Legislature(2011 - 2012)FAHRENKAMP 203

04/13/2012 08:00 AM COMMUNITY & REGIONAL AFFAIRS


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* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ Bills Previously Heard/Scheduled TELECONFERENCED
= HB 314 ALASKA RAILROAD LAND LEASES
Moved HB 314 Out of Committee
= HB 264 MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS
Moved SCS CSHB 264(CRA) Out of Committee
= HB 9 IN-STATE GASLINE DEVELOPMENT CORP
Heard & Held
                    ALASKA STATE LEGISLATURE                                                                                  
    SENATE COMMUNITY AND REGIONAL AFFAIRS STANDING COMMITTEE                                                                  
                         April 13, 2012                                                                                         
                           8:54 a.m.                                                                                            
                                                                                                                                
MEMBERS PRESENT                                                                                                               
                                                                                                                                
Senator Donald Olson, Chair                                                                                                     
Senator Thomas Wagoner                                                                                                          
Senator Albert Kookesh                                                                                                          
Senator Linda Menard                                                                                                            
Senator Johnny Ellis                                                                                                            
                                                                                                                                
MEMBERS ABSENT                                                                                                                
                                                                                                                                
All members present                                                                                                             
                                                                                                                                
OTHER LEGISLATORS PRESENT                                                                                                     
                                                                                                                                
Representative Mike Chenault                                                                                                    
Representative Mike Hawker                                                                                                      
Senator Cathy Giessel                                                                                                           
                                                                                                                                
COMMITTEE CALENDAR                                                                                                            
                                                                                                                                
HOUSE BILL NO. 314                                                                                                              
"An Act extending  the time period for which  the Alaska Railroad                                                               
Corporation  may  lease  land  without  reserving  the  right  to                                                               
terminate the lease; and providing for an effective date."                                                                      
                                                                                                                                
     - MOVED HB 314 OUT OF COMMITTEE                                                                                            
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 9(FIN) AM                                                                               
"An Act  relating to the Alaska  Gasline Development Corporation,                                                               
a  subsidiary created  project developed  by  the Alaska  Gasline                                                               
Development Corporation;  relating to  the by the  Alaska Housing                                                               
Finance Corporation;  establishing and  relating to  the in-state                                                               
regulation by the Regulatory Commission  of Alaska of an in-state                                                               
natural gas  pipeline natural gas  pipeline fund;  making certain                                                               
information  provided  to or  by  the  Alaska that  is  expressly                                                               
authorized  to  provide  transportation as  a  contract  carrier;                                                               
relating   to  Gasline   Development   Corporation  exempt   from                                                               
inspection as  a public record;  relating the Alaska  Natural Gas                                                               
Development Authority; relating to  the procurement of certain to                                                               
the  Joint In-State  Gasline Development  Team;  relating to  the                                                               
judicial  review  of  a  services   by  the  Alaska  Natural  Gas                                                               
Development  Authority;  exempting  property  of  a  right-of-way                                                               
lease  or an  action or  decision related  to the  development or                                                               
construction  of   project  developed   by  the   Alaska  Gasline                                                               
Development  Corporation  from  property  taxes  an  oil  or  gas                                                               
pipeline on state  land; relating to the lease  of a right-of-way                                                               
by the  Alaska before the commencement  of commercial operations;                                                               
and providing  for an  effective Gasline  Development Corporation                                                               
or a successor in interest for a gas pipeline date."                                                                            
                                                                                                                                
     - HEARD AND HELD                                                                                                           
                                                                                                                                
COMMITTEE SUBSTITUTE FOR HOUSE BILL NO. 264(CRA)                                                                                
"An Act  allowing a deferral  of municipal property taxes  on the                                                               
increase  in   the  value  of   real  property   attributable  to                                                               
subdivision  of that  property;  and providing  for an  effective                                                               
date."                                                                                                                          
                                                                                                                                
     - MOVED SCS CSHB 264(CRA) OUT OF COMMITTEE                                                                                 
                                                                                                                                
PREVIOUS COMMITTEE ACTION                                                                                                     
                                                                                                                                
BILL: HB 314                                                                                                                  
SHORT TITLE: ALASKA RAILROAD LAND LEASES                                                                                        
SPONSOR(s): LABOR & COMMERCE                                                                                                    
                                                                                                                                
