Legislature(2009 - 2010)BELTZ 211

02/10/2009 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS

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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSSB 48(CRA) Out of Committee
Heard & Held
Bills Previously Heard/Scheduled
        SB  93-MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT                                                                    
CHAIR OLSON announced consideration of SB 93.                                                                                   
4:08:06 PM                                                                                                                    
JOE  PASKVAN, Senator,  Alaska State  Legislature, read  from his                                                               
sponsor statement:                                                                                                              
     Some  communities in  Alaska  have  been designated  as                                                                    
     non-attainment areas  for PM 2.5  by the EPA.  Based on                                                                    
     the requirements  of the Clean  Air Act, the  state and                                                                    
     those impacted  local governments  have three  years to                                                                    
     develop attainment plans designed  to bring air quality                                                                    
     into compliance with federal air standards.                                                                                
     SB  93  is  needed  as  a first  step  to  allow  local                                                                    
     municipalities  the latitude  in developing  tax credit                                                                    
     programs  to address  the important  public health  and                                                                    
     community compliance  issues that result from  poor air                                                                    
     SB  93  is  designed   to  provide  optional  tools  to                                                                    
     municipalities that  can be  used to  create incentives                                                                    
     for  individuals  to  take actions  that  will  improve                                                                    
     local air quality and reduce fuel consumption.                                                                             
     SB  93 expands  the discretion  of municipalities  in a                                                                    
     manner  that  allows,  by ordinance,  the  creation  of                                                                    
     programs  that  will  offer property  tax  credits  for                                                                    
     actions that  the local governing body  determines will                                                                    
     improve   air   quality.   This  bill   requires   that                                                                    
     eligibility, conditions and other  criteria for the tax                                                                    
     credits be established by ordinance.                                                                                       
SENATOR PASKVAN said the SB 93  can be used by municipalities for                                                               
exchanging old wood  stoves for EPA certified  stoves, which will                                                               
significantly reduce  fine particulate emissions. It  can include                                                               
incentives  to improve  fuel consumption  and to  convert from  a                                                               
carbon-based system to  alternative energy. SB 93  is designed to                                                               
provide  a full  range  of options  for  local municipalities  to                                                               
address air quality. There is a zero fiscal note attached.                                                                      
4:10:44 PM                                                                                                                    
CHAIR  OLSON asked  what  incentives can  produce  a zero  fiscal                                                               
SENATOR PASKVAN  said it won't  cost the state.  The municipality                                                               
will  provide   tax  credits.  People  from   Fairbanks  will  be                                                               
testifying on what  option they are considering. This  is a first                                                               
step to improve air quality and meet the EPA's timeline.                                                                        
4:11:43 PM                                                                                                                    
CHAIR OLSON asked if this is a property tax credit.                                                                             
SENATOR PASKVAN said yes.                                                                                                       
4:11:55 PM                                                                                                                    
JIM  CONNOR,   Air  Quality  Specialist,  Fairbanks   North  Star                                                               
Borough, said  Senator Paskvan  did a good  job of  outlining the                                                               
issues. In September, 2006, the  EPA lowered the allowable levels                                                               
of PM 2.5, otherwise known  as fine particulates that are smaller                                                               
than a blood cell. It went  from 65 micrograms per cubic meter to                                                               
35. Fairbanks  regularly hits 40 to  50 during the winter,  so it                                                               
fell  out  of  attainment  with  the EPA.  The  majority  of  the                                                               
pollution is  coming from space heating  and transportation. This                                                               
bill allows the borough to  address the heating component without                                                               
finding  money.  "This  really   provides  us  with  a  wonderful                                                               
incentive, and I would really like to see this passed."                                                                         
4:13:43 PM                                                                                                                    
CHAIR OLSON asked if there is a problem with particulate matter.                                                                
MR.  CONNOR  said yes,  there  is  a  tremendous amount  of  fine                                                               
particulates in the Fairbanks area.  From the hillside, "it looks                                                               
like the  place is on fire  just because of all  the smoke that's                                                               
sitting in the valley."                                                                                                         
CHAIR OLSON asked if it is about health troubles or what.                                                                       
MR.  CONNOR  said,  "We  get  many  calls  from  people  who  are                                                               
beginning  to have  health problems.  The  most sensitive  people                                                               
call first."                                                                                                                    
CHAIR  OLSON  asked if  he  is  talking  about people  with  lung                                                               
problems, like asthma and emphysema.                                                                                            
MR. CONNOR said, yes: respiratory and heart disease.                                                                            
CHAIR OLSON asked about the burden to people who burn wood.                                                                     
MR.  CONNOR said  there are  very efficient  devices for  burning                                                               
wood,  so the  inefficient units  will be  targeted. There  is an                                                               
