Legislature(2005 - 2006)BELTZ 211


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
Moved CSHB 392(L&C) am Out of Committee
Moved CSHB 334(FIN) Out of Committee
+ Bills Previously Heard/Scheduled TELECONFERENCED
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         April 26, 2006                                                                                         
                           1:34 p.m.                                                                                            
MEMBERS PRESENT                                                                                                              
Senator Bert Stedman, Chair                                                                                                     
Senator Gary Stevens, Vice Chair                                                                                                
Senator Thomas Wagoner                                                                                                          
Senator Albert Kookesh                                                                                                          
MEMBERS ABSENT                                                                                                                
Senator Johnny Ellis                                                                                                            
COMMITTEE CALENDAR                                                                                                            
CS FOR HOUSE BILL NO. 392(L&C) am                                                                                               
"An Act authorizing the establishment of regional solid waste                                                                   
management authorities."                                                                                                        
     MOVED CSHB 392(L&C) am OUT OF COMMITTEE                                                                                    
CS FOR HOUSE BILL NO. 334(FIN)                                                                                                  
"An Act relating to an exemption from and deferral of municipal                                                                 
property taxes for certain types of deteriorated property."                                                                     
     MOVED CSHB 334(FIN) OUT OF COMMITTEE                                                                                       
PREVIOUS COMMITTEE ACTION                                                                                                     
BILL: HB 392                                                                                                                  
SHORT TITLE: SOLID WASTE MANAGEMENT AUTHORITIES                                                                                 
SPONSOR(s): REPRESENTATIVE(s) WILSON                                                                                            
01/25/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/25/06       (H)       CRA, L&C                                                                                               
02/09/06       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
02/09/06       (H)       Heard & Held                                                                                           
02/09/06       (H)       MINUTE(CRA)                                                                                            
02/14/06       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
02/14/06       (H)       Moved CSHB 392(CRA) Out of Committee                                                                   
02/14/06       (H)       MINUTE(CRA)                                                                                            
02/17/06       (H)       CRA RPT CS(CRA) NT 4DP 2NR                                                                             
02/17/06       (H)       DP: CISSNA, KOTT, THOMAS, OLSON;                                                                       
02/17/06       (H)       NR: SALMON, NEUMAN                                                                                     
03/06/06       (H)       L&C AT 3:15 PM CAPITOL 17                                                                              
03/06/06       (H)       Moved CSHB 392(L&C) Out of Committee                                                                   
03/06/06       (H)       MINUTE(L&C)                                                                                            
03/08/06       (H)       L&C RPT CS(L&C) 1DP 4NR 1AM                                                                            
03/08/06       (H)       DP: KOTT;                                                                                              
03/08/06       (H)       NR: CRAWFORD, LYNN, LEDOUX, GUTTENBERG;                                                                
03/08/06       (H)       AM: ROKEBERG                                                                                           
03/24/06       (H)       RETURNED TO RLS COMMITTEE                                                                              
04/12/06       (H)       TRANSMITTED TO (S)                                                                                     
04/12/06       (H)       VERSION: CSHB 392(L&C) AM                                                                              
04/13/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/13/06       (S)       CRA, L&C                                                                                               
04/19/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/19/06       (S)       -- Meeting Canceled --                                                                                 
04/21/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/21/06       (S)       -- Meeting Canceled --                                                                                 
04/24/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/24/06       (S)       -- Meeting Canceled --                                                                                 
04/26/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
BILL: HB 334                                                                                                                  
SHORT TITLE: MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION                                                                          
SPONSOR(s): REPRESENTATIVE(s) RAMRAS                                                                                            
01/09/06       (H)       PREFILE RELEASED 12/30/05                                                                              
01/09/06       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/09/06       (H)       CRA, FIN                                                                                               
01/31/06       (H)       CRA AT 8:00 AM CAPITOL 124                                                                             
01/31/06       (H)       Moved Out of Committee                                                                                 
01/31/06       (H)       MINUTE(CRA)                                                                                            
02/01/06       (H)       CRA RPT 2DP 5NR                                                                                        
02/01/06       (H)       DP: CISSNA, THOMAS;                                                                                    