02/06/12       (H)       READ THE FIRST TIME - REFERRALS                                                                        
02/06/12       (H)       L&C                                                                                                    
02/17/12       (H)       L&C AT 3:15 PM BARNES 124                                                                              
02/17/12       (H)       Moved Out of Committee                                                                                 
02/17/12       (H)       MINUTE(L&C)                                                                                            
02/20/12       (H)       L&C RPT 5DP                                                                                            
02/20/12       (H)       DP: CHENAULT, THOMPSON, HOLMES, MILLER,                                                                
                         OLSON                                                                                                  
03/14/12       (H)       TRANSMITTED TO (S)                                                                                     
03/14/12       (H)       VERSION: HB 314                                                                                        
03/16/12       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/16/12       (S)       CRA                                                                                                    
04/05/12       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/05/12       (S)       Heard & Held                                                                                           
04/05/12       (S)       MINUTE(CRA)                                                                                            
04/13/12       (S)       CRA AT 8:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
BILL: HB   9                                                                                                                  
SHORT TITLE: IN-STATE GASLINE DEVELOPMENT CORP                                                                                  
SPONSOR(s): CHENAULT                                                                                                            
                                                                                                                                
01/18/11       (H)       PREFILE RELEASED 1/7/11                                                                                
01/18/11       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/18/11       (H)       RES, FIN                                                                                               
02/06/12       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/06/12       (H)       Heard & Held                                                                                           
02/06/12       (H)       MINUTE(RES)                                                                                            
02/08/12       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/08/12       (H)       Heard & Held                                                                                           
02/08/12       (H)       MINUTE(RES)                                                                                            
02/10/12       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/10/12       (H)       Heard & Held                                                                                           
02/10/12       (H)       MINUTE(RES)                                                                                            
02/13/12       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/13/12       (H)       <Bill Hearing Canceled>                                                                                
02/24/12       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/24/12       (H)       Heard & Held                                                                                           
02/24/12       (H)       MINUTE(RES)                                                                                            
02/27/12       (H)       RES AT 1:00 PM BARNES 124                                                                              
02/27/12       (H)       Moved CSHB   9(RES) Out of Committee                                                                   
02/27/12       (H)       MINUTE(RES)                                                                                            
02/29/12       (H)       RES RPT CS(RES) NT 4DP 2DNP 1NR 2AM                                                                    
02/29/12       (H)       DP: MUNOZ, FOSTER, HERRON, SEATON                                                                      
02/29/12       (H)       DNP: KAWASAKI, GARDNER                                                                                 
02/29/12       (H)       NR: FEIGE                                                                                              
02/29/12       (H)       AM: DICK, P.WILSON                                                                                     
02/29/12       (H)       LETTER OF INTENT WITH RES REPORT                                                                       
03/13/12       (H)       FIN AT 8:30 AM HOUSE FINANCE 519                                                                       
03/13/12       (H)       Heard & Held                                                                                           
03/13/12       (H)       MINUTE(FIN)                                                                                            
03/16/12       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/16/12       (H)       Heard & Held                                                                                           
03/16/12       (H)       MINUTE(FIN)                                                                                            
03/20/12       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/20/12       (H)       Heard & Held                                                                                           
03/20/12       (H)       MINUTE(FIN)                                                                                            
03/21/12       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/21/12       (H)       <Bill Held Over to 6:30 pm Today>                                                                      
03/21/12       (H)       FIN AT 6:30 PM HOUSE FINANCE 519                                                                       
03/21/12       (H)       Heard & Held                                                                                           
03/21/12       (H)       MINUTE(FIN)                                                                                            
03/22/12       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
03/22/12       (H)       <Bill Held Over to 5:00 pm Today>                                                                      
03/22/12       (H)       FIN AT 5:00 PM HOUSE FINANCE 519                                                                       
03/22/12       (H)       Heard & Held                                                                                           
03/22/12       (H)       MINUTE(FIN)                                                                                            
03/23/12       (H)       FIN RPT CS(FIN) NT 6DP 1DNP 3NR 1AM                                                                    
03/23/12       (H)       DP:   FAIRCLOUGH,    T.WILSON,   NEUMAN,                                                               
                         COSTELLO, EDGMON, THOMAS                                                                               
03/23/12       (H)       DNP: GARA                                                                                              
03/23/12       (H)       NR: DOOGAN, JOULE, STOLTZE                                                                             
03/23/12       (H)       AM: GUTTENBERG                                                                                         
03/23/12       (H)       RESOURCES LETTER OF INTENT WITH FIN                                                                    
                         REPORT                                                                                                 
03/23/12       (H)       FIN AT 9:00 AM HOUSE FINANCE 519                                                                       
03/23/12       (H)       Moved CSHB   9(FIN) Out of Committee                                                                   
03/23/12       (H)       MINUTE(FIN)                                                                                            
03/27/12       (H)       TRANSMITTED TO (S)                                                                                     
03/27/12       (H)       VERSION: CSHB 9(FIN) AM                                                                                
03/28/12       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/28/12       (S)       CRA, RES, FIN                                                                                          
04/03/12       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/03/12       (S)       <Above Item Removed from Agenda>                                                                       
04/03/12       (S)       MINUTE(CRA)                                                                                            
04/05/12       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/05/12       (S)       Heard & Held                                                                                           
04/05/12       (S)       MINUTE(CRA)                                                                                            
04/13/12       (S)       CRA AT 8:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
BILL: HB 264                                                                                                                  
SHORT TITLE: MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS                                                                           
SPONSOR(s): MUNOZ                                                                                                               
                                                                                                                                
