CS FOR HOUSE BILL NO. 152(FIN) "An Act establishing a renewable energy project account and a renewable energy fund and describing their uses and purposes." Senator Elton MOVED to ADOPT SCS CSHB 152(FIN), labeled 25- LS0413\J, Kane, 4/8/08. There being NO OBJECTION, it was so ordered. 3:10:29 PM DARWIN PETERSON, STAFF, CO-CHAIR STEDMAN, highlighted the changes in the new SCS. On page 1, there was a change in the title to accommodate the changes made in the bill. On page 1, line 9, the word "electrical" was removed. On page 2, line 19, the words "zero fuel costs" were removed. On page 2, line 21, the word "can" was previously "should". On page 2, lines 23-25, language was inserted to say that it is the intent of the legislature to appropriate $50 million in capital funds per year for the next five years, which is the sunset date of the bill. On page 2, line 26, Section 2 was added. The previous section created the renewable energy fund. Mr. Peterson emphasized that this change was the most substantive change in the bill. The references to the fund were removed and, instead, a renewable energy grant recommendation program was created. On page 2, line 31, the words "achieve a statewide balance of grant funds" were added. Mr. Peterson continued to explain that on page 3, line 5, a new subsection was added to require that the Alaska Energy Authority make recommendations to the legislature for grants to eligible renewable power projects. On page 3, lines 7- 10, a new subsection says that the recommendations will be provided no later than 10 days after the first regular session of each legislative session. On page 3, line 12, after the words "the authority shall", the words "make recommendations to the legislature" were added. Mr. Peterson related that page 4, line 11, deals with the make up of the advisory committee. It removes the Governor from the process so that the President of the Senate and the Speaker of the House will make all of the appointments. On page 4, lines 14 and 15, the word "electric" was inserted prior to the word "utilities". Page 4, lines 21 & 23, deals with appointments of a member of the House and of the Senate. The two appointments that were removed were from non-profit environmental groups and non-profit consumer groups. Mr. Peterson addressed page 5, line 10, after the word "animal" the words "or fish products" were inserted. Page 5, line 13, determines a five-year sunset. Page 5, Section 4, is a temporary law section that provides for grants to be made in FY 09. The Alaska Energy Authority would submit their list of recommendations to the Legislative Budget and Audit (LB & A) Committee up to $50 million. LB & A would have 45 days to review those recommendations. Page 6, lines 7-9, is transition language that creates a tier for the appointments to the board. 3:15:39 PM Senator Dyson asked why coal is not included. He referred to page 2, line 4, cost of fuels, and maintained that the cost of coal is also going up. He also said that coal could be included in line 21. He maintained that the list on page 5, line 9, was not renewable energy sources. He argued the merits of the inclusion of coal. Mr. Peterson reported that the sponsor continues to object to the inclusion of coal. He called the list on page 5, line 9, energy sources, but not necessarily renewable energy sources. Senator Dyson maintained that he does not understand the logic of the argument. Co-Chair Stedman suggested he make an amendment to the bill. 3:18:48 PM Co-Chair Stedman MOVED to ADOPT Amendment 1: Page 4, lines 11 - 12: Delete "jointly by the speaker of the house of representatives and the president of the senate" Insert "by the governor" Co-Chair Stedman OBJECTED for discussion purposes. He explained that the amendment returns to the previous version of the bill where the governor appoints five members of the council. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. AT-EASE: 3:19:27 PM RECONVENED: 3:20:39 PM Co-Chair Hoffman MOVED to ADOPT Amendment 2: Page 1, line 1: Delete "and," Page 1, line 4, following "grants": Insert "; establishing a state heating assistance  program in addition to the federal heating assistance  program; and providing for an effective date" Page 2, line 25, following "in": Insert "secs. 3 and 6 of" Page 2, following line 25: Insert a new bill section to read: "* Sec. 2. AS 36.30.850(b) is amended by adding a new paragraph to read: (46) contracts for delivery of home heating assistance under AS 47.25.626." Renumber the following bill sections accordingly. Page 5, following line 12: Insert a new bill section to read: "* Sec. 4. AS 47 is amended by adding new sections to read: Article 3A. Alaska Heating Assistance Program.  Sec. 47.25.621. Alaska heating assistance program.  (a) The Alaska heating assistance program is established in the Department of Health and Social Services to provide expanded eligibility for Alaska residents for home heating assistance, to the extent funds are appropriated by the legislature for that purpose. (b) The heating assistance program established under this section is in addition to the federal low- income heating and energy assistance provided under 42 U.S.C. 8621 - 8629 (Low-Income Home Energy Assistance Act of 1981), as amended, and implementing regulations. Sec. 47.25.622. Duties. The department shall (1) administer the Alaska heating assistance program provided under AS 47.25.621; (2) adopt regulations under AS 44.62 (Administrative Procedure Act) to carry out the purpose of the program; (3) coordinate payments among other heating assistance programs to avoid duplication of payments. Sec. 47.25.623. Eligibility. An individual is eligible for home heating assistance payments under the Alaska home heating assistance program if the individual (1) is a resident of the state; (2) is physically present and resides in a home in the state when the home heating costs are incurred; (3) has gross household income above 150 percent but that does not exceed 225 percent of the federal poverty guideline for Alaska set by the United States Department of Health and Human Services and revised under AS 42 U.S.C. 9902(2); (4) meets other eligibility requirements specified in regulations adopted under AS 47.25.622. Sec. 47.25.624. Appeal rights. Except as provided in AS 47.25.626(e), an individual who receives a determination from the department that denies, limits, or modifies home heating payments under AS 47.25.621 - 47.25.626, other than a determination based on insufficient funding of the program, may request a hearing before the department under regulations adopted by the department. Sec. 47.25.625. Ability to recover or recoup  improper home heating assistance payments. An individual is liable to the department for the value of assistance improperly paid under AS 47.25.623 if the improper payment was based on inaccurate or incomplete information provided by the individual. In a civil action brought by the state to recover from the individual the value of the assistance improperly paid, the state may recover from the individual the costs of investigation and prosecution of the civil action, including attorney fees as determined under court rules. Sec. 47.25.626. Regional heating assistance  program. (a) The department may develop a regional Alaska heating assistance program for the administration of AS 47.25.621 - 47.25.626 to provide home heating assistance in a uniform and cost-effective manner in a region of this state if an Alaska Native organization is authorized to implement a federally approved tribal family assistance plan that includes that region and has been awarded a tribal energy assistance grant for a program that includes that region under 42 U.S.C. 8623(d). (b) The department may award contracts to implement a program developed under (a) of this section. A contract authorized for delivery of home heating assistance under a regional Alaska heating assistance program under this section is exempt from the competitive bid requirements of AS 36.30 (State Procurement Code). Subject to appropriation, a contract under this section must be in an amount that represents a fair and equitable share of the money appropriated for the Alaska heating assistance program under AS 47.25.621 - 47.25.626 to serve the state residents specified in (a) of this section. The authority provided under this section to contract is in addition to the authority to contract in AS 47.05.015 or other law. (c) The department may award a contract under this section only to an organization that (1) has been awarded a tribal energy assistance grant under 42 U.S.C. 8623(d) for a program that includes that region; (2) agrees to administer home heating assistance under AS 47.25.621 - 47.25.626 to state residents in the region; and (3) agrees to implement an appeals process as described in (e) of this section. (d) Records pertaining to recipients of home heating assistance under a contract awarded under this section are confidential and not subject to disclosure under AS 40.25.100 - 40.25.220. (e) An organization that receives a contract under this section shall provide an appeals process to applicants for or recipients of home heating assistance covered by the contract awarded under this section. The appeals process must be the same as the method available under AS 47.25.624, except that the decision reached shall be considered a recommended decision to the department. Within 30 days after receiving a recommended decision, the department shall review the recommended decision and issue a decision accepting or rejecting the recommended decision. If the department rejects the recommended decision, the department shall independently