HB 232-MUNICIPAL TAX CREDITS  11:30:45 AM CHAIR HOPKINS announced that the final order of business would be HOUSE BILL NO. 232, "An Act relating to a municipal air quality improvement tax credit; and relating to a municipal energy efficient new construction tax credit." 11:31:09 AM REPRESENTATIVE SPOHNHOLZ moved to adopt the proposed committee substitute for HB 232, Version 31-LS1355\S, Klein, 2/14/20, as the working draft. There being no objection, Version S was before the committee. 11:31:31 AM JOE G. HARDENBROOK, Staff, Representative Grier Hopkins, Alaska State Legislature, on behalf of Representative Hopkins, prime sponsor of HB 232, paraphrased the overview of the changes proposed under Version S [included in members' packets], which read as follows [original punctuation provided]: The CS adopted by the House Special Committee on Energy makes the following changes: First, it removes the restriction on the Air Quality Improvement Tax Credits are only available to communities under a state or federal air quality improvement plan. This CS will make these tools available to any community who wishes to utilize them to address local air quality concerns. Second, this CS inserts clear language in both tax credit sections to make clear that the credits are available for new construction as well as refurbishments, remodels and renovations. This flexibility will allow municipalities to incentivize not only new construction that improves air quality or energy efficiency, but also renovations and refurbishments of existing structures. 11:32:56 AM AARON WELTERLEN, Past President, Interior Alaska Building Association, directed attention to a letter of support from the Alaska State Home Building Association which had a long history of support for energy efficient construction. He added that they also supported adoption of a statewide residential building code to include energy efficiency standards, which would resolve many of the problems addressed by the proposed legislation. He offered his belief that the tax credit would be an economic stimulus to any area of Alaska, especially to any area with a weak housing and construction market. 11:35:00 AM MARNA SANFORD, Fairbanks North Star Borough Assembly, reported that the Fairbanks North Star Borough Assembly had identified both provisions of the proposed bill as its top legislative priorities for this legislative session. She shared some of the history for air quality issues, noting that the Fairbanks area was now classified as "serious non-attainment." She noted that this created serious health risks, with economic and environmental impacts. She declared that this proposed legislation was another incentive for people to make their heating devices the most efficient and the best for air quality in the area. She spoke in support of the tax credit for new construction to help with air quality for a better community. CHAIR HOPKINS clarified that this applied to commercial construction and home building and did not limit communities for use of the tax credits. MS. SANFORD, in response to Representative Spohnholz, explained that, through a voter initiative, the borough no longer had the ability to regulate air quality standards, so, in an effort to get the community into compliance, the EPA would penalize the largest single source and the resulting penalty would be passed on to the consumers through higher bills. 11:39:02 AM CHAIR HOPKINS, in response to Representative Rauscher, said that each municipality would create its own criteria as the proposed bill did not mandate the structure, the value, or the application of the tax credits but would leave it to the community to solve their own problems and incentivize their own economic development. 11:39:54 AM CHAIR HOPKINS opened public testimony on HB 232. After ascertaining that there was no one who wished to testify, he closed public testimony. 11:40:53 AM REPRESENTATIVE SPOHNHOLZ moved to report CSHB 232, Version 31- LS1355\S, Klein, 2/14/20, out of committee with individual recommendations and the accompanying zero fiscal notes. There being no objection, CSHB 232(ENE) was moved from the House Special Committee on Energy.