01/17/12       (H)       PREFILE RELEASED 1/13/12                                                                               
01/17/12       (H)       READ THE FIRST TIME - REFERRALS                                                                        
01/17/12       (H)       CRA, FIN                                                                                               
02/14/12       (H)       CRA AT 8:00 AM BARNES 124                                                                              
02/14/12       (H)       Heard & Held                                                                                           
02/14/12       (H)       MINUTE(CRA)                                                                                            
02/16/12       (H)       CRA AT 8:00 AM BARNES 124                                                                              
02/16/12       (H)       Moved CSHB 264(CRA) Out of Committee                                                                   
02/16/12       (H)       MINUTE(CRA)                                                                                            
02/17/12       (H)       CRA RPT CS(CRA) 5DP                                                                                    
02/17/12       (H)       DP: AUSTERMAN, CISSNA, GARDNER, FOSTER,                                                                
                         MUNOZ                                                                                                  
02/22/12       (H)       FIN AT 1:30 PM HOUSE FINANCE 519                                                                       
02/22/12       (H)       Moved CSHB 264(CRA) Out of Committee                                                                   
02/22/12       (H)       MINUTE(FIN)                                                                                            
02/24/12       (H)       FIN RPT CS(CRA) 5DP 3NR                                                                                
02/24/12       (H)       DP: NEUMAN, GARA, EDGMON, STOLTZE,                                                                     
                         THOMAS                                                                                                 
02/24/12       (H)       NR: FAIRCLOUGH, T.WILSON, DOOGAN                                                                       
03/26/12       (H)       TRANSMITTED TO (S)                                                                                     
03/26/12       (H)       VERSION: CSHB 264(CRA)                                                                                 
03/28/12       (S)       READ THE FIRST TIME - REFERRALS                                                                        
03/28/12       (S)       CRA                                                                                                    
04/03/12       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/03/12       (S)       Heard & Held                                                                                           
04/03/12       (S)       MINUTE(CRA)                                                                                            
04/05/12       (S)       CRA AT 3:30 PM BELTZ 105 (TSBldg)                                                                      
04/05/12       (S)       <Above Bill Removed from Agenda>                                                                       
04/05/12       (S)       MINUTE(CRA)                                                                                            
04/13/12       (S)       CRA AT 8:00 AM FAHRENKAMP 203                                                                          
                                                                                                                                
WITNESS REGISTER                                                                                                              
                                                                                                                                
ANNA LATHAM, Staff                                                                                                              
Representative Kurt Olson                                                                                                       
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced HB 314.                                                                                        
                                                                                                                                
DAVID SCOTT, Staff                                                                                                              
Senator Donny Olson                                                                                                             
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Introduced SCS CSHB 9 and SCS CSHB 264.                                                                   
                                                                                                                                
REPRESENTATIVE MIKE CHENAULT                                                                                                    
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Opposed the Senate committee substitute for                                                               
HB 9.                                                                                                                           
                                                                                                                                
REPRESENTATIVE MIKE HAWKER                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION STATEMENT: Opposed the Senate committee substitute for                                                               
HB 9.                                                                                                                           
                                                                                                                                
RANDY HOFFBECK, Chief of Staff for Mayor Brower                                                                                 
North Slope Borough                                                                                                             
Barrow, Alaska                                                                                                                  
POSITION STATEMENT: Supported the committee substitute for HB                                                                 
264.                                                                                                                            
                                                                                                                                
JOHANNA BALES, Deputy Director                                                                                                  
Tax Division                                                                                                                    
Department of Revenue                                                                                                           
Anchorage, Alaska                                                                                                               
POSITION STATEMENT: Opposed the committee substitute for HB 264.                                                              
                                                                                                                                
CHRISTOPHER CLARK, Staff                                                                                                        
Representative Cathy Munoz                                                                                                      
Alaska State Legislature                                                                                                        
Juneau, Alaska                                                                                                                  
POSITION  STATEMENT: Supported  HB  264 and  said  more time  was                                                             
needed to vet the committee substitute.                                                                                         
                                                                                                                                
                                                                                                                                
ACTION NARRATIVE                                                                                                              
                                                                                                                                
8:54:57 AM                                                                                                                    
CHAIR  DONALD  OLSON called  the  Senate  Community and  Regional                                                             
Affairs Standing Committee meeting to  order at 8:54 a.m. Present                                                               
at  the call  to  order  were Senators  Menard,  Ellis and  Chair                                                               
Olson.                                                                                                                          
                                                                                                                                
