02/17/2009 08:00 AM House COMMUNITY & REGIONAL AFFAIRS

HB 121 - MUNICIPAL AIR QUALITY PROPERTY TAX CREDIT                                                                            
                                                                                                                                
8:02:24 AM                                                                                                                    
                                                                                                                                
CO-CHAIR HERRON announced that the  first order of business would                                                               
be HOUSE BILL  NO. 121, "An Act relating to  a municipal property                                                               
tax  credit  for  an  improvement  that  aids  in  improving  air                                                               
quality."                                                                                                                       
                                                                                                                                
8:03:06 AM                                                                                                                    
                                                                                                                                
KAREN LIDSTER,  Staff, Representative John Coghill,  Alaska State                                                               
Legislature, relayed  that one of  the dynamics of living  in the                                                               
Alaska  is the  cold and  the inversions  that occur.   She  then                                                               
informed the committee that in  2006 the Environmental Protection                                                               
Agency (EPA)  increased the stringency of  the particulate matter                                                               
2.5  standard.   In 2007  the  EPA defined  the requirements  for                                                               
state's  to clean  the air  in areas  where the  fine particulate                                                               
pollution didn't  meet the national  air quality  standard; these                                                               
were  referred to  as nonattainment  areas.   Nonattainment areas                                                               
had  three  years   to  submit  a  plan  to   EPA  that  included                                                               
enforceable measures  to reduce air pollution  emissions and show                                                               
how reasonable  progress would be  made to attain  that standard.                                                               
These standards must be achieved no later than 2015.                                                                            
                                                                                                                                
MS. LIDSTER  explained that as  Fairbanks North Star  Borough and                                                               
other  communities  seek  ways  in  which  to  meet  air  quality                                                               
standards,   they  wanted   more  than   just  restrictions   and                                                               
enforcement-based  options.     This  legislation   provides  the                                                               
aforementioned  in the  form  of  an optional  tax  credit.   The                                                               
legislation   provides  an   incentive   to   citizens  to   make                                                               
improvements  to  their  home  and   business  that  improve  the                                                               
community's air  quality.  The  language in HB 121  requires that                                                               
eligibility  conditions  and  other criteria  be  established  by                                                               
local ordinance  to address local  community needs.   Ms. Lidster                                                               
pointed out that  nonattainment areas are a public as  well as an                                                               
economic issue.   In fact,  Federal Highway  Administration funds                                                               
could  be lost  or new  projects denied.   This  legislation will                                                               
help  communities  provide  incentives  that  promote  a  healthy                                                               
economy for  residents.   In closing,  Ms. Lidster  requested the                                                               
committee's support for HB 121.                                                                                                 
                                                                                                                                
8:05:49 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE HARRIS  offered his  understanding that HB  121 is                                                               
permissive not mandatory and merely  encourages people to install                                                               
systems that promote healthier air.                                                                                             
                                                                                                                                
MS. LIDSTER concurred on both counts.                                                                                           
                                                                                                                                
8:07:05 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  GARDNER   asked  whether   there  has   been  any                                                               
indication that the Fairbanks North  Star Borough would implement                                                               
this if HB 121  passes.  She also asked what  would happen if the                                                               
borough  implemented the  program  and it  was wildly  successful                                                               
with  many  participants,  and   the  property  tax  receipts  in                                                               
Fairbanks decreased.                                                                                                            
                                                                                                                                
MS. LIDSTER  related her understanding  that the  Fairbanks North                                                               
Star Borough  is very  interested in  the passage  of HB  121 and                                                               
having the  option to use  incentives to encourage  its residents                                                               
to help  with air quality.   Ms.  Lidster surmised that  were the                                                               
program to  be wildly  successful, the  borough would  review the                                                               
impact of  a reduction in  the tax at  the local level  since the                                                               
incentive would be a local ordinance.                                                                                           
                                                                                                                                
8:08:52 AM                                                                                                                    
                                                                                                                                
REPRESENTATIVE  HARRIS surmised,  then, that  the portion  of the                                                               
property tax  that is  allowed to  be credited  would be  for the                                                               
expense of  installing a  new system,  which wouldn't  occur each                                                               
year.   He  further surmised  that  an individual  would have  to                                                               
provide proof of  improvements to air quality  that would qualify                                                               
for the proposed credit.                                                                                                        
                                                                                                                                
MS. LIDSTER stated her agreement.                                                                                               
                                                                                                                                
8:09:34 AM                                                                                                                    
                                                                                                                                
CO-CHAIR  MUNOZ moved  to report  HB  121 out  of committee  with                                                               
individual  recommendations  and  the  accompanying  zero  fiscal                                                               
note.   There being no  objection, HB  121 was reported  from the                                                               
House Community and Regional Affairs Standing Committee.