review the record and issue its final decision. The final decision of the department on the matter is appealable to the courts of this state. (f) If the department establishes a regional Alaska heating assistance program and awards a contract to provide home heating assistance under this section, a person applying for home heating assistance under AS 47.25.621 - 47.25.626 in the region of the state covered by the regional home heating assistance program may obtain home heating assistance from the department only through the organization designated by the department to serve the region." Renumber the following bill section accordingly. Page 5, line 20: Delete "sec. 2" Insert "sec. 3" Page 5, line 21: Delete "sec. 2" Insert "sec. 3" Page 5, line 23: Delete "sec. 2" Insert "sec. 3" Page 6, line 8: Delete "sec. 2" Insert "sec. 3" Page 6, following line 9: Insert new bill sections to read: "* Sec. 8. The uncodified law of the State of Alaska is amended by adding a new section to read: TRANSITION: RETROACTIVITY OF REGULATIONS. Notwithstanding a contrary provision of AS 44.62.240, if the Department of Health and Social Services expressly designates in a regulation adopted under AS 47.25.622(2), enacted by sec. 4 of this Act, that the regulation applies retroactively to November 1, 2007, and is necessary to implement, interpret, make specific, or otherwise carry out AS 47.25.621 and 47.25.623, enacted by sec. 4 of this Act, the regulation may apply retroactively to November 1, 2007. * Sec. 9. The uncodified law of the State of Alaska is amended by adding a new section to read: RETROACTIVITY OF CERTAIN PROVISIONS OF THIS ACT. AS 47.25.621 and 47.25.623, enacted by sec. 4 of this Act, are retroactive to November 1, 2007. * Sec. 10. This Act takes effect immediately under AS 01.10.070(c)." Co-Chair Hoffman OBJECTED. ROB EARL, STAFF, REPRESENTATIVE MARY NELSON, explained Amendment 2: Amendment #2 establishes the Alaska Heating Assistance Program within the Department of Health and Social Services (DHSS) to expand eligibility for Alaska residents for home heating assistance. The program is specifically in addition to the federal LIHEAP or Low- Income Home Energy Assistance Program. Thirty-three states currently contribute LIHEAP money in addition to the federal assistance dollars - Alaska is not yet one of them. Currently, only Alaskans earning less than 150% of the federal poverty guideline for Alaska are eligible for the federal LIHEAP assistance program. Eligible households receive grants averaging $780 per household per winter. Amendment #2 will serve an estimated 3800 additional households state-wide with incomes between 150-225% of the poverty guideline. This amendment is intended to give the Department the authority to provide a lump-sum, retroactive payment to eligible recipients to assist with heating costs incurred during the winter of 2007-2008. Co-Chair Hoffman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 3:22:52 PM Senator Elton MOVED to ADOPT Amendment 3: Page, 5, lines 7-8 are amended to read: (A) wind, solar, geothermal, hydrothermal, wave, tidal, river in-stream, or hydropower; Co-Chair Stedman OBJECTED. Senator Elton explained that the amendment takes away some of the ambiguity in the list of renewable energy resources beginning on page 5, line 7. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. Co-Chair Stedman reported that Amendment 4 was withdrawn by Senator Olson. 3:24:58 PM Co-Chair Stedman MOVED to ADOPT Amendment 5: Page 3, line 1: Add "and matching funds," after "eligibility" Page 3, lines 3 and 4: After legislature, delete rest of line 3 and 4. (1) develop a methodology for determining the order of projects that may receive assistance and will achieve a statewide balance of grant funds, including separate requirements for grant eligibility and matching funds, and adopt regulations identifying criteria to evaluate the benefit and feasibility of projects for which an applicant applies for support from the legislature [WITH SIGNIFICANT WEIGHT BEING GIVEN TO THE AMOUNT OF MATCHING FUNDS AN APPLICANT IS ABLE TO MAKE AVAILABLE]. Co-Chair Stedman OBJECTED. SARAH FISHER-GOAD, DEPUTY DIRECTOR OF OPERATIONS, ALASKA INDUSTRIAL DEVELOPMENT AND EXPORT AUTHORITY AND ALASKA ENERGY AUTHORITY, DEPARTMENT OF COMMERCE, COMMUNITY AND ECONOMIC DEVELOPMENT, explained that the amendment clarifies that matching funds should be required for the project. The intent is to avoid determining what a significant weight would be. Co-Chair Stedman WITHDREW his OBJECTION. There being NO OBJECTION, it was so ordered. 