02/01/06       (H)       NR: NEUMAN, KOTT, SALMON, LEDOUX, OLSON                                                                
02/09/06       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/09/06       (H)       Scheduled But Not Heard                                                                                
02/13/06       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/13/06       (H)       Scheduled But Not Heard                                                                                
02/14/06       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/14/06       (H)       Heard & Held                                                                                           
02/14/06       (H)       MINUTE(FIN)                                                                                            
02/21/06       (H)       FIN AT 3:00 PM HOUSE FINANCE 519                                                                       
02/21/06       (H)       Moved CSHB 334(FIN) Out of Committee                                                                   
02/21/06       (H)       MINUTE(FIN)                                                                                            
02/22/06       (H)       FIN RPT CS(FIN) 2DP 5NR                                                                                
02/22/06       (H)       DP: WEYHRAUCH, FOSTER;                                                                                 
02/22/06       (H)       NR: HAWKER, JOULE, KERTTULA, HOLM,                                                                     
04/05/06       (H)       TRANSMITTED TO (S)                                                                                     
04/05/06       (H)       VERSION: CSHB 334(FIN)                                                                                 
04/07/06       (S)       READ THE FIRST TIME - REFERRALS                                                                        
04/07/06       (S)       CRA, FIN                                                                                               
04/19/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/19/06       (S)       -- Meeting Canceled --                                                                                 
04/21/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/21/06       (S)       -- Meeting Canceled --                                                                                 
04/24/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
04/24/06       (S)       -- Meeting Canceled --                                                                                 
04/26/06       (S)       CRA AT 1:30 PM BELTZ 211                                                                               
WITNESS REGISTER                                                                                                              
Representative Peggy Wilson                                                                                                     
Alaska Capitol Building                                                                                                         
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Sponsor HB 392                                                                                           
Rebecca Rooney, Staff                                                                                                           
Representative Peggy Wilson                                                                                                     
Alaska Capitol Building                                                                                                         
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Introduced HB 392                                                                                        
Rollo Pool, Executive Director                                                                                                  
Southeast Conference                                                                                                            
P.O. Box 21989                                                                                                                  
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Supported HB 392                                                                                         
John Bolling, City Administrator                                                                                                
City of Craig                                                                                                                   
P.O. Box 725                                                                                                                    
Craig, AK 99921                                                                                                                 
POSITION STATEMENT:  Supported HB 392                                                                                         
Kathie Wasserman, Deputy Director                                                                                               
Alaska Municipal League (AML)                                                                                                   
217 2nd Street                                                                                                                  
Juneau, AK 99801                                                                                                                
POSITION STATEMENT:  Supported HB 392                                                                                         
Representative Jay Ramras                                                                                                       
Alaska State Capitol                                                                                                            
Juneau, AK 99801-1182                                                                                                           
POSITION STATEMENT:  Sponsor of HB 334                                                                                        
ACTION NARRATIVE                                                                                                              
CHAIR  BERT  STEDMAN called  the  Senate  Community and  Regional                                                             
Affairs  Standing  Committee  meeting  to order  at  1:34:04  PM.                                                             
Present  were Senators  Gary Stevens,  Thomas  Wagoner and  Chair                                                               
Bert Stedman. Senator Albert Kookesh arrived soon thereafter.                                                                   
       CSHB 392(L&C)am-SOLID WASTE MANAGEMENT AUTHORITIES                                                                   
CHAIR BERT  STEDMAN announced  HB 392  to be  the first  order of                                                               
1:35:00 PM                                                                                                                    
REPRESENTATIVE PEGGY WILSON introduced Rebecca Rooney.                                                                          
REBECCA ROONEY, Staff to  Representative Peggy Wilson, introduced                                                               
HB  392 with  the observation  that  the cost  of managing  solid                                                               
waste is a  most compelling reason to enact HB  392. When shipped                                                               