                                                                                                                                
               HB 314-ALASKA RAILROAD LAND LEASES                                                                           
                                                                                                                                
8:55:15 AM                                                                                                                    
CHAIR OLSON announced the consideration of HB 314.                                                                              
                                                                                                                                
8:55:27 AM                                                                                                                    
ANNA  LATHAM, Staff  to Representative  Kurt Olson,  Alaska State                                                               
Legislature,   said  HB   314   extended   the  Alaska   Railroad                                                               
Corporation  (ARC)  property lease  terms  from  55 years  to  95                                                               
years. She  said the  ARC would benefit  from longer  leases that                                                               
encourage  high value  building  construction  that retain  their                                                               
value  for  a longer  period  of  time.  She  said the  bill  has                                                               
received support  from municipalities, businesses  and developers                                                               
throughout the Railbelt region.                                                                                                 
                                                                                                                                
8:55:56 AM                                                                                                                    
CHAIR OLSON  asked if the  95 year  leases would be  voluntary or                                                               
mandatory.                                                                                                                      
                                                                                                                                
8:56:17 AM                                                                                                                    
MS.  LATHAM  answered  that  the  lease  terms  were  up  to  the                                                               
discretion of the ARC Board of Directors.                                                                                       
                                                                                                                                
8:56:29 AM                                                                                                                    
SENATOR  ELLIS  moved  to  report HB  314,  27-LS1281\A,  out  of                                                               
committee  with individual  recommendations  and attached  fiscal                                                               
note(s).                                                                                                                        
                                                                                                                                
8:56:39 AM                                                                                                                    
CHAIR OLSON  said there  being no objections,  HB 314  moved from                                                               
the Senate Community and Regional Affairs Standing Committee.                                                                   
                                                                                                                                
            HB   9-IN-STATE GASLINE DEVELOPMENT CORP                                                                        
                                                                                                                                
8:57:41 AM                                                                                                                    
CHAIR OLSON announced the consideration of HB 9.                                                                                
                                                                                                                                
8:57:50 AM                                                                                                                    
DAVID SCOTT,  Staff for Senator Olson,  Alaska State Legislature,                                                               
noted that  the new Senate  committee substitute (CS) for  CSHB 9                                                               
was version J.                                                                                                                  
                                                                                                                                
8:58:09 AM                                                                                                                    
SENATOR  ELLIS  moved  Senate  CS for  CSHB  9,  27-LS0075\J,  be                                                               
considered the item before the committee.                                                                                       
                                                                                                                                
8:58:17 AM                                                                                                                    
CHAIR  OLSON  announced that  without  objection,  version J  was                                                               
adopted as a working document.                                                                                                  
                                                                                                                                
8:58:30 AM                                                                                                                    
MR. SCOTT  reviewed the Senate  CS sectional and said  the intent                                                               
was to  pare the bill  down to the  bare minimum that  the Alaska                                                               
Gasline Development  Corporation (AGDC)  required to get  to open                                                               
season   and  allow   funds  to   be  spent   from  last   year's                                                               
appropriation.                                                                                                                  
                                                                                                                                
     SECTION 1                                                                                                                  
               - Adds a new section to AS 18.56, Alaska                                                                       
                 Housing Finance Corporation (AHFC),                                                                            
                 relating to AGDC's duties and                                                                                  
                 abilities.                                                                                                     
                                                                                                                                
                     Empowered to construct, own, operate                                                                    
                      and manage pipelines throughout the                                                                       
                      state, while removing the specific                                                                        
                      reference to the project in the July                                                                      
                      2011 report from AGDC.                                                                                    
                                                                                                                                
             Added legislation authorization prior                                                                           
                      to construction.                                                                                          
                                                                                                                                
                     Authorization to acquire land and                                                                       
                      other interest in property.                                                                               
                                                                                                                                
                     Creates the in-state gas pipeline                                                                       
                      fund, which enables AGDC to use the                                                                       
                      $200 million appropriated by the                                                                          
                      legislature in 2011.                                                                                      
                                                                                                                                
                     Shipping commitments resulting from                                                                     
                      an open season shall be reported to                                                                       
             both presiding officers and published                                                                              
                      online within 10 days.                                                                                    
                                                                                                                                
             Removed authorization to operate as a                                                                           
                      contract carrier.                                                                                         
                                                                                                                                
                     Removed authorization to issue bonds                                                                    
                      and incur debt.                                                                                           
                                                                                                                                
     SECTION 2                                                                                                                  
               - Adds a new section to 36.30 to exempt                                                                        
                 Alaska Natural Gas Development Authority                                                                       
                 (ANGDA) from the state procurement code                                                                        
                 when contracting for professional                                                                              
                 services.                                                                                                      
                                                                                                                                
