishmaref, said the city must provide
heated water for its school and will have a difficult time
staying within its fuel budget because of the rising cost of
energy. He opined that raising rates is not a reasonable
option, because community members are already dealing with
higher utility costs. Mr. Stasenko acknowledged that the state
has given a revenue-sharing increase, but said while he
appreciates it, the increase is not enough to meet the
increasing costs [of energy]. Therefore, Mr. Stasenko requested
that the state offer a subsidy for the fuel purchased by the
city. He explained that fuel is delivered to Shishmaref by
barge, and the cost for this winter's fuel is still
undetermined. He said the city ordered 23,000 gallons of fuel
this year, 9,000 gallons less than the amount ordered last year,
because the city cannot pay the quoted price for their usual
amount. Furthermore, Mr. Stasenko indicated that what was
ordered will not be "what we get landed," because the price is
anticipated to be even higher. He said he would like the state
to "look at these communities that have to deal with this budget
shortfall."
MR. STASENKO spoke about security as it relates to energy. He
related that people have siphoned gasoline out of snow machines
and four-wheelers, a problem which Mr. Stasenko indicated could
be exacerbated by the rising cost of fuel, and he noted there is
a shortage of police and village public safety officers (VPSOs)
in the community.
MR. STASENKO, regarding long-term solutions, said geothermal
energy is available where there are hot springs. In conjunction
with the topic of hot springs, he noted that there are
communities that are being forced to move because of global
warming and soil erosion, and those communities face challenges
finding suitable ground that does not have permafrost. He
stated, "There are these areas that have geothermal potential,
and I don't think anybody's looking at locating or creating
communities and developing geothermal energy as a long-term kind
of solution."
MR. STASENKO said he appreciates the $1,200 rebate as a means to
offset the stress on people and to possibly prevent problems
that could occur in the short-term. He also expressed
appreciation for the work of and efforts made by the
legislature.
12:09:59 PM
JIM WILLIAMS, testifying on behalf of himself, said he considers
every resident of Alaska to be his business partner, because the
population of the state jointly owns the mineral resources of
the state. The royalty oil coming down the pipeline is being
sold at a vast profit "elsewhere," he said. He opined that some
of that royalty oil should be provided to the refiners in the
state at cost, whereby the refiners and distributors could make
a profit, while passing the savings "for the difference of the
crude oil cost" on to consumer - carte blanc. Mr. Williams said
the only way the state will survive is to decrease the cost of
diesel, gasoline, and oil - a measure he opined the state has
within its capacity to carry out.
12:13:27 PM
TOM LAKOSH, testifying on behalf of himself, said he is
disappointed that amendments have not been offered for the bills
before the committee. He said the posting of legislation on the
legislature's web site is insufficient, because many words are
cut off on his web browser. He continued:
When I suggested amendments to properly apportion the
monies available for those who actually need it, I was
told that there's not enough time to write proper
legislation. I would suggest that that's
unconstitutional with respect to the resource rebate
program, because there's a constitutional requirement
to use resources for the maximum benefit of the people
where it is clearly discerned that the primary duty of
the state is to protect the health, welfare, and
education of the citizens of the state. It is
necessary to assure that the proper levels of funding
for all of those programs are, indeed, funded first,
and where there are additional programs that agencies
have to administer and have been told to limit their
budgetary requests or have otherwise been curtailed
through legislation or vetoes, those must first be
considered to the maximum benefit of the people before
a wholesale rebate program, like the one suggested in
[HB] 4002 would be passed.
12:16:21 PM
REPRESENTATIVE DAHLSTROM asked Mr. Lakosh for the name(s) of the
person(s) who had told him there was no time to "do a bill
properly."
MR. LAKOSH recollected that it had been Co-Chair Fairclough,
during the hearing in Anchorage, who had mentioned that there
was an immediate need to get the bill through the legislature
[to benefit] the people who are in dire need. He continued:
It is abundantly clear that you could, in fact, change
the law very easily. In [HB] 4003 you have listed as
the recipient of funds the Department of Health &
Social Services. You could just put the $800 million
in that, and have them administer the whole program if
this is for the people who actually need the subsidies
instead of the public at large, [of] which a large
percentage do not need subsidies to bear the cost of
energy.
REPRESENTATIVE DAHLSTROM stated that she was present at the
meeting to which Mr. Lakosh referred, and she interpreted the
comments differently. She offered her belief that no amendments
to the bill have been moved yet.
MR. LAKOSH expressed his hope that the primary function of
government to provide for health, safety, education, and welfare
be considered first, prior to the wholesale distribution of the
resource wealth.
CO-CHAIR FAIRCLOUGH spoke to assure Mr. Lakosh that she had
never intended to say that the legislature could not amend the
bill. Regarding Mr. Lakosh's suggestion to turn the money over
to the Department of Health & Social Services, she said many
people would have to be consulted to get that done, and she does
not know if there are time constraints during this special
session that would prohibit the committee from doing that. She
confirmed Representative Dahlstrom's remark that no amendments
had yet been offered.
12:19:21 PM
ANN MALLARD, Principal, [Eagle Community School], testifying
first in her capacity as principal, noted that schools no longer
receive PCE credit, and she stated her belief that the state
should add schools back on the list of recipients of those
credits. She reported that the Eagle Community School pays 65
cents per kWh, which she said really cuts into the amount of
money the district has. Ms. Mallard, although acknowledging
that the subject of her next request is not included in [HB 4002
and HB 4003], asked that the legislature fully fund the
district's transportation costs, sharing her understanding that
the present level at which the legislature covers that expense
is 80 percent.