to  the  super  landfills  in   Washington  State,  the  cost  in                                                               
Southeast is  upward of  $220 per  ton. In  comparison, Anchorage                                                               
pays $40 per ton to manage the same type of solid waste.                                                                        
HB 392 would  provide a vehicle for communities  to come together                                                               
to form  a waste  management authority -  modeled after  the Port                                                               
Authority statutes  - to  reduce the cost  of dealing  with solid                                                               
waste. Potentially,  she said, money  that is spent in  the Lower                                                               
48 would  stay in Southeast  Alaska. HB 392 requires  that voters                                                               
from  each  municipality  approve joining  the  authority,  which                                                               
would  be legally  independent from  the  municipalities and  the                                                               
state. An  authority could  issue bonds,  borrow money  and enter                                                               
into  contracts. Each  participating  municipality  would have  a                                                               
seat  on  the  governing  board  that  would  create  bylaws  and                                                               
regulations. There are provisions  for municipalities to withdraw                                                               
from  the authority,  but previous  obligations  would remain  in                                                               
MS. ROONEY  advised that Southeast  Conference has  secured funds                                                               
for three studies.  The first was to determine the  type of legal                                                               
entity  that would  be  used  and the  decision  was  to use  the                                                               
authority  model. The  second study  developed bill  language and                                                               
the  third, which  is now  in final  review, looked  at different                                                               
technologies for  solid waste disposal. That  information will go                                                               
to the  authority for  an ultimate  decision on  which technology                                                               
would be  best for  Southeast Alaska.  She added  that parameters                                                               
would  also   be  defined  to  make   the  operation  financially                                                               
1:38:51 PM                                                                                                                    
SENATOR  GARY  STEVENS asked  for  an  example  of the  kinds  of                                                               
communities that might participate and  where a facility might be                                                               
MS. ROONEY responded  the authority would decide  on the location                                                               
and  other   specifics,  but  Southeast  communities   that  have                                                               
indicated   some   interest   include:  Thorne   Bay,   Wrangell,                                                               
Petersburg,  Sitka, and  Kake.  She advised  that  Mr. Pool  from                                                               
Southeast Conference could provide additional information.                                                                      
CHAIR  STEDMAN asked  for  an explanation  of  how the  authority                                                               
would work in the unorganized areas.                                                                                            
MS. ROONEY deferred to Rollo Pool.                                                                                              
SENATOR GARY  STEVENS asked if  this contemplates  communities in                                                               
different boroughs joining to form an authority.                                                                                
MS. ROONEY  replied the hope is  that a number of  communities or                                                               
boroughs would  go together for  economy of scale so  there would                                                               
be just one landfill for all of Southeast.                                                                                      
CHAIR STEDMAN  commented that this  issue has come up  with great                                                               
frequency in  the last 15-20  years since incinerators  have been                                                               
demobilized in  Southeast. Communities have gone  back to burying                                                               
their garbage  or using off-site  disposal. The latter,  he said,                                                               
is surprisingly expensive.                                                                                                      
ROLLO POOL,  Executive Director, Southeast  Conference, mentioned                                                               
the time  that's been  spent working  on both  the grant  and the                                                               
legislation and then  reported that about one-third  of the trash                                                               
generated in Southeast  is shipped to the Lower 48.  He said that                                                               
the cost  of building a  landfill is prohibitive, but  building a                                                               
large  one that  would accommodate  several communities  wouldn't                                                               
cost  much more  than  a  small one.  However,  no community  has                                                               
offered  to  be  the  entity  that  would  build  and  operate  a                                                               
landfill,  which   is  why  HB   392  is  so   important  because                                                               
incorporated  communities  or boroughs  could  work  as a  single                                                               
entity to manage  solid waste. Local pickup  services wouldn't be                                                               
affected. Hopefully,  he said,  the landfill  will be  located in                                                               
one of the communities that has shown an interest.                                                                              
Currently  about  23,000 tons  of  solid  waste is  shipped  from                                                               
Southeast Alaska, which  doesn't include the 30,000  tons that is                                                               