estimated  5,000 wood  stoves  that are  not  EPA certified.  "We                                                               
figure  we'll get  at least  a factor  of 10  reduction from  the                                                               
emissions ... by replacing them with more efficient units."                                                                     
4:15:12 PM                                                                                                                    
CHAIR OLSON said people who have  the older stoves are least able                                                               
to afford  a new one.  They will have to  put the cash  out first                                                               
before they get a tax credit. "How  do you take the burden off of                                                               
those that are most burdened already?"                                                                                          
MR. CONNOR said  the borough will be pursuing  wood stove change-                                                               
out  programs,  like  the  one  with  the  Alaska  Department  of                                                               
Environmental  Conservation  (DEC).  But   some  people  will  be                                                               
burdened by spending money first and getting the credit later.                                                                  
4:16:30 PM                                                                                                                    
SENATOR  THOMAS suggested  that  people are  not  required to  do                                                               
anything by this law. They would do  it on their own if they want                                                               
to and can benefit by the tax credit.                                                                                           
MR. CONNOR said  there is also the economic  incentive of getting                                                               
more heat  for their fuel  in their  stoves. But it  doesn't look                                                               
very attractive  to someone who is  asked to pay up  to $2,000 to                                                               
replace  a  working system.  It  is  not  required. There  is  no                                                               
requirement for anybody to change stoves.                                                                                       
4:17:27 PM                                                                                                                    
GLEN  MILLER,  Transportation   Director,  Fairbanks  North  Star                                                               
Borough, said  he didn't  intend to  testify but  after reviewing                                                               
the bill he encourages its support.  It will speed up the process                                                               
that Fairbanks' needs  to go through. There are  only three years                                                               
to come into  attainment. He doesn't think  control measures will                                                               
be enacted for at least another  year. It leaves very little time                                                               
for  Fairbanks.  This  bill will  provide  early  incentives  for                                                               
individuals  who   choose  such  modifications.  It   could  make                                                               
attainment much  easier. Future control  measures may  be relaxed                                                               
due to this incentive program.                                                                                                  
4:19:24 PM                                                                                                                    
SENATOR  THOMAS  asked  how  many  times  Fairbanks  exceeds  EPA                                                               
attainment numbers.                                                                                                             
MR. MILLER said it is typically 20-30 times per year.                                                                           
CHAIR OLSON asked the consequences of that.                                                                                     
MR. MILLER said  that after two violations, Fairbanks  can be put                                                               
in  the  status  of  nonattainment.   It  could  ultimately  have                                                               
financial consequences, but this  is a health-based standard, and                                                               
the  public  is at  risk.  It  could  impact DOT  [Department  of                                                               
Transportation] money for Fairbanks and the state.                                                                              
CHAIR  OLSON  asked what  happens  if  attainment isn't  attained                                                               
after three  years. Will there  be heavier measures  against wood                                                               
stove burning and transportation activities?                                                                                    
4:21:13 PM                                                                                                                    
MR. MILLER said there are three  years to produce a plan and five                                                               
years  to achieve  attainment. After  that, an  extension can  be                                                               
requested. Ultimately the state is  responsible, and if the state                                                               
can't  fix it,  EPA will  take action,  which could  mean federal                                                               
sanctions or controls. Other states  have prohibited burning wood                                                               
CHAIR OLSON said it is a  concern if people can't heat their home                                                               
because wood is the only option.                                                                                                
4:21:52 PM                                                                                                                    
NADINE WINTERS,  Presiding Officer, Fairbanks North  Star Borough                                                               
Assembly, said Fairbanks  is in a difficult  position. Recent oil                                                               
prices have caused more people to  heat with wood. The borough is                                                               
looking  for ways  to reach  attainment and  improve air  quality                                                               
without making  it onerous  on individuals  and businesses.  If a                                                               
person has a non-EPA certified  stove, SB 93 will allow Fairbanks                                                               
to give  a property tax  credit for buying a  new stove. It  is a                                                               
way to deal  with EPA and health issues. Another  concern is that                                                               
being  out of  attainment is  a potential  hindrance to  economic                                                               
development,  especially   for  any  project  that   requires  an                                                               
environmental  assessment  or  impact statement.  She  asked  the                                                               
committee to support the bill.                                                                                                  
4:24:41 PM                                                                                                                    
SENATOR  FRENCH  said  he is  envious  of  Fairbanks's  financial                                                               
strength. He  doesn't think Anchorage  would extend a  tax credit                                                               
to anybody  for anything. He  asked how  much money will  be made                                                               
available for this credit.                                                                                                      
MS.  WINTERS said  she doesn't  know  how many  people heat  with                                                               
wood. This  approach is an  "avoidance of taxes  collected versus                                                               