MS. MALLARD, next testifying on behalf of herself, said she and
her husband have kept track of their bills since moving to
Eagle, Alaska. She relayed that without PCE credit, she and her
husband would pay the same rate as the school per kWh; however,
with PCE, they pay approximately 27 cents per kWh. She said
that helps, but noted that she and her husband have made a
concerted effort to conserve their energy consumption. Ms.
Mallard said when people ask her how she can afford to live in
Eagle, they do not realize that she walks to work, and she and
her husband have increased their use of wood to heat their home
and are planning to cook with wood.
MS. MALLARD expressed her hope that the legislature would
consider allotting the $1,200 rebate per household, rather than
per person, and also to use "some need-based criteria."
Regarding weatherization and rebates, she told the committee
that she has tried to spur interest in the minimum of three
families that it would take to have an "energy rater" brought to
Eagle. She indicated that the cost of bringing in an energy
rater is $500 up front. She added, "And then, to be eligible
for the ... second mortgage and that kind of thing is kind of
out of the reach of most of our families. So, even if there
were energy raters available through the AHFC supplemental
programs, we're not getting a lot of takers, just because of the
upfront costs." She asked the legislature to consider providing
low- or no-cost loans for "retro fits and those kinds of
things," that would be a big help to some who need individual
solutions - not necessarily community solutions - since Eagle is
such a small community.
MS. MALLARD ended by asking that the legislature subsidize the
rate of fuel, so that other entities, perhaps even rural
residents, would pay only what they paid last year - the rest of
the balance being picked up by the state as a rebate, perhaps
like PCE.
12:24:30 PM
JASON METROKIN, Director, Shareholder & Corporate Relations,
Bristol Bay Native Corporation (BBNC), testifying on behalf of
BBNC, said he would offer an abbreviated version of his written
testimony in the interest of time. He characterized the
proposed $1,200 energy rebate as a helpful policy decision, but
one that would only help keep many residents afloat. He said
while the rebate may be a short-term solution to get people
through the winter, Anchorage and other urban centers are not
prepared for the migration of rural residents if they are forced
to leave to escape the high cost of living in a village.
MR. METROKIN said BBNC shareholders and Bristol Bay residents
are beneficiaries of the PCE program. He asked the legislature
to consider an amendment to PCE that would allow for indexing
the current 52.5 cent per kWh cap, in order to meet fluctuations
in North Slope/West Coast oil prices on a monthly basis. He
explained that this would allow for appropriate equalization of
power costs that keep in line with the dramatic rise in oil
prices. He called this a "medium-term" solution, which he said
recognizes that when the cost of fuel increases because of the
price of oil, so, too, do state revenues that provide for
increased funding of PCE.
MR. METROKIN related that BBNC has supported energy solutions
for the region over the years, having participated in wind
studies in several communities with the help of the U.S.
Department of Energy, AEA, AVEC, and other communities. He
stated, "While there is hope for wind energy in our region, it
is not happening over night." He said BBNC has engaged in
conversation with Naknek Electric regarding that company's
geothermal project, and has toured Bristol Bay, "gaining an
understanding of the alternative energy options that are
realistically on the horizon." However, Mr. Metrokin explained
the problem is that "it will take some years to get these
projects beyond feasibility and into development for lowering
energy costs." He reported that as an ANCSA for-profit
corporation, BBNC has joined forces with its regional non-
profit, health corporation, housing authority, community
development quota (CDQ) group, and the Lake & Peninsula and
Bristol Bay Boroughs to form a regional Bristol Bay partnership.
The group has come to the table to address the aforementioned
and other energy solutions for the region, in conjunction with
the statewide leadership of the Alaska Federation of Natives -
again having addressed energy as a number one problem. In
closing, Mr. Metrokin urged the committee to support HB 4003
and HB 4003, and to consider an amendment to HB 4003 as it
pertains to indexing the current 52.5 cent per kWh cap to meet
fluctuations in oil prices.
12:27:53 PM
SARA WILLSON, testifying on behalf of herself, said while
listening to all the preceding testimony, she wrote down two
phrases: "immediate problem" and "PFD-type payment." She
presented three arguments related to HB 4003. First, she
suggested an alternative to using fossil fuels for a short-term
fix would be to use "those funds" to conduct research and
develop alternative fuels, such as hydro, geothermal, and wind.
Second, she pondered whether other states would question
Alaska's need for federal funding if the state were able to
provide each of its [qualifying] residents with $1,200. Third,
she said the use of the term "PFD-type payment" makes her wonder
if the proposed payment could create an expectation of an annual
payment to help with fuel costs.
12:31:19 PM
DOUG ISAACSON, Mayor, City of North Pole, mentioned a chart by
AEA and suggested that "charges" and "percent of the income" are
actually much greater than the chart shows. For example, Mayor
Isaacson noted that the City of North Pole has 49 accounts with
Golden Valley Electric Utilities and is paying double what it
paid last year. He explained that a fuel surcharge has been
added. He stated that North Pole is the energy resource
production for the Interior and for much of Alaska. The area
has two refineries: Flint Hills, which is royalty oil driven,
and produces about one-fourth of the area's heating oil; and
Petro Star, an Arctic Slope Regional Corporation (ASRC), which
has a contract with ConocoPhillips Alaska, Inc., and which
produces three-quarters of the area's heating oil. Petro Star
also produces a lot of the [JA-1] fuel that is barged into
communities. He said, "Two different solutions; you can't just
use royalty oil to fix them both." He indicated that Golden
Valley Electric Utilities operates a 60 megawatt diesel power
generator. He continued:
We cannot turn off the 60 megawatt power plant in
North Pole, even if we got Healy clean coal going on,
which you know is slated for a court date in June, and
so, I asked -- you don't predicate any solutions based
on that power plant getting on line, but we are paying
exorbitant prices for electricity alone.