generated  by the  City and  Borough of  Juneau and  goes into  a                                                               
local  landfill. Those  figures  make it  clear  that a  regional                                                               
landfill would be economical if startup grants were available.                                                                  
MR.  POOL  said  he  is  pleased  to  report  that  a  number  of                                                               
communities  have indicated  interest  in serving  as a  regional                                                               
host site. This  is encouraging since the more  typical mantra is                                                               
"not in my  backyard." This doesn't have to become  a burden to a                                                               
community  or borough,  he said.  The idea  is that  the facility                                                               
would  be constructed  through the  authority  and then  operated                                                               
through a contract with a firm familiar with running landfills.                                                                 
1:46:54 PM                                                                                                                    
CHAIR STEDMAN asked how many  years Southeast Conference has been                                                               
working on the concept of regional waste management.                                                                            
MR. POOL  replied every city  has done several  recycling reports                                                               
since  1990 and  each  has acknowledged  that communities  should                                                               
work cooperatively, but because  community landfills have reached                                                               
capacity at different times the  cooperative effort hasn't become                                                               
a reality.                                                                                                                      
Ketchikan  was the  first community  to ship  solid waste  to the                                                               
Lower 48 in about 1995.  Sitka was next and Wrangell, Petersburg,                                                               
Craig and Klawock  followed suit. The average cost  is about $102                                                               
per  ton with  the maximum  at $220  per ton  and the  minimum at                                                               
about $75 per ton. Costs to  Ketchikan are cheapest because it is                                                               
closest to  Washington State. He  advised that this is  the first                                                               
time  that legislation  has  been introduced  to  create a  solid                                                               
waste authority.                                                                                                                
SENATOR  GARY STEVENS  asked what  the  options would  be if  the                                                               
consumer  decided they  were  paying more  than  they though  was                                                               
MR. POOL  replied Southeast  consumers have  just one  choice per                                                               
community  for pickup  and landfill.  The  landfill in  Anchorage                                                               
charges  $30-$35 per  ton  so  if landfill  costs  for Craig  and                                                               
Klawock  could  get  down  to double  the  Anchorage  charge  the                                                               
savings  to  those  communities   would  be  tremendous.  Another                                                               
consideration is  that a regional landfill  would have associated                                                               
jobs, which  would be particularly important  to communities that                                                               
have lost jobs with the downturn in the timber economy.                                                                         
SENATOR  GARY STEVENS  asked him  to be  more specific  regarding                                                               
what a  consumer could do if  the manager of the  landfill wasn't                                                               
MR. POOL replied  one individual probably couldn't do  a lot, but                                                               
a  group of  individuals  could  make a  decision  to change.  He                                                               
explained  that  authorities  would  strictly  adhere  to  public                                                               
records  and   public  meetings  requirements  and   the  various                                                               
communities  would  elect   to  join  or  to   separate  from  an                                                               
SENATOR GARY STEVENS asked who would serve on the authority.                                                                    
MR. POOL responded the positions  are voluntary and unpaid and he                                                               
envisions  that  the  authority   would  be  composed  of  public                                                               
officials who are either elected or municipal employees.                                                                        
SENATOR GARY STEVENS asked if  the authority would provide pickup                                                               
service for participating communities.                                                                                          
MR. POOL replied  solid waste is currently  shipped to Washington                                                               
State  via private  tug and  barge and  a similar  arrangement is                                                               
anticipated for  a regional landfill in  Southeast. The authority                                                               
would make decisions  about what would be included  in a regional                                                               
site in terms of recycling, waste energy, and size.                                                                             
1:55:15 PM                                                                                                                    
CHAIR  STEDMAN  explained  that communities  that  are  currently                                                               
shipping waste to  the Lower 48 have had to  enter into long-term                                                               
shipping contracts,  which is something the  authority would have                                                               
to address.                                                                                                                     
SENATOR   THOMAS  WAGONER   asked   about   the  possibility   of                                                               
establishing  a  regional  site  to  facilitate  backhauling  for                                                               
