HB 197-HOME ENERGY RATING SYSTEM  3:05:14 PM CHAIR OLSON announced the consideration of HB 197. [CSHB 197(FIN) was before the committee.] 3:05:26 PM JEREMIAH CAMPBELL, staff to Representative Lance Pruitt, sponsor of HB 197, stated that HB 197 recognizes the Alaska Housing Finance Corporation (AHFC) as the state's authorizing agency for the Home Energy Rating System (HERS). This legislation seeks to protect the investment that AHFC has already made in developing its own Alaska-specific rating system software called AkWarm. This investment is jeopardized because non-governmental, for- profit, third-parties are currently attempting to be identified in federal legislation as the state's HERS verifying agency. If successful, these outside entities would control state policy on the issue. The AkWarm software is directly tied to the state's home energy rebate and weatherization programs, interest rate reductions, and Alaska Building Energy Efficiency Standards. HB 197 will enable AHFC to ensure that any home energy rating system utilized in Alaska will be appropriate for Alaska's climate. SENATOR KOOKESH asked if he could name a specific non-government third-party. MR. CAMPBELL replied the Residential Energy Services Network (RESNET) is the entity that's currently active in the Lower 48. He deferred further questions to Mr. Green from AHFC. 3:07:42 PM BOB GREEN, Rural Housing and Research Programs, Alaska Housing Finance Corporation, Department of Revenue (DOR), explained that RESNET started as the national organization for state energy rating officials that segued first into a 501(c)(3) and then into a for-profit corporation called RESNET. Its role is to help approve home energy rating systems used in the Lower 48, particularly for states that do not want to get into that business. By comparison, Alaska, through AHFC, already plays a significant role in the HERS. The AkWarm software was specifically developed for Alaska and about 100 home energy raters have been trained. The AHFC wants to ensure that it has a direct relationship with the federal government and that a third-party doesn't insert itself and dictate policy in this state. MR. GREEN explained that the AkWarm software was specifically developed to acknowledge Alaska's different weather patterns and unique conditions. He opined that it's unlikely that any rating system software that's created in the Lower 48 would do the same. HB 197 assures that any rating system that's used in the state will be closely examined to make sure that it's appropriate with regard to energy conservation and home construction in the state of Alaska. 3:10:45 PM CHAIR OLSON asked why a government entity should run the program when a private entity such as RESNET can do it more efficiently. He noted he didn't see a fiscal note. MR. CAMPBELL responded that the bill has a zero fiscal note. CHAIR OLSON questioned giving the state what is essentially a monopoly when private enterprise tends to operate more efficiently. MR. GREEN explained that the AHFC is statutorily prohibited from issuing loans on homes that do not meet the minimum building energy efficiency standard. Currently this is four star plus. The AkWarm software is used to measure homes to make sure that they meet that mark and thus qualify for AHFC financing. He noted that several years ago AHFC looked at the same public/private question and concluded that it was most important to ensure that home ratings are accurate. AHFC decided that the best way to do this was to create and maintain public domain energy rating software and to invest in training home energy raters. To date, about 100 home energy raters have been trained and they're all proficient and certified. The private sector has used this mechanism as a marketing tool to sell an energy efficient product, which makes a nice working partnership between the AHFC and the building industry. 3:14:02 PM CHAIR OLSON asked if it would adversely affect home builders to have an effective date that falls in the middle of the construction season. MR. GREEN said he didn't believe so because the AkWarm software tool and AHFC trained energy raters are already in widespread use. There is the possibility today, however, for a builder from the Lower 48 to build a house in Alaska that's rated three star plus and have it financed by Freddy Mac or Fanny Mae. But AHFC couldn't finance that home in the event of a resale because it doesn't meet the minimum four star plus rating. The Alaska building industry has keyed in on this and recognizes the benefit of building to AHFC energy specifications such that financing is available from any funding source. CHAIR OLSON asked if that puts other lending institutions at a disadvantage. MR. GREEN replied Freddie Mac and Fannie Mae recognize the standard that AHFC is encouraging builders to achieve and the building industry is telling the financing institutions that it is building energy efficient products that will qualify for all available financing. It's a good marketing tool. 3:16:59 PM CHAIR OLSON asked who opposes the bill. MR. CAMPBELL replied there's been no opposition and both AARP and the Homebuilders Association have stated support for the bill. CHAIR OLSON noted that no one had signed up to testify. 3:17:31 PM SENATOR WAGONER moved to report CSHB 197(FIN), version B, from the committee with individual recommendations and attached fiscal note(s). CHAIR OLSON announced that without objection, CSHB 197(FIN) moved from the Senate Community and Regional Affairs Standing Committee.