3:25:36 PM Senator Olson MOVED to ADOPT Amendment 6: Page 1, line 1: Delete "and," Page 1, line 4, following "grants": Insert "; and establishing an Alaska Renewable Energy  Task Force" Page 1, line 8: Delete "The" Insert "For secs. 2, 3, 5, and 6 of this Act, the" Page 2, line 25, following "in": Insert "secs. 2 and 5 of" Page 2, following line 25: Insert a new subsection to read: "(c) For sec. 4 of this Act, the legislature finds that (1) energy issues are among the most critical issues in the state; and (2) a thorough assessment of present and future state energy needs and requirements is necessary." Page 5, following line 13: Insert a new bill section to read: "* Sec. 4. The uncodified law of the State of Alaska is amended by adding a new section to read: ALASKA RENEWABLE ENERGY TASK FORCE. (a) There is established in the legislative branch of state government the Alaska Renewable Energy Task Force. The task force consists of seven voting members appointed as follows: (1) the speaker of the house of representatives shall appoint three members from the house of representatives; (2) the president of the senate shall appoint three members from the senate; and (3) the governor shall appoint one member. (b) The chair of the task force shall be a legislative member selected by a majority vote of the members of the task force. The staff of the members who are legislators shall serve as staff to the task force. (c) The task force shall prepare a report that includes (1) an assessment of future statewide renewable energy needs; and (2) recommendations for a statewide energy plan to fulfill the state's renewable energy needs. (d) Members of the task force are entitled to transportation expenses and per diem allowances provided by law. (e) The task force shall meet at least four times. The task force may meet in communities in the state that are using or considering sources of renewable energy. (f) The task force shall submit written reports of its findings and recommendations to the legislature (1) before March 1, 2009; and (2) before March 1, 2010. (g) The Alaska Renewable Energy Task Force is terminated on April 16, 2010." Renumber the following bill section accordingly. Page 6, following line 9: Insert a new bill section to read: "* Sec. 7. Sections 1(c) and 4 of this Act are repealed April 16, 2010." Co-Chair Stedman OBJECTED. Senator Olson explained the amendment rolls the CS for HB 404, as it came out of Community and Regional Affairs Committee, into HB 152. It establishes an Alaska Renewable Energy Task Force. Co-Chair Stedman asked how long the task force would run. Senator Olson said two years. Co-Chair Stedman REMOVED his OBJECTION. There being NO OBJECTION, it was so ordered. 3:26:46 PM Senator Olson MOVED to ADOPT a Conceptual Amendment to allow Legislative Legal to conform language as needed. There being NO OBJECTION, it was so ordered. 3:27:46 PM Co-Chair Stedman noted a fiscal note which reflected a $50 million appropriation to the Alaska Energy Authority. He asked if AEA anticipates the need for additional money to operate the program. Ms. Sarah Fisher-Goad recommended that the appropriation be a capital expense, rather than an operating expense. She reported that she has provided a version J fiscal note, which changed the funding source to general fund away from the new renewable energy fund. With $50 million worth of projects, there will be a need for additional outside consultants for project evaluation. The fiscal note reflects an additional $100,000 for a consultant for FY 2009 and $250,000 for FY 2010 - 2013. Co-Chair Stedman MOVED to ADOPT new fiscal note CED, 4/9/08, 9:16 am. AT-EASE: 3:29:40 PM RECONVENED: 3:32:23 PM There being NO OBJECTION, the fiscal note was adopted. AT-EASE: 3:32:45 PM RECONVENED: 3:40:45 PM Senator Dyson MOVED to ADOPT Conceptual Amendment 7: Page 2, line 4, after "natural gas" add ", clean coal" Page 2, line 21, after "natural gas" add "and clean coal" Page 3, line 15, after "projects" add "and clean coal" Page 5, move lines 9 & 10 to a new subparagraph (5) Bio Mass Fuels Renumber as necessary Page 5, line 12, add "shallow gas" Co-Chair Stedman OBJECTED. Senator Dyson explained that the amendment brings consistency to the bill. Clean coal is added throughout the bill. Alaska has enough coal to supply all of North America for the next 400 years. Senator Dyson maintained that bio mass fuels are not renewable and should be in a new subparagraph. 3:43:50 PM Senator Elton objected to the page 5, line 9, change in the conceptual amendment. He addressed the issue of renewable resources. He used fish waste as an example of a renewable resource. Senator Dyson said he didn't remove the category, just moved it to another area in the bill. He commented that stewardship was needed when considering renewable energy sources. Co-Chair Stedman MAINTAINED his OBJECTION. A roll call vote was taken on the motion. IN FAVOR: Dyson OPPOSED: Elton, Thomas, Stedman, Olson The MOTION failed (1-4). AT-EASE: 3:47:00 PM RECONVENED: 6:18:58 PM CSHB 152(FIN) was heard and HELD in Committee for further consideration. 6:20:16 PM