economy of scale.                                                                                                               
MR. POOL  agreed that the  more garbage  there is the  better the                                                               
economy of scale for the landfill and shipping costs.                                                                           
SENATOR  WAGONER  remarked  this   might  be  an  opportunity  to                                                               
seriously look at  the Bradfield Road and get  off other projects                                                               
that don't  do much  for the  economy in  Southeast. He  asked if                                                               
anyone had looked at that area for a landfill site.                                                                             
MR. POOL responded  the existence or lack of  infrastructure is a                                                               
consideration.  For  instance,  Wrangell has  established  docks,                                                               
roads and utilities. Another consideration  is that the Bradfield                                                               
area is  out of  the way  in terms  of established  barge routes,                                                               
which would affect shipping costs.                                                                                              
SENATOR WAGONER  said his  point is  that if  you're going  to do                                                               
this then do  it right and consider all the  options for the long                                                               
term. He  suggested looking at  the Bradfield area  because small                                                               
landfills aren't  economical and nobody  wants a big  landfill in                                                               
their backyard.                                                                                                                 
MR. POOL  agreed and  said communities have  been advised  that a                                                               
regional site would  require a minimum of 50 acres  that are well                                                               
buffered and have  room for expansion. A site would  need to last                                                               
at least 50 years to be a viable option.                                                                                        
2:01:29 PM                                                                                                                    
REPRESENTATIVE WILSON  reminded members that all  the communities                                                               
in Southeast are within the  Tongass National Forest so available                                                               
land is  very limited. Certain  communities have stepped  up, but                                                               
others don't have room.                                                                                                         
Responding  to  Senator  Steven's inquiry  about  protecting  the                                                               
consumer, she directed attention to  page 12, lines 18-22. If one                                                               
entity were providing  the service and another wanted  to come in                                                               
as  well then,  depending on  population, the  entities would  be                                                               
under the  authority of the  RCA, which would  provide protection                                                               
for consumers.                                                                                                                  
CHAIR STEDMAN  said his  impression is  that the  communities are                                                               
working  through Southeast  Conference  so  waste disposal  sites                                                               
would  be  consolidated.  Kake   has  been  mentioned  frequently                                                               
because of its central location,  but he didn't know whether they                                                               
were interested.                                                                                                                
SENATOR  ALBERT  KOOKESH stated  that  Kake  isn't surrounded  by                                                               
National Forest land so it has access  to its own land as well as                                                               
Sealaska land.                                                                                                                  
2:05:16 PM                                                                                                                    
JOHN  BOLLING,  City  Administer  for   the  City  of  Craig  and                                                               
Southeast Conference Board of Directors,  testified in support of                                                               
HB 392.  He reported that  Craig currently  pays $200 per  ton to                                                               
dispose  of solid  waste.  It has  a contract  with  the City  of                                                               
Klawock and solid  waste from both communities  is transported to                                                               
regional  landfills in  the  Lower  48. It  makes  sense to  band                                                               
together  to address  a common  issue  and this  bill provides  a                                                               
different opportunity that should be more economical.                                                                           
He  added that  Craig is  already  a member  of the  Inter-Island                                                               
Ferry  Authority, which  was organized  under the  Port Authority                                                               
Act  in  Title 29.  He  described  the  structure and  said  it's                                                               
understandable and the community  is comfortable with the format.                                                               
He  suggested  that the  municipal  solid  waste authority  would                                                               
provide  similar benefit  and he  would hope  that the  committee                                                               
would pass the bill.                                                                                                            
CHAIR  STEDMAN asked  about  the reactions  in  Craig when  solid                                                               
waste disposal went to $200 per ton.                                                                                            
MR. BOWLING replied it's been quite an adjustment since prices                                                                  
went from $40 per ton to $200 per ton in just a few years. This                                                                 
