HB 36-SMALL BUSINESS ENERGY EFFICIENCY GRANTS    3:06:14 PM CO-CHAIR PRUITT announced that the first order of business would be HOUSE BILL NO. 36," An Act establishing the Alaska energy efficient small business grant fund and program." 3:08:22 PM JENNIFER SENETTE, Staff for Representative Kurt Olson, Alaska State Legislature, stated that HB 36 "mirrors" the existing successful Alaska Housing Finance Corporation (AHFC) energy rebate program. The existing energy rebate program benefits residential buildings and HB 36 intends to establish an energy rebate program to benefit small businesses, such that small business owners wishing to make energy efficiency improvements on their businesses can receive a rebate for some of their expenditures. In a manner similar to the residential program, an energy rater will evaluate the business structure before and after the improvements are made, thus the rebate is based on the amount of energy efficiency gained. Furthermore, HB 36 includes guidelines that businesses must meet as follows: 1. The assessed value of the structure does not exceed $1 million; 2. The structure must be owned by a business owner licensed in Alaska and who does not have outstanding liabilities to the state; 3. The structure must meet the additional criteria set by AHFC. Ms. Senette explained that extending the energy efficiency rebates to the commercial sector will encourage small businesses in the state to embrace energy efficiency. She acknowledged that some details of the proposed legislation are yet to be worked out, such as how the program will be capitalized. 3:11:42 PM REPRESENTATIVE OLSON further explained that a committee substitute (CS) is being prepared; one change under consideration is to base the evaluation of a structure on its square footage - instead of its assessed value - in order to better serve rural communities. He urged the chair to hear public testimony, but to hold the bill in committee. REPRESENTATIVE SADDLER asked why rebates will be extended to new construction. 3:13:17 PM MS. SENETTE acknowledged that most new buildings are built with energy efficiency in mind, however, the bill follows the parameters set by AHFC's home energy rebate program, and new homes are included in that program. REPRESENTATIVE SADDLER then asked whether the bill will authorize the state to provide second mortgages to businesses. CARY BOLLING, Government Relations Officer, Alaska Housing Finance Corporation (AHFC), Department of Revenue (DOR), responded that the present home energy rebate program has a separate component that allows an applicant to apply for a $30,000 loan for energy-saving improvements. After the work is done, the rebate is applied to the loan balance. However, AHFC does not have a loan program for businesses at this time. In further response to Representative Saddler, he said AHFC would undertake a similar program for businesses if one were appropriated by the legislature. 3:16:23 PM REPRESENTATIVE SADDLER called attention to page 2, line 11, of the bill and read, "None of the applicants for the grant has outstanding liabilities to the state." He asked what the sponsor intended by this language. REPRESENTATIVE OLSON indicated he was unsure; however, it is prudent to ensure that any previous liabilities to the state are current. REPRESENTATIVE PETERSEN asked whether a student loan from the state would disqualify an applicant. 3:17:53 PM MS. SENETTE offered to further define the language. 3:18:20 PM REPRESENTATIVE PETERSEN asked whether a large chain store like Wal-Mart would be able to apply if it had a small building. MS. SENETTE indicated yes, if it met the guidelines. REPRESENTATIVE OLSON opined the fiscal note would grow if applicants are qualified on their assets and liabilities. His personal experience with AHFC's home energy program was favorable, and his intent by this legislation is to extend the same benefits to small businesses. 3:20:22 PM REPRESENTATIVE PETERSEN agreed with the idea, and asked whether the legislation needs to define "a small business." The federal definition of 100 employees may not apply in Alaska. REPRESENTATIVE OLSON recalled legislation on this issue was to be included in the "omnibus energy bill" that passed last year, and offered to reassign HB 36 to the energy committee for further refinement. REPRESENTATIVE PETERSEN reminded the committee AHFC estimated an additional $75 million was required to continue its existing rebate and weatherization programs. 3:23:28 PM SEAN SKALING, Program Manager for Energy Efficiency, Alaska Energy Authority (AEA), Department of Commerce, Community & Economic Development (DCCED), informed the committee AEA has in place a commercial energy audit program funded by the American Recovery and Reinvestment Act of 2009 (ARRA). During the six- week application period, one hundred and thirty-five applications were received. He explained that this program will subsidize the cost of an energy audit for an amount from $1,000- $6,000 on a commercial building up to one hundred and twenty- five thousand square feet in size. Mr. Skaling opined the number of applications received indicates that there is a need for energy-related programs for the privately-owned commercial sector. 3:26:35 PM REPRESENTATIVE PETERSEN asked whether rental property would qualify for the small business energy rebate program established by HB 36. MS. SENETTE said she was unsure. REPRESENTATIVE SADDLER supported the idea of the bill. 3:27:26 PM [HB 36 was held for further testimony.] 3:27:48 PM The committee took an at-ease from 3:27 p.m. to 3:27 p.m. 3:30:34 PM