I strongly support a fuel cost cap for utilities if
that's how we can get it, because we need regional
support.
MAYOR ISAACSON said he, personally, is opposed to the proposed
$1,200 rebate; however, he emphasized how strongly his
constituents support the rebate, saying they fear there will be
no other help. He concurred with Mayor Jim Whittaker's remark
that the local government is "feeling the rural community's
pain." He added, "... We get it; we really do." He continued:
Our heating oil costs are four times the amount of the
Cook Inlet area. This has astronomically doubled.
When we double our cost, we are really doubling our
cost. We're not literally hamstringing our people -
we're bankrupting our people. The City of North Pole
operates off of a sales tax revenue, primarily. We've
already had businesses shutting down. One of them,
owned by one of your own members of the legislature,
cited his reason this last week as, "declining
economic circumstance," and also, "high cost of
energy."
We are a small little town of 2,000, [with a ] service
area of 35,000. We have over 17,000 cars driving our
main roads each day as they go to the three schools,
and so forth. If you want to be able to help reduce
costs to schools, if you want to keep people employed,
[and] if you want to be able to make sure we don't
have an economic crisis, I strongly urge this
committee to consider a regional cost equalization
that would include all areas that are relying upon
non-natural gas sources for heating oil or energy
production - electricity and so forth.
12:35:53 PM
The committee took an at-ease from 12:36:25 PM to 1:40:31 PM.
1:40:34 PM
CO-CHAIR LeDOUX called the House Community and Regional Affairs
Standing Committee back to order to continue public testimony on
HB 4002 and HB 4003.
1:41:10 PM
MARY ANN PEASE, Consultant, MAP Consulting, testifying on behalf
of the Bristol Bay Native Corporation (BBNC), expressed concern
that Alaska's economy may be negatively impacted if the
legislature does not act judiciously in response to the state's
energy crisis. Ms. Pease announced that her testimony would
focus on two approaches: PCE and "home heating equalization."
She continued:
As winter approaches, Alaskans statewide are facing
the economically uncomfortable prospect of a winter
with unprecedented costs for energy, particularly for
heating their homes and businesses. Nowhere is that
impact greater than here in Western Alaska where all
communities are dependent on local electric and fuel
sources that are burdened not only by the high cost of
the product itself, but also the transportation cost
to get it there.
On behalf of those communities, I want to urge you to
pass HB 4002 and HB 4003, to provide a small measure
of assistance to rural residents faced with the
economic dilemma of buying energy or other necessities
- but not both.
MS. PEASE, regarding PCE, stated her belief that an easy
solution would be to seasonally adjust the 500 kilowatt hours
per month "allocated to an eligible electric utility for sales
of power for actual consumption to each residential consumer."
She mentioned that she had done all the calculations. The
second component regarding PCE, she said, would be to consider
adjusting the 52.5 cents per kWh cap and to "recognize the
effect of the dramatically changing oil prices on the fuel
costs."
MS. PEASE noted that Alaska North Slope oil production is
falling; therefore, "programs to increase the use of alternative
sources of energy, as well as conservation and development of
new sources of oil and gas" will be needed to ensure affordable
power to all parts of the state.
MS. PEASE, regarding home heating, asked the committee to
consider an amendment "that would propose 500 gallons of heating
fuel to eligible Alaskan residents at a price equal to the Btu
equivalent in Anchorage, Fairbanks, and Juneau." She indicated
that her notes show how simple it would be to administer such a
plan. The intent of the proposed amendment would be to provide
a minimum lifeline amount of heating fuel to Alaskans who do not
live in urban Alaska. Ms. Pease said some people in rural areas
do not have a PCE utility, and her proposed plan would focus on
the fuel oil component, which makes up a large portion of those
rural residents' home heating costs.
MS. PEASE stated, "The short-term solution is definitely
improved by HB 4002 and [HB] 4003, but we need to invest in
infrastructure and mandate a renewable mix with fossil fuel for
our electric utilities - a strategy that should be part of the
overall energy plan for our state. Alternatives may take the
form of wind, hydro - even propane that we extract from the
North Slope - but the key message is that the current reliance
on fuel oil must be diversified." She commended the legislature
for its leadership on this critical issue.
1:45:15 PM
CO-CHAIR LeDOUX closed public testimony and opened committee
discussion, beginning with HB 4002. She announced that at its
last hearing, the committee had read amendments for the record,
but they had not been moved for adoption.
1:46:14 PM
REPRESENTATIVE OLSON [moved that the committee] adopt Amendment
1, labeled 25-GH4057\A.3, Cook, 7/21/08, which read:
Page 1, line 1, through page 6, line 2:
Delete all material and insert:
""An Act relating to Alaska resource rebates, and
increasing the amount of the 2008 permanent fund
dividend by the amount of the rebate; and providing
for an effective date."
BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF
ALASKA:
* Section 1. The uncodified law of the State of
Alaska is amended by adding a new section to read:
ALASKA RESOURCE REBATES. (a) To provide residents
of the state with an Alaska resource rebate, the
amount of the 2008 permanent fund dividend shall be
increased. After calculating the amount of the 2008
dividend under AS 43.23.025, the commissioner of
revenue shall add $1,200 to determine the total amount
of that dividend.