enabling legislation is the way to get that done and it                                                                         
addresses the issue of skyrocketing costs..                                                                                     
SENATOR WAGONER asked what the  average charge is for residential                                                               
garbage service.                                                                                                                
MR. BOWLING replied the cost in Craig is $20 per month for one                                                                  
can per week per household.                                                                                                     
2:10:17 PM                                                                                                                    
KATHIE  WASSERMAN,  Deputy   Director,  Alaska  Municipal  League                                                               
(AML),  reported  that  AML  has   been  working  with  Southeast                                                               
Conference on  this issue and  it believes  that this is  a smart                                                               
thing  to  do  and  in  the future  it  will  probably  become  a                                                               
necessity;  it's   regional,  it's  environmentally   smart,  and                                                               
economy  of  scale works.  She  suggested  that more  communities                                                               
would  join over  time  simply because  their  dumps will  become                                                               
Responding  to the  consumer question  from Senator  Stevens, she                                                               
advised  that some  communities  already  have private  companies                                                               
that provide collection  and disposal and so far  she hasn't been                                                               
successful in  finding a way to  argue with a private  company on                                                               
billing charges.  She noted that  the authority would  be subject                                                               
to the Open Meetings Act and would be open to audit.                                                                            
As communities become  more strapped for money and  are unable to                                                               
maintain  their  dumps,  privatization  will  be  the  option  if                                                               
authorities aren't  in the lineup.  That isn't necessarily  a bad                                                               
thing,  but communities  tend to  feel that  they can  keep rates                                                               
lower if the service isn't privatized.                                                                                          
2:13:28 PM                                                                                                                    
SENATOR GARY STEVENS asked how long this has been an issue.                                                                     
MS. WASSERMAN replied the issue  has been building for decades. A                                                               
number of  options have been  reviewed and over  time, permitting                                                               
and cleanup bonding have become issues as well.                                                                                 
CHAIR STEDMAN mentioned  that in years past  some communities had                                                               
incinerators,   but  when   they  needed   to  be   replaced  the                                                               
regulations had changed to the  point that the capital costs were                                                               
prohibitive. Due  to economy of  scale, it became  less expensive                                                               
to  off-site dispose  than  to build  new  incinerators in  these                                                               
small communities. Now  most of Southeast, with  the exception of                                                               
Juneau,  disposes  off-site. He  noted  that  dealing with  those                                                               
long-term contracts is another issue.                                                                                           
SENATOR GARY STEVENS  asked if there is a way  for a community to                                                               
withdraw once it has joined the authority.                                                                                      
REPRESENTATIVE  WILSON replied  yes, but  the community  would be                                                               
required to honor whatever commitment it made when it joined.                                                                   
SENATOR  WAGONER noted  the $6.9  billion PERS/TRS  liability and                                                               
stated that as a  member of the CRA Committee he  wanted it to be                                                               
clear that  there should  never be any  liability assumed  by the                                                               
State of Alaska for this authority.                                                                                             
REPRESENTATIVE  WILSON  responded  the  bill says  the  State  of                                                               
Alaska would not be held responsible.                                                                                           
SENATOR WAGONER motioned to report  CSHB 392(L&C) am and attached                                                               
fiscal note(s) from committee with individual recommendations.                                                                  
CHAIR  STEDMAN noted  the three  zero fiscal  notes and  said the                                                               
Finance Committee would evaluate  the potential obligation coming                                                               
back to  the State.  There being no  objection, CSHB  392(L&C) am                                                               
moved from committee.                                                                                                           
At ease from 2:18:59 PM to 2:22:24 PM.                                                                                      
    CSHB 334(FIN)-MUNICIPAL PROPERTY TAX DEFERRAL/EXEMPTION                                                                 
CHAIR BERT STEDMAN announced HB 334 to be up for consideration.                                                                 
2:22:38 PM                                                                                                                  
REPRESENTATIVE  JAY RAMRAS,  Sponsor  of HB  334, introduced  the                                                               
bill as  an effort to  deal with dilapidated buildings.  He noted                                                               
that  much  like  the  MacKay  Building  in  downtown  Anchorage,                                                               