     SECTION 3                                                                                                                  
          - Amends 38.34.050(a) to provide ADGC access                                                                        
                 to information of state agencies that is                                                                       
                 directly related to designing,                                                                                 
                 constructing and operation an in-state                                                                         
                 gasline and to protect existing                                                                                
                 confidentiality of information held by                                                                         
                 state agencies.                                                                                                
                                                                                                                                
     SECTION 4                                                                                                                  
               - Amends 38.34.050(b), which in current                                                                        
                 statute directs state agencies to                                                                              
                 cooperate with and give priority to                                                                            
                 information requests from the Joint In-                                                                        
                 State Gasline Development Team. The                                                                            
                 section replaces the reference to (JIGDT)                                                                      
                 with a direct reference to AGDC, to                                                                            
                 reflect the reorganization of the agency.                                                                      
                                                                                                                                
     SECTION 5                                                                                                                  
               - Adds a new section to 38.34.050 to allow                                                                     
                 AGDC to disclose information unless the                                                                        
                 info discloses particular business or                                                                          
                 private information.                                                                                           
                                                                                                                                
               - Specifies that an agreement to sell or                                                                       
                 manage a pipeline is public information.                                                                       
                                                                                                                                
     SECTION 6                                                                                                                  
               - Definitions.                                                                                                 
                                                                                                                                
     SECTION 7                                                                                                                  
               - Amends 40.25.120(a) to exempt information                                                                    
                 covered by an AGDC confidentiality                                                                             
                 agreement from the state public records                                                                        
                 act.                                                                                                           
                                                                                                                                
     SECTION 8                                                                                                                  
          - Amends 41.41.010(a) to enable ANGDA to act                                                                        
                 as a gas marketer instead of a                                                                                 
                 transporter. Removes authorization for                                                                         
                 ANGDA to design, construct, or operate                                                                         
                 pipelines.                                                                                                     
                                                                                                                                
     SECTION 9                                                                                                                  
               - Amends 41.41.010(d) to clarify ANGDA as a                                                                    
           gas marketer both in-state and for export.                                                                           
                                                                                                                                
     SECTION 10                                                                                                                 
               - Repeals and reenacts 41.41.020 to state                                                                      
                 that AHFC's board is now the board of                                                                          
                 ANGDA.                                                                                                         
                                                                                                                                
     SECTION 11                                                                                                                 
          - Amends 41.41.060 to conform to section 10,                                                                        
                 relates to per diem and travel expenses.                                                                       
                                                                                                                                
     SECTION 12                                                                                                                 
               - Amends 41.41.070(d) to allow ANGDA to                                                                        
                 contract for legal counsel and exempts                                                                         
                 this from the state procurement code.                                                                          
                                                                                                                                
     SECTION 13                                                                                                                 
               - Amends 41.41.090(b) to remove involvement                                                                    
                 with a 'project' from the circumstances                                                                        
                 requiring disclosure. Conforms with                                                                            
                 section 8.                                                                                                     
                                                                                                                                
     SECTION 14                                                                                                                 
               - Amends 41.41.150(a) to expand ANGDA's                                                                        
           existing confidential records authority to                                                                           
                 include info in a confidential agreement                                                                       
                 between AGDC and ANGDA.                                                                                        
                                                                                                                                
     SECTION 15                                                                                                                 
               - Amends 41.41.200 to remove ANGDA's                                                                           
                 authority to exercise eminent domain.                                                                          
                 Conforms with section 8.                                                                                       
                                                                                                                                
     SECTION 16                                                                                                                 
          - Amends 41.41.990(2) to confirm that AHFC's                                                                        
           board is the board of ANGDA. Conforms with                                                                           
                 section 10.                                                                                                    
                                                                                                                                
     SECTION 17                                                                                                                 
               - Repeals to conform with restructuring the                                                                    
           AGDC governance by removing the JIGDT, and                                                                           
                 removing statutes related to ANGDA board                                                                       
                 elections.                                                                                                     
                                                                                                                                
     SECTION 18                                                                                                                 
               - Repeals section 1 of the 2002 Ballot                                                                         
           Measure 3, which are the findings that are                                                                           
                 no longer necessary with ANGDA's new and                                                                       
                 limited authority.                                                                                             
                                                                                                                                
     SECTION 19                                                                                                                 
               - Immediate effective date.                                                                                    
                                                                                                                                
8:59:46 AM                                                                                                                    
SENATOR KOOKESH arrived.                                                                                                        
                                                                                                                                
9:02:50 AM                                                                                                                    
At ease 9:02:50 a.m. to 9:02:58 a.m.                                                                                            
                                                                                                                                
