SB 280-WATER/SEWER/WASTE GRANTS TO UTILITIES  MS. WILDA RODMAN, staff to Senator Therriault, sponsor of the measure, informed members that she was asked to submit a new committee substitute (CS) to deal with the following concerns: SB 280 would open up the pool of applicants too wide; and it would allow utilities to be eligible for solid waste grants, which was not the intent. The original bill allowed public utilities to apply if their rates were subject to the Regulatory Commission of Alaska (RCA). Under the proposed CS, a water and sewer utility is eligible to apply if it serves as the primary utility for a municipality and its rates are regulated by the RCA. The field was not narrowed down in the CS specifically to Fairbanks because the sponsor wanted to create an incentive to other communities that want to privatize. In regard to the solid waste issue, the proposed CS excludes solid waste grants by restricting eligibility to AS 46.03.030(b) (1)-(3). On page 1, line 11, of the CS, utilities are no longer eligible to apply for "(4) a solid waste processing, disposal, or resource recovery system." MS. RODMAN explained one last change in the proposed CS bases the grant match ratios on the population of a municipality. The original bill based the grant match ratio on the population of the public utility service area. The change is consistent with current statute. She pointed out that she worked with the Department of Environmental Conversation (DEC) to narrow the scope and used its definition of "primary." SENATOR LEMAN asked where the definition of "primary" is located in the proposed CS. MS. RODMAN said it is not and asked Mr. Easton of DEC to elaborate. She said the rationale is that "primary" is self- explanatory in that a primary utility serves the largest number of people in a service area. SENATOR LEMAN said it is not obvious to him in looking at Section 1 that the bill is restricted to water and wastewater projects and not solid waste. He asked for clarification. MS. RODMAN said that language is in Section 3 on page 2, line 15. With no further questions or discussion, SENATOR LEMAN moved to adopt the proposed CS to SB 280 (Craver, 03/04/02). CHAIRMAN STEVENS announced that with no objection, CSSB 280(L&C) was adopted. MR. DAN EASTON, Director of Facility Construction and Operations for DEC, informed members that he worked with Senator Therriault's office on the committee substitute. It maintains the focus of the program on municipal systems, be they private or publicly owned, as opposed to systems serving private developments, such as trailer parks or subdivisions. One effect of the committee substitute is to limit the increase in the size of the pool of eligible systems so instead of having 50 new eligible systems, there will be one or two. That means DEC does not anticipate an effect on its workload and expects to provide a zero fiscal note to the committee substitute. SENATOR LEMAN asked Mr. Easton his understanding of a primary utility, for the record. MR. EASTON said he is thinking of the Webster's definition, in other words, the primary utility would be the most significant or main utility. SENATOR LEMAN said he could not think of any competing water and sewer utilities, but both Chugach Electric and Municipal Light and Power are located in Anchorage and are both significant electrical utilities. He could argue that both utilities could meet the definition of primary. He asked Mr. Easton if he could think of a similar example in the water and sewer business. MR. EASTON said he could not. He noted there are two utilities in Fairbanks, but they have a common owner so would not qualify. SENATOR LEMAN commented that some communities have competing haul systems but DEC will have to sort out whether those companies meet the definition of a primary utility and might not even apply. CHAIRMAN STEVENS noted there was no further testimony or proposed amendments. SENATOR LEMAN moved CSSB 280(L&C) from committee with a zero fiscal note. There being no objection, CHAIRMAN STEVENS announced the motion carried and that the committee would take up SB 309.