Fairbanks has the  Polaris Building, which is boarded  up and has                                                               
become quite an  eyesore. The condition is made  more obvious due                                                               
to the  fact that it's  located just  across the street  from the                                                               
new Jay Rabinowitz Courthouse.                                                                                                  
Builder  Marc  Marlow, who  has  had  experience with  converting                                                               
dilapidated buildings, has been  working with Fairbanks community                                                               
officials   to  get   property  tax   concessions  to   encourage                                                               
renovation  of  dilapidated  buildings. However,  there  is  some                                                               
question  as  to whether  one  city  council  may bind  a  future                                                               
council.  HB  334 clarifies  that  once  a local  governing  body                                                               
enters  into an  agreement  related to  an  exemption, it  remain                                                               
valid for the duration of the  project. It still allows for local                                                               
control and  latitude for  municipalities to  strike a  deal. The                                                               
only  exception is  a beneficial  occupancy, which  is between  a                                                               
potential developer and the local municipality.                                                                                 
CHAIR STEDMAN referenced page 1,  line 12 and said he understands                                                               
that once a property is sold  all the deferred taxes would be due                                                               
to the municipality.                                                                                                            
REPRESENTATIVE RAMRAS responded changes  were made in the Finance                                                               
Committee  because of  substantial occupancy  issues that  arose.                                                               
The  concern  related  to  creating an  unfair  advantage  for  a                                                               
developer who then  became a landlord that  didn't participate in                                                               
the sale of the building.                                                                                                       
CHAIR STEDMAN  asked for  clarification that  there would  not be                                                               
multiple stacking issues.                                                                                                       
REPRESENTATIVE RAMRAS responded he believes that is correct.                                                                    
SENATOR KOOKESH asked whether the  McKay building was refurbished                                                               
under this statute or under municipal ordinance.                                                                                
REPRESENTATIVE RAMRAS  replied Mr.  Pound informed  him it  was a                                                               
combination, but  there hasn't been  clarifying language.  HB 334                                                               
would provide  a developer  certainty that  once a  tax exemption                                                               
has been  secured; it will remain  in effect through the  life of                                                               
the   project  even   if  the   local   governing  body   changes                                                               
composition. The hope  is that the clarifying  language will give                                                               
developers certainty so they're  willing to rehabilitate eyesores                                                               
and thereby provide regentrification to communities.                                                                            
SENATOR  GARY STEVENS  asked  for  assurance that  municipalities                                                               
would have  the option of adopting  this and that it  would in no                                                               
way be a mandate.                                                                                                               
REPRESENTATIVE RAMRAS said that's correct.                                                                                      
2:31:35 PM                                                                                                                    
CHAIR STEDMAN asked  him to discuss the procedure  if a developer                                                               
were to abandon a property that had been exempted.                                                                              
REPRESENTATIVE RAMRAS responded  HB 334 isn't meant  to address a                                                               
default by a developer.                                                                                                         
SENATOR  WAGONER commented  anything  that  helps communities  is                                                               
worth  consideration and  he could  see the  need, but  more than                                                               
likely just a few properties would fall under this bill.                                                                        
REPRESENTATIVE RAMRAS  responded the  head of the  Alaska Tourism                                                               
Industry Association (ATIA) sees the  bill as a potential vehicle                                                               
for various cities to use  to renovate dilapidated buildings that                                                               
might be used  in the tourism industry. ATIA is  the only private                                                               
sector entity that made contact, which  is why he went out of his                                                               
way  to contact  Mr. Marlow  to  get his  perspective and  assure                                                               
himself that this legislation wouldn't benefit just one party.                                                                  
SENATOR  GARY  STEVENS  motioned  to  report  CSHB  334(FIN)  and                                                               
attached   fiscal   note(s)   from  committee   with   individual                                                               
recommendations. There being no objection, it was so ordered.                                                                   
There being  no further  business to  come before  the committee,                                                               
Chair Stedman adjourned the meeting at 2:35:43 PM.                                                                            

Document Name Date/Time Subjects