9:02:58 AM                                                                                                                    
REPRESENTATIVE  MIKE CHENAULT,  Alaska  State Legislature,  prime                                                               
sponsor of HB 9, said the  CS guts AGDC's ability to move forward                                                               
on an  in-state gas pipeline project.  He said the CS  takes away                                                               
AGDC's ability  to move forward  with a pipeline and  replaces it                                                               
by requiring legislative sanctioning. He  said the vision of HB 9                                                               
was to take  politics out of a gasline moving  forward and the CS                                                               
puts politics  right back in the  middle of the project.  He said                                                               
the  definition  of  insanity  was   doing  the  same  thing  and                                                               
expecting a different result. He  said AGDC's ability to work for                                                               
the  citizens of  Alaska  via moving  the  state's only  pipeline                                                               
project forward was neutered by the CS.                                                                                         
                                                                                                                                
REPRESENTATIVE CHENAULT  said a poll had  indicated that Alaskans                                                               
thought  a  lack  of  leadership, vision  and  courage  were  the                                                               
reasons why  the state did  not have a  pipeline. He said  the CS                                                               
takes away AGDC's ability to  get a meaningful open-season in the                                                               
quickest amount of time.                                                                                                        
                                                                                                                                
CHAIR OLSON asked  about the issue to require  sanctioning of the                                                               
legislature  for  project  oversight to  avoid  significant  cost                                                               
overruns.                                                                                                                       
                                                                                                                                
9:06:41 AM                                                                                                                    
REPRESENTATIVE MIKE HAWKER, Alaska  State Legislature, sponsor of                                                               
HB  9,  responded that  the  inherent  in  the structure  of  the                                                               
original bill was to establish AGDC  as a mechanism for Alaska to                                                               
have   a  strong   position  with   all   commercial  and   state                                                               
participatory gasline proposals. He  said the Alaska Constitution                                                               
only allowed  the legislature to  appropriate funds and it  was a                                                               
given  for  a project  that  required  state investment  to  come                                                               
before  the legislature.  He said  a strong  inherent sanctioning                                                               
concept was  built into the  original document and  requiring the                                                               
private  sector   to  come  back   before  the   legislature  for                                                               
sanctioning was inappropriate.                                                                                                  
                                                                                                                                
9:07:55 AM                                                                                                                    
SENATOR WAGONER arrived.                                                                                                        
                                                                                                                                
9:08:09 AM                                                                                                                    
CHAIR OLSON asked for comments on the CS.                                                                                       
                                                                                                                                
REPRESENTATIVE HAWKER responded that  the introduction for the CS                                                               
stated  that the  intent was  to reduce  the bill  and leave  the                                                               
minimum needed  to get an open-season.  He said the CS  had taken                                                               
out critical elements that provided  the state with a strong seat                                                               
and was well below the minimums  needed to get to an open-season.                                                               
He  said any  attempt for  an open-season  would be  considered a                                                               
farce.                                                                                                                          
                                                                                                                                
He said  the original AGDC concept  was that it merged  the voter                                                               
mandated  ANGDA with  AGDC. He  said AGDC  would be  empowered to                                                               
work  the pipeline  project  to allow  ANGDA to  get  the gas  to                                                               
market.  He said  the CS  thwarts the  will of  Alaska voters  by                                                               
taking away any possibility of a project coming to fruition.                                                                    
                                                                                                                                
CHAIR  OLSON asked  to  verify that  the Senate  CS  was done  in                                                               
cooperation   with   Representative  Hawker   or   Representative                                                               
Chenault.                                                                                                                       
                                                                                                                                
REPRESENTATIVE HAWKER answered that was incorrect.                                                                              
                                                                                                                                
REPRESENTATIVE  CHENAULT answered  that  was  incorrect. He  said                                                               
information was supplied to the  Chairman's office and he did not                                                               
sit down with anyone to craft the Senate CS.                                                                                    
                                                                                                                                
CHAIR OLSON said HB 9 would be held.                                                                                            
                                                                                                                                
9:11:04 AM                                                                                                                    
At ease 9:11 a.m. to 9:12 a.m.                                                                                                  
                                                                                                                                
9:12:37 AM                                                                                                                    
CHAIR OLSON recessed the meeting to the call of the Chair.                                                                      
                                                                                                                                
        HB 264-MUNI PROPERTY TAX DEFERRAL: SUBDIVISIONS                                                                     
                                                                                                                                
12:36:57 PM                                                                                                                   
CHAIR OLSON reconvened the Senate  Community and Regional Affairs                                                               
Committee meeting and announced the consideration of HB 264.                                                                    
                                                                                                                                
                                                                                                                                
12:37:29 PM                                                                                                                   
SENATOR  KOOKESH moved  to  adopt  Senate CS  for  CSHB 264,  27-                                                               
LS1090\E.                                                                                                                       
                                                                                                                                