(b) Subject to appropriation, the amount
necessary to increase 2008 permanent fund dividends
under (a) of this section shall be transferred from
the general fund to the dividend fund (AS 43.23.045)."
Renumber the following bill section accordingly.
REPRESENTATIVE DAHLSTROM seconded that motion.
CO-CHAIR LeDOUX objected for purposes of discussion.
REPRESENTATIVE OLSON explained that Amendment 1 would tag the
rebate to the 2008 PFD, both for qualifications to receive the
rebate and as a vehicle to deliver the funds to the citizens.
He noted that Amendment 1 includes a title change.
1:47:06 PM
REPRESENTATIVE SALMON related his understanding that the
legislation already accomplishes the aforementioned.
REPRESENTATIVE OLSON deferred to representatives from the
administration.
1:47:31 PM
RANDY RUARO, Special Staff Assistant, Office of the Governor,
related his understanding that Amendment 1 deletes the existing
text of the legislation and replaces it with text that provides
that the payment method will be an additional line item on the
2008 PFD. The amendment doesn't change who is eligible and who
isn't as the [qualifying] applicants would be those who
[qualify] for the 2008 PFD.
REPRESENTATIVE OLSON clarified that the intent with Amendment 1
is to utilize [the residency requirements of] something that is
already in place in order to avoid having the residency and
participation requirements tested in court. For one who
qualifies to receive a 2008 PFD check, that check would be
increased by $1,200 to cover the proposed resource rebate.
1:49:15 PM
REPRESENTATIVE SALMON asked then if the legislation still
includes the application requirement of six months.
CO-CHAIR LeDOUX clarified that [adoption of Amendment 1] would
result in those who receive a 2008 PFD receiving an additional
$1,200.
REPRESENTATIVE OLSON confirmed that interpretation, adding that
[Amendment 1] is a one-shot deal until there is a permanent
long-term [energy] plan. By including the resource rebate in
the PFD, it can't be extended, he said.
1:50:05 PM
REPRESENTATIVE DAHLSTROM highlighted that another benefit of
[Amendment 1] is that the state is saved $580,000 that it
would've cost to send separate checks.
1:50:20 PM
MR. RUARO interjected that the total savings [with the adoption
of] Amendment 1 is estimated to be approximately $56 million
because the 45,000 individuals [who would've qualified under
Section 1(e)(2)(A)-(E) of HB 4002] would be eliminated.
1:50:41 PM
REPRESENTATIVE CISSNA expressed concern with those in need not
receiving help when they desperately need it. She related that
her constituents have told her they didn't feel they needed the
rebate, but instead wanted it to go to those who do. Therefore,
[Amendment 1] flies in the face of the majority of responses she
has received. Drawing from her experience prior to the issuance
of the PFD and afterwards, she also expressed concern that
people receive the PFD without essentially understanding where
it comes from and what it's all about. By combining the
resource rebate with the PFD, she opined that it "becomes a
bigger trip, ... a bigger toy that's purchased" and is
disconnected with the fact that [the legislature/state] is
trying to focus on long-term solutions.
1:53:26 PM
REPRESENTATIVE OLSON said that the only portion of the
administration's proposal that he is addressing with Amendment 1
is the portion that addressed the [resource rebate] that would
be provided to people on a per capita basis. He related that
although he agrees with Representative Cissna, it isn't anything
the legislation, HB 4002, contemplates.
1:54:25 PM
REPRESENTATIVE CISSNA opined that the way in which this matter
is addressed could start right away and be an incentive for
people to actually begin reviewing the problem. She further
opined that [Amendment 1] takes away the incentive [to address
the energy problem].
1:55:27 PM
REPRESENTATIVE DAHLSTROM said although she agrees with
Representative Cissna's intent, she takes a different approach.
She related her belief that if citizens know that they are
receiving a [resource rebate], they can make arrangements to
have things done in their households. She further related that
issuing a separate check for the resource rebate versus
combining that rebate with the PFD isn't going to ensure people
spend the money any differently. Furthermore, Amendment 1 would
save the state money that could be used to address long-term
projects. The [resource rebate], she opined, has nothing to do
with the PFD other than it will be issued on the same piece of
paper.
1:56:47 PM
REPRESENTATIVE SALMON pointed out that Amendment 1 deletes
Section 2, which repeals Section 1 on June 30, 2009.
REPRESENTATIVE OLSON said that is because the [resource rebate]
is a "one-shot deal through the 2008 permanent fund ...."
CO-CHAIR LeDOUX pointed out that the language in Amendment 1
only speaks to the 2008 PFD.
1:57:49 PM
CO-CHAIR FAIRCLOUGH stated her support of Amendment 1. She
recalled the testimony from throughout the state that related
the immediate need for the state to react [to the energy needs]
of communities in a broad-based fashion. One of the only ways
the state has successfully passed the challenges within the
court system is with the permanent fund eligibility
requirements. Many have testified about other ways in which
this committee and the legislature as a whole can address long-
and short-term energy crisis needs. However, bureaucracy,
politics, and government are somewhat bound by rules and
structures regarding how [proposals/plans] can move forward.