direct  expenditure."  It will  be  a  difficult trade  off  even                                                               
though Fairbanks doesn't have a  shortfall. Taxpayers are feeling                                                               
pressure  everywhere.  She  said  the costs  will  be  looked  at                                                               
closely  and the  borough will  assess  "what we're  going to  do                                                               
without ...  as a  result of  this program."  But the  stakes are                                                               
really  high; it  involves the  community's  physical health  and                                                               
future economic development.                                                                                                    
SENATOR  THOMAS  said  he  understands there  has  been  a  rapid                                                               
increase in coal  burning stoves when the price of  fuel oil went                                                               
up, which  is not good. "The  government's response to that  as a                                                               
health  hazard is  to withhold  transportation funds.  It usually                                                               
seems to be the first thing  that they approach." He asked if she                                                               
has numbers on coal stoves sold in the Fairbanks area.                                                                          
4:27:13 PM                                                                                                                    
MS. WINTERS  said she doesn't  know, but coal stoves  are serious                                                               
contributors to PM 2.5 and there  has been an increase in them as                                                               
a result  of oil prices.  The emissions tend  to stay low  to the                                                               
ground,  which is  not good.  She  is not  sure there  is an  EPA                                                               
compliant coal stove. That will  be another difficult legislative                                                               
SENATOR  THOMAS asked  if the  tax credit  will be  available for                                                               
exchanging a coal stove for a cleaner burning stove.                                                                            
MS. WINTERS said yes.                                                                                                           
4:29:02 PM                                                                                                                    
ALICE  EDWARDS,   Acting  Director,  Division  of   Air  Quality,                                                               
Department  of  Environmental   Conservation,  Juneau,  said  the                                                               
division received  a grant of under  $100,000 to do a  pilot wood                                                               
stove change-out program. It is a  drop in the bucket compared to                                                               
what is  needed. She  expects to see  about 80  stoves exchanged.                                                               
The division  is proceeding  with it this  spring. At  this point                                                               
the  program   doesn't  necessarily  target  low   income  homes,                                                               
although  there are  some other  programs in  the state  offering                                                               
weatherization and energy assistance to low income homes.                                                                       
CHAIR OLSON said, according to  the bill sponsor, there are 5,000                                                               
to 6,000 wood stoves with an  estimated 20 to 30 percent that are                                                               
not EPA compliant.                                                                                                              
4:30:44 PM                                                                                                                    
SENATOR PASKVAN  said communities such as  Fairbanks have already                                                               
been designated non-attainment  areas, so [SB 93]  allows them to                                                               
use tax  credits to encourage  voluntary conduct  by individuals.                                                               
That will  help them  figure out  if reducing  fine particulates,                                                               
increasing  energy  efficiency,   or  converting  to  alternative                                                               
energy works  best for  each community. That  is a  "carrot" that                                                               
will help avoid EPA's "stick".                                                                                                  
4:32:20 PM                                                                                                                    
SENATOR KOOKESH  asked how  to control air  quality with  all the                                                               
forest fires. "You always have  fires around that area." Whenever                                                               
he is  in Fairbanks,  he drives  through smoke  that is  not from                                                               
wood stoves.                                                                                                                    
SENATOR PASKVAN said he understands  because he has lived through                                                               
two of those  summers. The bill is primarily  designed to control                                                               
the problem  during winter  when there  are inversions  that trap                                                               
fine particulates at ground level.  That is why Fairbanks differs                                                               
from other communities.                                                                                                         
CHAIR OLSON asked if he  means that particulates aren't a problem                                                               
during forest fires.                                                                                                            
SENATOR  PASKVAN  said  he  didn't  say  that  at  all.  That  is                                                               
something that  no government can  control. But  for controllable                                                               
issues, like  wood stoves,  burning too  much oil  in inefficient                                                               
buildings, and not  changing to non-carbon energy,  that is where                                                               
we  are trying  to give  incentives for  voluntary efforts.  This                                                               
will allow municipalities  to come up with  the best alternatives                                                               
that meet the needs of people.                                                                                                  
SB 93 was held over.                                                                                                            

Document Name Date/Time Subjects
CSSB48 Sectional Analysis.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
CSSB48 Work Draft.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB48 Sponsor Statement.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB48 Fact Sheet.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB48 FBks NSB Request for Legislation.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB48 Fbks NSB Resolution 2008-34.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB48 Expected Testimony List.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB48 Fiscal Note DCCED.pdf SCRA 2/10/2009 3:30:00 PM
SB 48
SB93 FEDC Study.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 Fbks NSB Letter.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 AML Letter.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 Fiscal Note DCCED.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 Particulate Matter.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 PM2.5.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 Q&A.pdf SCRA 2/10/2009 3:30:00 PM
SB 93
SB93 Sponsor Statement.pdf SCRA 2/10/2009 3:30:00 PM
SB 93