12:37:58 PM                                                                                                                   
CHAIR  OLSON said  without objection,  version E  was before  the                                                               
committee.                                                                                                                      
                                                                                                                                
12:38:05 PM                                                                                                                   
DAVID SCOTT,  Staff for Senator Olson,  Alaska State Legislature,                                                               
said  the committee  substitute (CS)  added two  sections to  the                                                               
bill,  Section 2  and  Section  3. He  said  the  CS removed  the                                                               
statutory municipal operating tax cap.                                                                                          
                                                                                                                                
12:38:23 PM                                                                                                                   
RANDY  HOFFBECK, Chief  of Staff  for Mayor  Brower, North  Slope                                                               
Borough,  said the  CS removed  the statutory  operating property                                                               
tax cap  by amending AS 29.45  and AS 43.56. He  said the current                                                               
tax cap  did not allow  a jurisdiction  to have a  total assessed                                                               
value for all  properties to exceed 225 percent  of the statewide                                                               
per  capita assessed  value. He  said  the cap  sets the  maximum                                                               
assessed  value allowed  for the  purposes of  funding operations                                                               
and provided  a "no cap"  provision for the repayment  of general                                                               
obligation debt.  He said the  cap did  not affect the  amount of                                                               
property tax that could be collected.                                                                                           
                                                                                                                                
He  said the  cap was  put  into place  in  the 1970's  due to  a                                                               
concern  that boroughs  within the  Oil  Pipeline Corridor  (OPC)                                                               
would have  an inordinate amount  of property tax money  to spend                                                               
on operations. He said the  state had grown dramatically over the                                                               
past 40 years and OPC  boroughs were operating with mature fiscal                                                               
policies.  He said  cap removal  would allow  for greater  fiscal                                                               
flexibility  for the  North Slope  Borough (NSB)  and Valdez.  He                                                               
noted  that  the  cap  had affected  Unalaska,  Bristol  Bay  and                                                               
Skagway due to  a high proportion of property tax  value within a                                                               
relatively small  population jurisdiction. He said  the cap would                                                               
impact Unalaska  once again  due to future  offshore oil  and gas                                                               
exploration.                                                                                                                    
                                                                                                                                
12:43:22 PM                                                                                                                   
He said  NSB currently  collected 9 to  9.5 mills  for operations                                                               
and  9 to  9.5 mills  for bonded  debt. He  said using  cash flow                                                               
would be more efficient than  cycling through the bond market for                                                               
tax  collection purposes.  He noted  that $140  million would  be                                                               
paid towards interest on the  current $480 million in outstanding                                                               
general obligation  debt. He said  paying for interest  was money                                                               
wasted and eliminating  the cap would allow for more  funds to go                                                               
towards community projects. He said  the borough faced up to $600                                                               
million in capital maintenance projects  over the next five years                                                               
and being allowed to use operating funds would be preferred.                                                                    
                                                                                                                                
He said the  only entities that would be affected  by the removal                                                               
of the  cap would be New  York bankers and investors.  He said it                                                               
was a  zero sum  game for  everybody else  and state  tax revenue                                                               
would not  change. He  said the state  would continue  to receive                                                               
its  20  mill  property  tax  obligation from  the  oil  and  gas                                                               
industry. He noted that the oil  and gas industry gets to use any                                                               
local tax as a credit against what  is paid to the state. He said                                                               
with the  North Slope Borough's  18.5 mill rate, the  state would                                                               
continue  to  receive 1.5  mills  after  the industry  takes  its                                                               
credit.                                                                                                                         
                                                                                                                                
He said the bill would provide  more flexibility to use the money                                                               
more  efficiently and  actually provide  long term  stability. He                                                               
said the  borough's tax base  was dictated by the  population and                                                               
not  by assets  within  the  borough. He  said  oil field  worker                                                               
fluctuations  made  it  very  difficult   for  long  term  fiscal                                                               
planning. He  said the  intent was  not to  ask for  an advantage                                                               
over other  jurisdictions, but  to be allowed  to operate  on par                                                               
with jurisdictions that do not have to deal with cap provisions.                                                                
                                                                                                                                
12:47:52 PM                                                                                                                   
SENATOR  WAGONER asked  if the  industry  would feel  comfortable                                                               
with the bill.                                                                                                                  
                                                                                                                                
MR. HOFFBECK  answered that the  industry's 20 mill cap  does not                                                               
change and the Department of  Revenue (DOR) would continue as the                                                               
assessing authority.                                                                                                            
                                                                                                                                
CHAIR OLSON asked if there were additional comments.                                                                            
                                                                                                                                
MR.  HOFFBECK responded  that the  Alaska Municipal  League (AML)                                                               
solicited other communities for  comments on the bill's potential                                                               
impact.  He  said  no  communities  had  identified  any  adverse                                                               
effects. He noted that the  municipality of Juneau indicated that                                                               
cap removal would be good fiscal policy.                                                                                        
                                                                                                                                
