Legislature(2013 - 2014)BUTROVICH 205
02/20/2014 03:30 PM Senate COMMUNITY & REGIONAL AFFAIRS
| Audio | Topic |
|---|---|
| Start | |
| SB157 | |
| HB223 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 157 | TELECONFERENCED | |
| + | HB 223 | TELECONFERENCED | |
| + | TELECONFERENCED |
HB 223-MUNI TAX EXEMPTION: MIL. FACILITY ZONE
3:39:33 PM
CHAIR MICCICHE announced that HB 223 is before the committee for
the first time. He said it is not his intent to pass HB 223 at
today's committee meeting. He added that HB 223 will be heard
again at the committee's next meeting.
3:39:56 PM
JANE PIERSON, Staff, Representative Thompson, Alaska State
Legislature, Juneau, Alaska; said HB 223 is an act authorizing
municipalities to exempt or partially exempt for up to ten years
property in a Military Facility Zone (MFZ) that creates or
supports industry development or educational training
opportunities. She detailed that HB 223 gives permissive
authority for a local government to seek up to ten years of full
or partial property tax exemptions for a business in a MFZ. She
said the needs of each community with a military installation
are unique. She asserted that HB 223 provides broad authority
for local property tax exemption to be specifically defined by
the individual community to provide the maximum benefit to their
installations and their regions. She explained that MFZs were
established in the 27th Legislature; their designated areas in
close proximity to a military base where industrial or economic
development will directly enhance the base's ability to fulfill
its mission. She detailed that MFZs are used in other states as
vehicles to obtain and administer funds for business development
directly related to the facility by expansion of infrastructure
that benefits both the military facility and civilian
objectives. She said HB 223 was drafted after Representative
Thompson was approached by the Fairbanks North Star Borough
(FNSB). She noted that FNSB is currently working on establishing
MFZs in the Interior. She pointed out that the military industry
in Fairbanks contributes towards 30 percent of the FNSB's gross
community product and 38 percent of FNSB's total labor dollars.
She informed the committee that Fairbank's military base is one
of FNSB's largest economic drivers. She noted that FNSB narrowly
escaped having Eielson Air Force Base closed by the Base Closure
and Realignment Commission (BRAC) in 2005 and recently Eielson
nearly lost the F-16 fighter aircraft basing.
3:42:08 PM
MS. PIERSON continued that HB 223 will expand on the financial
incentives provided by HB 316; it is one more tool for local
governments to create better partnerships with the military
installations in their communities. She said providing tax
exemption authority to communities with the MFZ will provide
added support to the Armed Services' mission to enhance economic
development opportunities, assist in making Alaska's military
installations the best value choice for expansion, and help
defend against potential negative impact from force reduction or
closure.
SENATOR GIESSEL asked if HB 223 was the same bill from the
previous session.
MS. PIERSON stated that HB 223 is an expansion on the previous
bill. She specified that HB 223 will provide the ability for
local communities to give property tax exemptions for businesses
that support the military.
CHAIR MICCICHE asked to verify that HB 223 will allow but does
not require a municipality to provide tax breaks.
MS. PIERSON answered correct.
SENATOR BISHOP asked for an example of a business that might
come into a community and take advantage of HB 223.
MS. PIERSON replied that additional businesses may come into
Fairbanks if Eielson Air Force Base was to get the F-35s. She
noted an example of a business that warehouses and possibly
builds aircraft parts.
3:44:59 PM
SENATOR BISHOP asked if HB 223 will cover the drone program that
is coming to Alaska.
MS. PIERSON answered that she would hope so.
CHAIR MICCICHE asked Deputy Commissioner Pierre to address the
committee.
3:45:34 PM
MCHUGH PIERRE, Deputy Commissioner, Military & Veterans Affairs
(DMVA), Fort Richardson, Alaska; revealed that DMVA will
administer the MFZ application. He explained that DMVA created
the MFZ regulations and will work with communities as they come
forward. He said DMVA's goal is to make sure Alaska has a very
positive environment for the military to do business. He pointed
out that Representative Thompson has addressed community desires
to offer local tax incentives with HB 223.
3:46:48 PM
CHAIR MICCICHE opened public testimony.
3:47:04 PM
LUKE HOPKINS, Mayor, Fairbanks North Star Borough, Fairbanks,
Alaska; explained that HB 223 was somewhat of a germinal idea
from FNSB. He noted the importance in the passage of HB 316
during the 27th Legislature [to establish Military Facility
Zones]. He said FNSB and DMVA have had discussions with
companies and corporations on how to attract businesses to FNSB.
He noted the importance in strengthening Alaska's military
commitment in FNSB and through the state. He called attention to
the positive economic impact when Air Force bases get F-35s and
the businesses that follow. He added Senator Bishop's question
regarding Unmanned Aerial Vehicles and the positive business
impact for FNSB. He noted that HB 223 will assist FNSB in
partnering with the University of Alaska-Fairbanks to reach out
to businesses as fast as possible. He summarized that HB 223
will allow local municipalities with the option to offer MFZ tax
deferments or exemptions.
3:50:04 PM
CHAIR MICCICHE welcomed Representative Thompson to the committee
meeting.
3:50:26 PM
JIM DODSON, Director, Fairbanks Economic Development
Corporation, Fairbanks, Alaska; announced his support for HB
223. He read the following statement:
HB 223 coupled with the previous action of the
legislature passing the MFZs, provides municipalities
with an opportunity to attract private industry to
come to their communities that are co-located with
military bases to do business with the military.
MR. DODSON emphasized that MFZ tax exemptions will be at the
discretion of a municipality. He summarized that MFZ tax
exemptions will allow the state to continue economic
diversification and give communities a chance to grow their tax
base.
3:51:23 PM
CHAIR MICCICHE announced that public testimony will be left open
for the next committee meeting with the intent to pass HB 223
out of committee at that time. [HB 223 is held in committee.]