The aforementioned requires time, a thoughtful process, and
legal review. To perform the aforementioned in a 30-day session
is very difficult, she opined. Co-Chair Fairclough then
reminded the committee that the legislation before it is a
resource rebate not the energy issue. Amendment 1 takes away
the questions in rural Alaska related to the requirements for a
phone number and physical address because people have already
applied for the 2008 PFD and there already exists a database,
process, and [staff] in place. She pointed out that the
resource rebate before the committee creates an almost $500,000-
plus bureaucracy to implement a one-time program. Furthermore,
it tasks two different departments to do the same thing. She
characterized the aforementioned as a poor use of the state's
money. Recalling the committee discussion regarding those who
owe the state or others funds, Co-Chair Fairclough opined that
using the existing PFD structure, eligibility rules, and appeals
processes would make it much more likely that this particular
"intervention" could happen immediately without court challenge.
2:02:49 PM
CO-CHAIR FAIRCLOUGH noted that the one thing Amendment 1 lacks
is the ability to expediently place the resource rebate in the
hands of Alaskans. She then asked if there is a way in which to
put the PFD out in the first two weeks of September rather than
in October.
2:03:59 PM
JERRY BURNETT, Director, Administrative Services Division,
Department of Revenue, explained that the problem with such is
that the books don't close on the fiscal year until August 31.
Therefore, the dividend can't be calculated. Furthermore, the
division does an annual cycle of eligibility. It's impractical
to calculate the amount of the dividend based on earnings prior
to late August, early September. Mr. Burnett said that the PFD
can't go out much quicker than the already planned October 2
date for the first set of direct deposits due to the calculation
date.
CO-CHAIR FAIRCLOUGH recalled that Mr. Burnett has said that the
2008 PFD database would be used to issue the resource rebates
under the program proposed by the administration. She inquired
as to the difference.
MR. BURNETT explained that if a resource rebate was issued in
August, not everyone who's eligible would be captured.
Furthermore, at that point the division wouldn't know all of the
people who are going to be eligible for the 2008 PFD.
Therefore, perhaps 85-90 percent of those who would be eligible
would be paid in August, and then others would be paid as they
are determined to be eligible throughout the rest of the year.
CO-CHAIR FAIRCLOUGH surmised that there really isn't a clear
number of PFD recipients in October, when checks begin to be
issued.
MR. BURNETT clarified that in August, the eligibility
determinations for 10-15 percent of the PFD applications turned
in have not been completed, often that is because the department
is still waiting for information it has requested from the
applicants. By mid-September there is enough information to
determine, within a couple of hundred, [who will receive the
PFD]. He suggested that if the determination is made in August,
the numbers would be off by 1,000 or more in the total
eligibility count. The aforementioned changes the department's
ability to accurately determine the amount of the dividend. He
noted that there are other governmental processes, and they can
"only be accelerated so much."
2:07:36 PM
CO-CHAIR FAIRCLOUGH asked if the administration supports
Amendment 1.
MR. BURNETT offered his understanding that the administration is
not opposed to Amendment 1 and can support it, although there
are some concerns about the disabled veterans issue and some
other issues. The administration would like to discuss those
concerns with the next committee of referral to find a solution.
CO-CHAIR FAIRCLOUGH related her understanding that the issue
with the disabled veterans has been a problem for years as
disabled veterans haven't applied for the PFD because it would
disqualify them from receiving federal benefits. The resource
rebate program was crafted to capture those disabled veterans
who hadn't applied for the 2008 PFD.
MR. RUARO responded that is correct, adding that [the
administration] would work to try to find a solution in the next
committee of referral.
CO-CHAIR FAIRCLOUGH highlighted that she and Co-Chair LeDoux
spoke about bringing forward the issue with disabled veterans,
if the administration desired that it be fixed. If two checks
are going to be issued and there's an additional cost for the
second check, she questioned whether the [first check] could be
issued based on last year's PFD and then "gin up" with everybody
with the second check.
MR. BURNETT pointed out that the aforementioned would require
two checks for many people and wouldn't save administrative
costs over the original proposal. "In order to do this
practically, under this amendment, we really need to do it all
at once and we'd be doing a lot of the payments through direct
deposits under this set of circumstances," he explained.
CO-CHAIR FAIRCLOUGH said she appreciates that for someone who
receives direct deposit. However, [the committee has heard]
that people need to "advance the purchase of fuel to get into
smaller communities."
2:10:58 PM
CO-CHAIR LEDOUX returned to the remark that the administration
will seek a solution for disabled veterans, and asked if the
solution will only be in the context of this legislation or in
the context of the entire PFD program.
MR. RUARO answered that the intention is to develop a solution
in terms of the legislation before the committee. He noted that
he wasn't sure that anything beyond the aforementioned could be
achieved, given the scope of the call.
CO-CHAIR LeDOUX returned to the issue of when the earliest check
could be delivered. She recalled that PFD applications are due
by March 31, and thus by September 1 the department has all the
applications. Therefore, the department is merely trying to
obtain additional information from applicants.
MR. BURNETT replied yes, adding that applicants may have had
allowable absences that need to be explained or nonallowable
absences that require additional information. In many cases,
the signature page for individuals who have filed online hasn't
been received. Therefore, on September 1 there will be some
number of applications [that require additional information].
In further response to Co-Chair LeDoux, Mr. Burnett specified
that those [applications requiring further information] are in
the low thousands. He confirmed that the division has a good
idea regarding how many will be verified, and added that there
is a general pattern. However, he noted that the longer the
timeframe, the more accurate the information.
CO-CHAIR LeDOUX surmised then that the division could come up
with a "pretty darn good estimation" of the PFD by September 1.
MR. BURNETT answered that the division can have a good estimate.