CHAIR OLSON asked if removing the cap was good fiscal policy.                                                                   
                                                                                                                                
MR. HOFFBECK answered yes. He  said Unalaska recognized that they                                                               
were likely  facing a cap issue  and thought it was  a good idea.                                                               
He  said  there   was  no  additional  revenue   flowing  to  any                                                               
jurisdiction and no  liability to the industry. He  said only the                                                               
New York bankers would lose in the process.                                                                                     
                                                                                                                                
12:50:48 PM                                                                                                                   
JOHANNA  BALES,  Deputy  Director, Tax  Division,  Department  of                                                               
Revenue, said  DOR opposed the  CS for SB  264. She said  DOR did                                                               
not  have adequate  time to  vet the  CS and  would like  to have                                                               
discussions with municipalities. She said  DOR would like to look                                                               
at reasons  behind the original  legislative intent to put  a cap                                                               
into place. She said DOR  disagreed with Mr. Hoffbeck's statement                                                               
that state tax  revenue would not be affected and  said the state                                                               
could lose  $115 million if municipalities  increased their rates                                                               
to 20 mills.                                                                                                                    
                                                                                                                                
12:53:18 PM                                                                                                                   
MR.  HOFFBECK responded  that the  cap only  affects a  community                                                               
that had  a certain relationship  between its population  and the                                                               
tax base.  He noted that  communities could raise rates  above 20                                                               
mills  regardless of  the current  cap.  He said  NSB had  rarely                                                               
exceeded  18.5 mills  over the  past 40  years and  the rate  was                                                               
important for the borough's long term fiscal stability.                                                                         
                                                                                                                                
12:55:16 PM                                                                                                                   
He said 18.5  mills was critical to the bond  rating agencies due                                                               
to the extra 1.5 mills  being available to raise additional funds                                                               
if assessed  values did not  meet forecasts. He said  the state's                                                               
majority of oil  and gas properties were  in unincorporated areas                                                               
without  local jurisdictions.  He  said  if the  NSB  went to  20                                                               
mills, about $20 million would be  moved and not $115 million. He                                                               
said  NSB  always   considered  20  mills  as  a   hard  cap  for                                                               
forecasting purposes. He said going  to 30 mills would take money                                                               
away from other  portions of the state and would  set the borough                                                               
up for tax limitation legislation.                                                                                              
                                                                                                                                
He said  the bill would allow  NSB to relieve itself  of its debt                                                               
burden and reduce  pressure on assessed values.  He said reducing                                                               
payments  on  interest  rates  would  allow  for  flexibility  to                                                               
decrease mill rates.                                                                                                            
                                                                                                                                
12:57:55 PM                                                                                                                   
SENATOR WAGONER asked why DOR did not present a fiscal note.                                                                    
                                                                                                                                
MS. BALES answered  that DOR was working on a  fiscal note due to                                                               
the limited time from the CS announcement.                                                                                      
                                                                                                                                
SENATOR WAGONER commented that he  would like DOR to proceed with                                                               
their follow up work.                                                                                                           
                                                                                                                                
12:59:17 PM                                                                                                                   
CHRISTOPHER CLARK,  Staff for Representative Cathy  Munoz, Alaska                                                               
State Legislature, said the sponsor  supported the bill from page                                                               
1 up to line  12 on page 2 and shared the  same concerns with DOR                                                               
on the rest of the language.                                                                                                    
                                                                                                                                
CHAIR  OLSON asked  for clarification  that the  sponsor was  not                                                               
against the bill, just that more time was required to audit it.                                                                 
                                                                                                                                
MR. CLARK answered correct.                                                                                                     
                                                                                                                                
12:59:44 PM                                                                                                                   
SENATOR  WAGONER  asked  if  rules  and  finance  were  the  next                                                               
committees  of referral.  He noted  that a  fiscal note  would be                                                               
required.                                                                                                                       
                                                                                                                                
SENATOR ELLIS answered correct.                                                                                                 
                                                                                                                                
1:00:16 PM                                                                                                                    
SENATOR KOOKESH  moved to  report SCS  CSHB 264(  ), 27-LS1090\E,                                                               
from the  committee with individual recommendations  and attached                                                               
fiscal note(s).                                                                                                                 
                                                                                                                                
1:00:31 PM                                                                                                                    
CHAIR OLSON said without objection, SCS CSHB 264(CRA) passed out                                                                
of the Community and Regional Affairs Standing Committee.                                                                       
                                                                                                                                
1:00:39 PM                                                                                                                    
CHAIR OLSON announced that the meeting was recessed to the call                                                                 
of the Chair.                                                                                                                   

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