04/26/1994 01:00 PM House CRA

  SB 240 - MUNICIPAL TAX CREDIT/STUDENT HOUSING                                
                                                                               
  CHAIRMAN OLBERG brought forth CSSB 240.                                      
                                                                               
  Number 160                                                                   
                                                                               
  WENDY REDMAN, VICE PRESIDENT, UNIVERSITY RELATIONS,                          
  UNIVERSITY OF ALASKA, said, "SB 240 is legislation which                     
  amends the current tax statutes which would provide                          
  municipalities the option of passing local ordinance to                      
  provide a property tax exemption for the development of                      
  student housing projects at the University of Alaska.  It's                  
  sort of a new trend around the country.  There are now 13                    
  states that are moving into this area of turning over their                  
  student housing to private entities.  I think that they can                  
  build and operate it more efficiently, in most cases, than                   
  the universities themselves can.  We don't currently have an                 
  option that we're ready to jump on but we have several                       
  parties that have been interested in pursuing the option in                  
  Anchorage and Fairbanks.  Particularly in Fairbanks right                    
  now.  So we would like to get this legislation passed.  It                   
  certainly enhances our ability to go forward with this kind                  
  of a proposal.  It makes it much more attractive if we're                    
  able to work with the municipality to see if they would be                   
  willing to give the tax exemption while there is a private                   
  leasehold, private interest in the university property."                     
                                                                               
  Number 186                                                                   
                                                                               
  REPRESENTATIVE DAVIES said, "I've been in communication with                 
  the Mayor of Fairbanks and he's a little bit concerned about                 
  some of the issues here.  I don't think anybody objects to                   
  the intent here of trying to provide the option for                          
  municipalities to provide some tax exempt status for                         
  buildings that are designed exclusively for university                       
  housing, but there are some dueling lawyers in the wings                     
  here about exactly how this should be worded."  He then                      
  asked if this bill could be held over until the following                    
  day, for the next Community and Regional Affairs Committee,                  
  when some new "consensus language" might be presented.                       
                                                                               
  CHAIRMAN OLBERG asked, "Who's involved in the consensus?"                    
                                                                               
  REPRESENTATIVE DAVIES said, "The Fairbanks North Star                        
  Borough and the University of Alaska."                                       
                                                                               
  CHAIRMAN OLBERG asked, "Is that an accurate depiction of the                 
  University's wishes at this point?"                                          
                                                                               
  MS. REDMAN replied, "We have language which we think                         
  resolves the issue for the municipality, or for the borough.                 
  We have not been able to get a hold of their attorney with                   
  our attorney to reach some closure on it.  Their concern is                  
  a legitimate concern.  Part of the problem is that they're                   
  concerned that somebody doesn't have a duplex in town and                    
  just because the duplex happens to be housing at that                        
  particular time exclusively university students, that                        
  suddenly that person says we get to be tax exempt.  And we                   
  clearly don't intend that to happen either.  So we're trying                 
  to get some language in here which indicates that it has to                  
  be on a contractual basis with the University of Alaska."                    
                                                                               
  Number 222                                                                   
                                                                               
  CHAIRMAN OLBERG asked, "Is this something that we think that                 
  we can resolve in 24 hours to everybody's mutual agreement?"                 
                                                                               
  REPRESENTATIVE TOOHEY asked how many committees SB 240 was                   
  referred to in the Senate and if this concern was brought                    
  forth previously.                                                            
                                                                               
  MS. REDMAN said, "It was in the Finance Committee and then                   
  it had a substantive hearing in the Rules Committee because                  
  of a change that was added in the Rules Committee, which                     
  limited the municipalities to 30 year segments for the tax                   
  exemption and allows them to do a second 30 years if they                    
  wish...  It did not come up and, in fact the way the bill is                 
  currently written, we feel, our attorneys feel it would in                   
  fact prevent exactly what the borough is concerned about.                    
  However, to allay any fears with the borough, we're willing                  
  to put in an amendment which will address their concern more                 
  specifically."                                                               
                                                                               
  Number 245                                                                   
                                                                               
  CHAIRMAN OLBERG said, "It will be preferable to do it here                   
  than on the floor," and indicated that he would hold the                     
  bill in committee until the following day's committee                        
  meeting.  He then adjourned the meeting at 1:17 p.m.