HOUSE BILL NO. 214 "An Act authorizing the Department of Environmental Conservation to award grants for the control of air emissions or the development and administration of air quality control programs; and providing for an effective date." Co-Chair Hawker commented that HB 214 resulted from conversations of the economic stimulus package. He explained that $2 million could be available to the Department of Environmental Conservation (DEC) for grant awards for air emissions development and air quality control programs. The Department of Environmental Conservation has had limited participation in the program in the past. The new stimulus money creates a competitive grant program that would extend to municipalities. House Bill 214 provides the generic authority to issue grants, subject to appropriation. 2:26:59 PM Representative Austerman noted that HB 214 also provides the department with blanket authority when necessary. Representative Kelly read from the sponsor statement, "The authority is needed so that DEC can distribute funds available through the Air Quality Grant-Diesel Emission Reduction program in the American Recovery and Reinvestment Act (AARA) of 2009." He believed there to be an inconsistency between the bill and sponsor statement. 2:28:23 PM Co-Chair Hawker acknowledged that the wording could be clarified. He explained that authority is necessary for the department to distribute funds through the stimulus package, but the authority is not limited to the package. Representative Kelly maintained that the language was inconsistent. 2:29:15 PM ALICE EDWARDS, ACTING DIRECTOR, DIVISION OF AIR QUALITY, DEPARTMENT OF ENVIORMENTAL CONSERVATION, testified via teleconference, that the legislation authorizes the Division of Air Quality to award grants related to air quality control programs to communities and others entities. The statutory authority could be used for sub-grant funding received from the Environmental Protection Agency (EPA). The department receives EPA grant funds for programs and projects to reduce air pollutants from emissions of diesel engines. The new authority allows the division to grant funds to municipalities for local diesel emission reduction programs. She remarked that directly funding local programs and projects through the granting program would be efficient, and allow more flexibility in distribution of funds to Alaska's communities. 2:31:03 PM Representative Fairclough asked if the division would create a new position to oversee the broadened authority. Ms. Edwards replied no. Representative Kelly asked how the cases are currently handled. Ms. Edwards remarked that the division looked into agreements with other state agencies for different projects, exploring the use of the procurement process to distribute funds, she emphasized that the granting process would be more efficient. 2:32:04 PM Co-Chair Stoltze closed public testimony. Representative Kelly questioned if the $2 million in stimulus funds was contingent on the passing of the legislation. 2:33:13 PM Representative Co-Chair Hawker replied that the Office of Management and Budget with the Department of Environmental Conservation have identified the program as a statutory necessity. 2:33:42 PM MARIT CARLSON VAN DORT, SPECIAL ASSISTANT TO THE COMMISSIONER, LEGISLATIVE LIASON, DEPARTMENT OF ENVIRONMENTAL CONSERVATION, reiterated that the additional granting authority is needed to best use the stimulus funds. She added that the funds could be distributed through other methods, but this method would be the most efficient. Representative Kelly expressed his desire that the bill be limited to the purpose identified in the sponsor statement. 2:35:43 PM Representative Fairclough questioned the possibility of limiting the authority to ARRA 2009 funding rather than giving total grant authority. She believed there would be cost to the state to rewrite regulations for grant giving authority. She wondered if the state would be in compliance if it only allowed the granting of the ARRA 2009 money, as opposed to the full amount. Co-Chair Hawker explained that after discussions with the involved departments, it was felt that continued authority was necessary for the existing program to operate more efficiently. Representative Fairclough asked Ms. Edwards how the grant process is currently run, without the grant authority. Ms. Edwards explained that the grant program is new. She listed several entities that the department has been working with. 2:38:52 PM Representative Fairclough requested a dollar amount. Ms. Edwards reported that the initial grant for the program was $295,000. Representative Fairclough asked how long the program had been in existence. Ms. Edwards replied that the first grant was received in the fall of 2008. 2:39:31 PM Representative Kelly maintained his concern in granting the department more authority. He questioned the level of importance, at this time, of allowing the department ongoing authority when deciding the use of the stimulus dollars. 2:40:12 PM AT EASE 2:40:48 PM RECONVENED Co-Chair Hawker entered into record an email from the Division of Administrative Services with the Department of Environmental Conservation (DEC) (copy on file.) The language in this bill is exactly verbatim as requested by ADEC concerning the grant authority. He stressed the importance of committee support of the bill. Representative Kelly understood that DEC needed the authority to issue the stimulus money. His concern was with the request for additional authority. He wondered if language could be written into the bill to limit the department's grant authority to the stimulus dollars. 2:42:15 PM Vice-Chair Thomas remarked that often small villages are out of compliance and cannot receive grant applications. The bill would allow rural communities to work through DEC to obtain grant monies. He believed that allowing the department the grant authority would be beneficial to rural village communities. 2:43:46 PM Co-Chair Stoltze reported on the zero fiscal note attached to the bill. Co-Chair Hawker MOVED to report HB 214 out of Committee with individual recommendations and the accompanying fiscal note. Representative Kelly OBJECTED. A roll call vote was taken on the motion. IN FAVOR: Crawford, Fairclough, Joule, Salmon, Thomas, Austerman, Stoltze, Hawker OPPOSED: Foster, Kelly Representative Gara was absent from the vote. The MOTION PASSED (8-2). HB 214 was REPORTED out of Committee with a "do pass" recommendation and with a new zero fiscal note from the Department of Environmental Conservation. 2:45:35 PM