However, it won't be until September that the final year-end
earnings, expenditures, and et cetera are available. To the
extent an estimate is done, the PFD would be underpaid.
CO-CHAIR LeDOUX opined that it's probably a small amount
compared to the benefit of obtaining the PFD earlier rather than
later for some people.
MR. BURNETT said that's correct for calculation purposes.
However, he said he wasn't sure how much earlier some of the
other processes, such as when checks can be mailed or
arrangements have been made for printing, have been scheduled.
2:16:26 PM
REPRESENTATIVE NEUMAN related his support for Amendment 1. He
then thanked Mr. Ruaro and Mr. Burnett for their work with the
committee on this legislation. He reminded the committee that
Amendment 1 addresses the ability to garnish for child support
payments or other payments to the state. Furthermore, Amendment
1 saves the state money while making government more efficient.
2:17:37 PM
REPRESENTATIVE CISSNA inquired what the earliest time would be
in which the rebates would be issued.
MR. BURNETT answered, "I know we can send it out in October. I
don't know for sure how much earlier than that it could be
gotten out." He offered to work with staff to determine how
early the [resource rebate] could be issued.
CO-CHAIR LeDOUX related her understanding the PFD check includes
language specifying that the check is "kind of an estimate."
MR. BURNETT echoed earlier testimony that when the division has
an estimate of how many people it will pay, it has an idea of
how many applicants who haven't been qualified will qualify, how
many will win their appeals, how many under 18 will apply in
future years, and which funds need to be reserved. The
aforementioned has been done, he said. He then reminded the
committee that the more eligibility that has occurred, the more
accurate the estimate.
CO-CHAIR LeDOUX posed a scenario in which one year the PFD is $5
less than the estimate. She asked if, in such a scenario, there
is a true-up line so that it's on the next year's PFD.
MR. BURNETT explained that if the division underestimates the
payment and a balance is carried forward, the amount that's
carried forward is simply added to the amount available for
payment in the next year.
CO-CHAIR LeDOUX opined, "It kind of sounds like to me that if
you really wanted to get these things out in early September,
that it would be a doable thing."
MR. BURNETT reiterated that there are a number of administrative
processes and he doesn't know which could occur more quickly.
2:20:07 PM
REPRESENTATIVE CISSNA commented that the timing is probably the
critical thing in her mind. She opined:
It goes straight back to that original question that
we had several meetings ago and that is: What is
this? Is it a rebate on the grand amount of money
we've been making and we're going to share it with the
people of Alaska or is it a rebate that's based on the
energy costs that people are ... being driven into
lower classes than they started out in because of the
energy costs? And so, our state is getting more and
more wealthy, and our citizens are getting less and
less. ... It almost sounds like it would be the same,
but the way you say it says a huge amount to the
people of the state and it also frames amendments that
are still there and one of those amendments may go
away with this. But, the amendment I plan on making
is directly tied to the fact that we're talking about
the fact that people have been paying out a huge
amount and they're going to pay out more and exactly
what that's doing to the state.
REPRESENTATIVE CISSNA, drawing from recent testimony, opined
that the legislature should address what people are paying and
take care of those who are paying a large portion of their
incomes [for energy].
2:22:20 PM
REPRESENTATIVE OLSON opined that it's a matter of personal
philosophy and related that he would never tell anybody how to
spend their money or what to spend it on. He said he believes a
good portion [of the proposed resource rebate] will go toward
energy-related issues, fuel, or gasoline.
REPRESENTATIVE CISSNA said she doesn't disagree, but highlighted
that cooler temperatures are already occurring and the money is
needed now. Therefore, providing the money in October will be
too late. She noted her agreement with Co-Chair LeDoux that
perhaps the division could be looser with the estimate of the
PFD because people would likely prefer to receive the funds
earlier, although it may be short $10 or so.
2:24:24 PM
CO-CHAIR LEDOUX inquired as to when people could realistically
expect to receive the resource rebate if HB 4002 were to pass as
written.
MR. BURNETT answered that if the funds were available, the
division would issue approximately 580,000 checks for $1,200 in
August, with the remainder being sent out on a weekly basis
throughout the remainder of the calendar year.
MR. RUARO pointed out that the estimate from the Division of
Finance is the end of August and possibly the first week of
September. The difference, in terms of time, between HB 4002,
as written, and HB 4002, as amended by Amendment 1, could be
about 27-30 days.
MR. BURNETT interjected that the division is willing to [issue
the checks earlier], it's a matter of what can be done and how
soon it can be done.
2:26:14 PM
CO-CHAIR FAIRCLOUGH said that Amendment 1 minimizes the risk of
a challenge of the [resource rebate] program. She related that
she supports Amendment 1 because it uses the eligibility
requirements and database of the PFD, which is tried and true
and has withstood challenges in the past.
2:30:54 PM
REPRESENTATIVE CISSNA remarked that the risk factor exists on
all legislation the legislature passes. She stressed that the
state has problems that will change Alaska permanently, and this
is start of [addressing those problems]. Representative Cissna
said she's not in favor of Amendment 1 because of the timing of
the check.
REPRESENTATIVE DAHLSTROM called the question.
2:32:32 PM
CO-CHAIR LEDOUX removed her objection to Amendment 1.
There being no further objection, Amendment 1 was adopted.
2:32:56 PM
CO-CHAIR FAIRCLOUGH moved to report HB 4002 out of committee, as
amended, with individual recommendations and the accompanying
amended fiscal notes.
