HOUSE BILL NO. 4005 An Act amending the power cost equalization program, repealing the exclusion from eligibility for power cost equalization for certain power projects that take their power from hydroelectric facilities, and amending the definition of 'eligible electric utility' as it applies to the power cost equalization program and the grant program for small power projects for utility improvements; and providing for an effective date. Vice-Chair Stoltze MOVED to ADOPT work draft 25-LS1757\L, Kane, 8/4/08, as the version of the bill before the Committee. Representative Nelson OBJECTED. 7:53:11 PM Representative Nelson expressed more comfort with the previous version of the bill. She felt that the previous version struck a better balance in terms of region and helping people than the current version does. She took pride in the work that had been done. Representative Gara noted that the changes in the bill were all topics that the committee had favored. The heating provision and the electrical utility assistance were removed. 7:54:40 PM SUZANNE ARMSTRONG, STAFF, REPRESENTATIVE KEVIN MEYER, explained the major changes to the work draft. The Power Cost Equalization (PCE) provisions were removed, as were the provisions pertaining to the Low Income Heating Assistance Program (LIHEAP) and the provision relating to the State Heating Assistance Program. Remaining were the changes made to the bulk fuel loan fund and the revolving loan fund with limits increasing the loan amounts from $500,000 to $750,000. The resource rebate section was left intact with only one change; the dollar amount was increased from $1000 to $1200 per person. The suspension of motor fuel tax was left intact. Co-Chair Meyer reverted back to the Governor's original call of the $1200 for the resource rebate and the eight cent fuel tax suspension. 7:56:04 PM A roll call vote was taken on the motion. IN FAVOR: Hawker, Kelly, Stoltze, Thomas, Meyer, Chenault OPPOSED: Foster, Gara, Nelson, Crawford THE MOTION PASSED 6-4 7:57:13 PM Co-Chair Meyer MOVED to ADOPT Amendment #1, Page 3, Line 7, deleting "$1,000" and inserting "$1,200". Vice-Chair Stoltze OBJECTED. Co-Chair Meyer explained the drafting error on Page 3, Line 7 where the $1000 should read "$1200." Representative Hawker WITHDREW the OBJECTION. 7:57:41 PM Representative Kelly MOVED to ADOPT Amendment #2, #25- LS1757\M.4, Bullard\Kane, 8/4/08. Representative Thomas OBJECTED. 7:57:55 PM Representative Kelly explained that the amendment would be withdrawn. He asked to speak to the amendment. The amendment would allow a rebate or a low interest loan if an individual wanted to use a different heating method than oil, such as wood, wood chips, or pellets. These alternative fuel sources allow people to help themselves and reduce their dependence on oil. Amendment #2 was WITHDRAWN. 7:59:52 PM Representative Crawford stated that the amendment was good and should not be withdrawn and he encouraged Representative Kelly to offer it. 8:01:02 PM Representative Hawker MOVED to ADOPT conceptual Amendment #3, Line 29, Page 3. He explained that it was a provision repealing the suspension of the motor fuel tax on June 30, 2011 as written. It repeals section 5A only. The conceptual amendment was to change 5A to section 5 in its entirety. Representative Crawford OBJECTED for discussion purposes. Co-Chair Meyer explained the drafting error that was noticed by Representative Hawker. 8:03:06 PM Representative Crawford WITHDREW the OBJECTION. There being NO further OBJECTION, it was adopted. Representative Hawker pointed out that the credit should go to the Department of Law for the error's discovery. Representative Kelly mentioned the included penalty provision. He did not agree with the notion. He regretted the hassle of unhappy phone calls in the event of public upset. 8:05:19 PM Co-Chair Meyer reviewed the fiscal notes. He pointed out the resource rebate of $1,200 dollars for Alaska residents. The rebate could be used for heating and fuel assistance this winter. He recalled that the PFD comes out in early October, which is important to Alaskans preparing for winter heating costs. He wondered if there was potential that the PFD might be administered earlier than October. JERRY BURNETT, DIRECTOR, DIVISION OF ADMINISTRATIVE SERVICES, DEPARTMENT OF REVENUE, explained that the bill was initially introduced in August. The Governor had reviewed it and hoped to move it back, but there are a number of concerns to be addressed. There are scheduling items to guarantee that the appropriate warrant stock is in place. The Department of Revenue will attempt to get the checks out as soon as possible. 8:08:56 PM Representative Hawker requested the difference between an energy rebate and a resource rebate. Mr. Burnett explained that the rebate consists of a distribution of excess tax revenue that the state had received and will distribute to dividend eligible persons. It is not aimed at a specific use. Representative Hawker pointed out that there was not language in the bill requiring that the resource rebate was spent on energy related issues. Mr. Burnett affirmed that there was not language specifying a requirement regarding how the rebate is spent. He supposed that people would use the rebate money to pay heating bills, given the cost of energy this year. 8:10:55 PM Representative Gara did not accept the terminology concerning the equitability of the proposed distribution. The prior version of the bill recognized the inequity, and attempted to address it by helping those with the greatest need. He did not accept the line of reasoning that there is equity based on a change of the terminology. The bill is not equitable. Representative Gara asked if all of the individuals eligible for the hold harmless provision would have the money count as income and possibly have it garnished. Mr. Burnett replied that the rebate would not be garnished in the mentioned situation. Representative Gara could not find the hold harmless provision in the bill before the Committee. Mr. Burnett advised that the hold harmless clause is in the PFD statute and it applies to subsidized housing because it is a one- time payment. It would not be treated as part of the PFD. The clause is identified as a separate part of the PFD. The hold harmless that applies to PFD will apply to the hold harmless provision. There is a specific hold harmless section in the bill for veterans. 8:15:29 PM Representative Gara asked if hold harmless language was in the appropriations bill. Mr. Burnett responded that there is an appropriation for an additional hold harmless for Health and Social Services and the Veterans in the appropriation bill. Representative Hawker asked to clarify that in the appropriations bill there is specifically a paragraph earmarking funding to address those purposes. Representative Gara asked for a letter from the department addressing the hold harmless provision for low income housing and the Pioneer's Home issue. Mr. Burnett affirmed. 8:16:36 PM Co-Chair Meyer noted that the bill would be HELD until the Senate version arrives to Committee. 8:18:15 PM Representative Thomas stated that he originally believed that sufficient legislation would include a resource rebate of $1,500 and include the repealing of the fuel tax. He remembered speaking about an energy rebate since last session. He hoped the resource rebate would be increased to $1,400 dollars, because of the other aspects of the bill that were left out. He proposed that it occur on the House Floor. Representative Nelson pointed out that there are six different regions in the State of Alaska. Each region was initially represented with one piece of legislation; however, an individual living alone does not have their needs adequately addressed. She listed the items that were in the original version that helped ease the disparity. She suggested that the Committee had taken a step backward. She expressed hope that a "middle ground" could still be reached. 8:21:26 PM Representative Crawford wondered how many people would use the funding as a moving allowance to move from the Bush into the cities. He thought it was too little too late to help the rural areas. Co-Chair Meyer noted that HB 4005 would be HELD.