REPRESENTATIVE CISSNA objected.
2:33:12 PM
REPRESENTATIVE CISSNA pointed out that she had an amendment that
was read across.
The committee took an at-ease from 2:34 p.m. to 2:35 p.m.
2:35:38 PM
CO-CHAIR FAIRCLOUGH withdrew her motion.
2:35:48 PM
REPRESENTATIVE CISSNA moved that the committee adopt Amendment
2, which read:
An allocation of funds distributing state resources
for energy relief shall be calculated on a formula
using "heating degree days and the average regional
cost of one gallon of heating fuel or Btu equivalent."
CO-CHAIR FAIRCLOUGH objected.
CO-CHAIR LEDOUX said that since there was no second on the
motion to adopt Amendment 2, Representative Cissna couldn't
speak to it. She further stated that since there was no second,
Amendment 2 wasn't [available] for discussion.
REPRESENTATIVE CISSNA asked to make another comment.
CO-CHAIR LEDOUX said that Representative Cissna could not make
another comment.
REPRESENTATIVE CISSNA remarked that as a member of the committee
she would like to make another comment about the process.
CO-CHAIR LEDOUX said that Representative Cissna could make a
comment or object, but she was going to call for a vote.
2:36:34 PM
CO-CHAIR FAIRCLOUGH moved to report HB 4002, as amended, out of
committee with individual recommendations and the accompanying
revised fiscal notes.
REPRESENTATIVE CISSNA objected.
2:37:00 PM
REPRESENTATIVE NEUMAN objected, adding that although he intends
to vote against this legislation, he understands the need to
help Alaskans. He reminded the committee that he has asked the
Office of Management & Budget to provide a list of the funds for
which the state is committed to provide. He highlighted that he
hasn't been able to receive that information. Representative
Neuman emphasized his belief that the state will be in deficit
in the next four or five years and the only answer will be to
not issue PFDs and to institute an income tax. "To say that we
have a lot of extra money in this state is just wrong," he
remarked. He emphasized that there is a lot of dept in this
state. Representative Neuman said that he couldn't [support]
spending another $1.2 billion when the state doesn't know the
amount of the billions of dollars it owes. He characterized
this as a tough vote for him because he has to face those such
as seniors who can't pay their heating fuel bill.
Representative Neuman then emphasized that if this legislation
took $1.2 million and invested it in a gasline to Valdez,
hundreds of jobs in Alaska could be created. Furthermore, if
these funds were used to build a gasline in Western Alaska, he
suggested that many jobs could be created and resource
development costs would be lowered while the energy costs in
Western Alaska could be lowered. However, the aforementioned
hasn't be discussed or reviewed. Until such a discussion has
occurred, Representative Neuman indicated that he [can't support
this legislation]. He related his desire to use the [$1.2
million] to create jobs, and fund long-term investments in
Alaska that will save energy.
2:43:28 PM
REPRESENTATIVE NEUMAN then pointed out that there isn't even a
total of what will be spent for the five or six bills introduced
[this special session]. He issued an appology as follows:
I'm sorry that as your legislator, I just don't feel
that it's appropriate that we can do this when we
don't have an account on how much debt we already owe
in this state. I don't think that we have all these
extra billions of dollars. And I will really be sorry
when votes come up to have to try and charge an income
tax or take your permanent fund dividend away and I'm
really going to be sorry when we have to start cutting
these programs, programs to the needy .... ... State
spending has gone [up] 12 to 14 percent in our
operating budget [in] ... the last 5 or 6 six years,
another ... 23 percent last year; we cannot sustain
that.
2:45:05 PM
REPRESENTATIVE CISSNA, speaking to her objection, said she
objects to forwarding HB 4002, as amended, without having the
opportunity to introduce [Amendment 2] along with the attached
chart. Representative Cissna relayed that [a colleague] who
could've really explained the chart was told that the
[amendment] wasn't going to be heard. Representative Cissna
opined that HB 4002, as amended, is in opposition to what she
understood the governor was asking the [legislature] to do.
Amendment 2 was something that might have met what the governor
wanted and more. Representative Cissna reiterated that she
can't support HB 4002, as amended.
2:46:45 PM
CO-CHAIR LEDOUX said she doesn't believe Representative Cissna's
colleague was ever told the committee wouldn't hear an
amendment. She further said that her colleague may have been
told that it was unlikely that there were the votes to pass the
amendment. Co-Chair LeDoux then pointed out that Representative
Cissna could introduce legislation that the committee could
review, if that legislation qualifies under the governor's call.
Regardless of what one thinks of appropriateness, Co-Chair
LeDoux opined that the legislation deserves the ability to have
a vote of the full legislature.
2:48:05 PM
REPRESENTATIVE SALMON, drawing from his knowledge of the
problems in rural Alaska, related that some are on the verge of
being desperate. He announced that he supports the $1,200
[resource rebate] because it's the only immediate relief for
this winter.
2:49:59 PM
A roll call vote was taken. Representatives Salmon, Dahlstrom,
Olson, LeDoux, and Fairclough voted in favor of the HB 4002, as
amended. Representatives Neuman and Cissna voted against it.
Therefore, CSHB 4002(CRA) was reported out of the House
Community and Regional Affairs Standing Committee by a vote of
5-2.
2:50:43 PM
The committee took an at-ease from 2:50 p.m. to 2:54 p.m.
2:54:10 PM
CO-CHAIR LeDOUX announced that the committee would now focus
discussion on HB 4003.
CO-CHAIR FAIRCLOUGH offered her understanding that Co-Chair
LeDoux had taken public testimony on HB 4002 and HB 4003
simultaneously and subsequently closed public testimony. She
said she did not have comments to make pertaining to [HB 4003],
but questioned whether the administration may wish to offer
remarks for clarification.
2:54:43 PM
JERRY BURNETT, Director, Administrative Services Division,
Department of Revenue, noted that the amount of $800 million,
which is associated with the resource rebate, would probably be
amended to a different number in the next committee of referral
if the House Community and Regional Affairs Standing Committee
does not amend it. He indicated that number would be "somewhere
in the neighborhood of $744 million."
2:55:09 PM
REPRESENTATIVE NEUMAN said that for the reasons he stated
previously, he would most likely be a "no" vote on the
legislation. He said he knows many people who do not have
electricity, but run power off a generator, and "they will
receive nothing out of this." He said the increases in PCE will
affect those who are already getting money, while those who are
not getting assistance will continue in that vein. He
questioned what is being done to provide solar panels, loans, or
grants, or power line extensions, for example, noting that some
of his constituents live close to a power line, while no money
is being allocated to help connect them to it. He said it is
certainly a Native tradition and, he thinks, an Alaskan
tradition to help each other - to figure out how those who are
getting nothing can get something. He said Alaska's debt keeps
adding up - there is no way to even know how to add it up - and
there is no plan. He said as a legislator, he has tried to find
out how much the state is in debt and he cannot get an answer.
2:58:49 PM
REPRESENTATIVE OLSON said he will support the legislation, but
only because he thinks it is important enough to bring it before
the whole legislative body for consideration and a vote. He
said he would wait to see if the bill gets to the House floor,
at which point he would add his comments.
2:59:12 PM
REPRESENTATIVE CISSNA said she will vote in favor of the
legislation, but that she identifies with the comments made by
Representative Neuman. She specified that it is not the
legislation itself that she finds problematic, but rather the
committee process. She said the legislature focused for some
time on legislation related to AGIA, and now that that
legislation has passed, it is rushing through the energy issues
without taking the time "to do what needed to have been done."
Furthermore, she said before the legislature ever heard these
bills, it needed to know "what else was in the package and what
the big picture was." She stated that in her 10 years in the
legislature, this issue is of number one importance because it
affects the entire state. She noted that it costs $12,000 a day
"to have us here in this room." She said she thinks the
legislature should "do more," which is why she does not think
the committee "should have been passing either of these bills."
3:01:34 PM
CO-CHAIR LeDOUX, for the benefit of the public, remarked that
there have been five days of testimony on this issue. Other
than the PPT and the gas pipeline bill, she said she cannot
recall another bill hearing that included more public testimony.
3:02:07 PM
CO-CHAIR FAIRCLOUGH moved Conceptual Amendment 1, to ask the
legal department to provide the legislature with new language in
HB 4003 to match the changes already made in CSHB 4002(CRA).
She specified Sections 2, 3, and 5, and said the eligibility
requirements and attached fiscal note would be changed.
3:03:11 PM
MR. BURNETT responded that he has already prepared a draft
fiscal note for the Department of Revenue, based on that
amendment, and would get that to "our folks."
3:03:33 PM
CO-CHAIR FAIRCLOUGH said she is trying not to affect the
importance of the Alaska Energy Authority and PCE provided for
in the legislation. Those topics need to go forward so that
there can be a fuller discussion in the House and Senate Finance
Committees, she opined.
3:03:48 PM
CO-CHAIR LeDOUX asked if there was any objection to Conceptual
Amendment [1]. There being none, it was adopted.
3:04:06 PM
CO-CHAIR LeDOUX said she will vote to move the legislation out
of committee, but said she has problems with PCE "and the
communities that it doesn't include." For example, some of the
villages in Kodiak are not eligible for PCE, although they are
paying a substantial amount for energy. Other areas across the
state are experiencing similar problems. Co-Chair LeDoux said
she thinks the legislature should reevaluate the entire PCE
program to make it fairer to all communities around the state;
however, she said the legislation currently before the committee
is not the appropriate vehicle in which to do so.
3:05:36 PM
CO-CHAIR FAIRCLOUGH stated that when the governor and her
administration decided to give these bills to the legislature,
that "started a clock ticking that has a whole bunch of
bureaucracy tied to it." She opined that the reason that the
House Community and Regional Affairs Standing Committee is
trying to "streamline" to get the bills passed out of committee
is because there are only 30 days in the special session, and
only 14 of those days remain. Holding the bill back would
result in Alaska being left with nothing, she said. She offered
further details.
3:07:31 PM
CO-CHAIR LeDOUX, [although no motion had been made and no
objection was stated], asked if Representative Neuman maintained
his objection.
3:07:46 PM
REPRESENTATIVE CISSNA noted that in her six years on the House
Community and Regional Affairs Standing Committee, many issues
have been addressed for weeks, involving work groups. She
concurred with the previous comments of Representative Neuman
regarding the legislation.
3:08:33 PM
A roll call vote was taken. Representatives Cissna, Salmon,
Olson, LeDoux, and Fairclough voted in favor of the bill.
Representative Neuman voted against it. Therefore, CSHB
4003(CRA), with an amended forthcoming fiscal note, was reported
out of the House Community and Regional Affairs Standing
Committee by a vote of 5-1.
ADJOURNMENT
There being no further business before the committee, the House
Community and Regional Affairs Standing Committee meeting was
adjourned at 3:09:15 PM.
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